By Zhen Liu, Staff Writer
As job losses have climbed into the millions due to the coronavirus pandemic, laid-off workers increasingly can’t pay their rent. That’s also bad news for small landlords, in particular. Unlike large real estate companies and REITs (Real Estate Investment Trusts) that own multiple rental buildings, small landlords, or the so-called “mom and pop” landlords, have neither the cash nor the credit availability to cover their costs when the rents aren’t paid.
In our experience, our small landlord clients are hardworking people who have scraped together enough money for a down payment on a rental property with the hope that one day this investment would put their children through college, serve as their retirement fund, or supplement their income. Now, they are deprived of income for months – but unable to evict nonpaying tenants – struggling to pay mortgages and property-tax bills, deferring maintenance on their buildings, and in some cases, considering bankruptcy.
Executive Order No. 106.
Small landlords in New Jersey know by now that New Jerseyans cannot be removed from their homes by eviction or foreclosure for 60 days after the end of the current “public health emergency.” Governor Murphy’s Executive Order 106 states that no one may be removed from their home due to the inability to pay rent during the COVID-19 emergency.
On March 20, 2020, the Governor signed A-3859 into law, which explicitly provides authority to the Governor to issue an executive order declaring a moratorium on removing individuals from their homes pursuant to an eviction or foreclosure proceeding. The Governor then immediately signed Executive Order No. 106, which imposes such a moratorium.
- Duration: Expires 2 months after the end of the state of emergency.
- Scope: While eviction and foreclosure proceedings may be initiated or continued during the time this order is in effect, enforcement of all judgments for possession, warrants of removal, and writs of possession shall be stayed, unless the court determines on its own motion or motion of the parties that enforcement is necessary in the interest of justice. The Order does not affect any schedule of rent that is due. Sheriffs, court officers, and their agents must refrain from acting to remove individuals from residential properties through the eviction or foreclosure processes during the time the order is in effect, unless the court determines on its own motion or motion of the parties that enforcement is necessary in the interest of justice.
- Residents Still Responsible for Rent: Yes.
New Jersey Small Landlord Emergency Grant Program.
Last year, in August, New Jersey set aside $25 million to help struggling small landlords and their tenants impacted by the COVID pandemic — if certain property owners forgave missed rent payments, the state would cover what their tenants couldn’t afford to make. The agency that runs the program, the New Jersey Housing and Mortgage Finance Agency, says it has expanded the grant so more people would be eligible, giving landlords time to correct mistakes on their applications, and setting staff aside to guide applicants through the process.
To apply, New Jersey landlords must be registered with the state’s Department of Community Affairs’ Bureau of Housing Inspection, own a property with three to 30 rental units, have at least one rental unit “impacted by COVID-19.” The first round was focused on landlords with three to 10 units. The program was opened again in October, 2020 to landlords holding three to 30 units, though the property can’t be a vacation or seasonal rental, and must have low-to moderate-income rent levels.
A third of the $25 million grant program has been reserved for individual or family owners registered with the Bureau of Housing’s Registration Inspection Management System database. One- and two-family rental properties are not listed in the health and safety database and are ineligible for the program.
After two rounds of the emergency grant Program, fewer landlords applied for the aid than expected, and State slashed the amount of money allocated by 60%. Only a fraction of applicants have so far been approved for the grants. According to some, the program is extremely complicated and cumbersome almost to the point where people have given up trying to get the money. As of Nov. 23, 2020, the State approved 745 applications for a total of $3.8 million, though so far only $960,000 has been paid out. The average grant amount was about $5,000. Disappointing to say the least!
This emergency grant program is currently closed. It is therefore very important for small landlords to watch out for any news regarding another round of the program from the State.
Frequently Asked Questions for Landlords regarding COVID-19.
- I have a tenant who was diagnosed with COVID, or I believe a tenant may have COVID. Do I need to seek confirmation and/or disclose this to other tenants?
Answer: No. Your tenants do not have to disclose their health status, including a COVID-19 diagnosis. There are also confidentiality and fair housing laws prohibiting inquiry into, or disclosure of a tenant’s medical condition or disability. As with any medical condition or disability the tenant has no responsibility to inform the landlord of the condition. If the tenant requests a reasonable accommodation based on a condition or disability, you may request medical documentation that the accommodation is necessary for the condition or disability, but you may not request details of the diagnosis or disability.
- How should I clean common areas to prevent COVID-19?
Answer: Following CDC guidance on how to properly disinfect areas while protecting employees.
- What are my responsibilities for cleaning and disinfecting a tenant’s unit if they test positive for COVID-19?
Answer: A tenant is responsible for cleaning and disinfecting their own unit, although the landlord may be responsible for cleaning and sanitizing the property for a future tenant. Additional guidance is available through the CDC and the U.S. Department of Housing and Urban Development.
- How can I stop the spread of COVID-19 on my property?
Answer: Whether or not someone in your building has COVID-19, here are some steps you can take:
- Frequently clean high-touch surfaces. These include door handles, stairway railings, elevator buttons, reception desks, push plates, light switches and laundry room equipment. Follow the CDC’s guidance for cleaning and disinfecting.
- Post signs limiting the number of people who get on the elevator at the same time
- Post signs limiting the number of people who can use the laundry room at the same time.
- Post signs asking residents to practice physical distancing, including when getting packages or mail and going in or out of the building, to cover their mouths when coughing or sneezing, and to wash their hands.
- Consider offering alcohol-based hand sanitizer in common areas at all times.
- Encourage staff to wear cloth face coverings.
- Have building staff drop off packages or deliveries outside residents’ doors to minimize contact between staff and residents, and ask residents to instruct food delivery services to do the same.
Staff Writer Zhen Liu is a recent graduate from Seton Hall Law School, where she was a member of the Asian Pacific American Lawyers Association. She specializes in Family Law and serves as research assistant to associate reporters of The American Law Institute.