This week, all eyes were on the 880 pages of the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was passed by Congress on March 27. Though the Act took significant strides toward helping Americans who have been hit hard by the coronavirus pandemic and the ongoing financial crisis, its details have left rental owners and property managers with a number of questions.
In this week’s post, we’ll first go over the headlines that have had the biggest impact for property managers. After that, we’ll share the best resources we’ve found for unpacking the details of the CARES Act and its impact on the rental sector.
Headlines: The CARES Act, Rising Unemployment & the Impact on Property Managers
Unemployment claims hit 6.6 million this week as job losses far exceeded what economists predicted even just a week or two ago. Through the CARES Act, the Federal Government will send a one-time stimulus check to many Americans and make low-interest loans available to small businesses; but with one in three workers potentially facing job loss by the end of Q2, more aid will likely be needed.
The CARES Act temporarily halts foreclosure and eviction procedures for certain homeowners, rental owners, and renters who are unable to make payments due to COVID-19. While the Act mainly applies to properties with federally-backed mortgages, many cities and states have passed regulations that extend moratoriums on evictions and late fees to more rental properties.
95% of property managers plan on creating payment plans in coordination with renters impacted by the crisis, according to a recent RealPage poll. In its guidance on the subject, the National Multifamily Housing Council suggests that property managers consider incentivizing on-time payments, accepting credit cards, instituting shorter payment schedules, converting security deposits, or allowing payments to be deferred.
Lease agreements still apply, and rent is still due for those who can pay. The CARES Act doesn’t nullify lease agreements, waive rents, or mandate payment plans for renters. Property managers can remind residents that they’re still responsible for following the terms of their lease as they work together on payment plans that meet both parties’ needs.
Resources for Property Managers on the CARES Act
- COVID-19: How the CARES Act Impacts You (RealPage)
- Congress Passes Third COVID-19 Federal Relief Package (National Apartment Association)
- Talking with Owners about the Stimulus Package (National Association of Residential Property Managers)
- Committee Releases Answers to Frequently Asked Questions About the CARES Act (House Financial Services Committee)
- Tools for Communicating with Residents Regarding Rent Flexibility, Federal Assistance and Rent Obligations (National Multifamily Housing Council)
- COVID-19 Resources for Property Managers: Industry Guidance on Regulatory Changes, Financial Assistance & More (Buildium)