The second round of stimulus signed by then-President Trump in December extended the Centers for Disease Control limited federal eviction moratorium (started in October) through January 31, and then immediately upon taking office, President Biden extended the stay on evictions through March 31. So, landlords of qualifying non-paying tenants continue to be legally prohibited from recovering possession of their properties.
And a related component of the second stimulus bill was a rental assistance program that allowed tenants — with federal subsidy — to continue to pay their rent, and even recoup back rental accrued, so landlords could be made whole despite the eviction prohibition.
Today’s New York Times writes on the toll the pandemic is taking on the housing industry, including landlords and tenants, which led us to update on “what is the status of the rental assistance component of the stimulus bill?”
What do we know:
- The rental assistnce is being given from the federal government to the states, who will then each establish their criteria, and application and distribution programs. Some states will be distributing the money to counties and cities for further distribution. What this will mean is a patchwork of criteria for qualification, multiple software portals, and delays in implementation.
- We have inquired to to roll-out dates and assistance criteria and, at least as to Ohio and Kentucky, not only are none of the application and distribution procedures known, there does not even appear to be discussions with stakeholders taking place as to how best to get the assistance to those in need.
- Thus, we had hoped that tenants and landlords could get relief by some time in March, but that does not appear feasible. Our best bet right now is April/May, but that is just speculation.
The fact that Ohio paid out $330 million in fraudulent unemployment claims in 2020 will likely slow the process to assure that bogus rental assistance claims do not slide through.
We will attempt to keep our readers informed of developments on the moratorium and rental assistance programs as they emerge.
Every year, the Auditor of each of Ohio’s 88 counties publishes a chart like this showing the tax rates for each taxing district in each County.
In Hamilton County, there are 241 distinct taxing districts, each having a complex calculation to develop the net residential and commercial rates of taxation (taxing districts being greater in number than either municipalities and townships or school districts, because the boundaries of some frequently overlap one another). Here are the five highest commercial and residential taxing districts in Hamilton County:
|Highest Commercial rates|
|Municipality||Township||School District||Commercial millage||Commercial percentage|
|Mt. Healthy||Springfield||Mt. Healthy||121.665||4.277%|
|Highest Residential rates|
|Municipality||Township||School District||Residential millage||Residential percentage|
|Mt. Healthy||Springfield||Mt. Healthy||104.619||3.678%|
As you can see, several Hamilton County commercial districts well exceed 4.0% in annual tax rates (approaching 5.0%) and the highest residential rates are bumping up against the 4.0% threshold.
The Cincinnati Area Board of Realtors today reported December 2020 home sales numbers. And once again reported record-breaking home sales:
- The most home sales of any December in Greater Cincinnati.
- Average sales and median pricing continued their ongoing increases.
- Closings in December exploded, up 21.04% against a strong December 2019 with total sales volume up 35.66%.
- December 2020 home sales were 2,267 compared to 1,873 in December 2019.
You may read the CABR release here.
One of Joe Biden’s first acts as President yesterday was extending the residential eviction moratorium until March 31, 2021. Read the CDC statement on that here.
We are hearing there will be extensive changes to the moratorium processes and procedures that will tilt the scales decidedly in favor of non-paying tenants. We will keep our blog readers updated on those changes as they occur.
The CDC in its release attributes the moratorium to “a housing affordability crisis” that they now place even more so on the books and backs of landlords to resolve.
As we explained previously, the pandemic relief bill that has been approved by both Houses of Congress, but still awaits the President’s signature, contains good and bad for our nation’s market-rate residential landlords. From the article:
- It extends the CDC eviction moratorium through January 31, 2021 (and it is expected to be extended further from there under the Biden Administration).
- Tenants can qualify for up to 15 months of federal rental assistance.
- The criteria for qualification are not clear as of yet.
- This assistance partly will cover months of unpaid back rent, rewarding landlords who have not evicted during the COVID-19 pandemic. A landlord cannot get back rent if the tenant has already left.
- Rental assistance money will be distributed by states and cities.
- Renters will apply for the help, and the money will be sent directly to their landlords. If a landlord doesn’t cooperate, the tenant can access the funds directly.
- Renters looking for assistance can call 211 or go to the website www.211.org. It’s a confidential referral and information help line and web site.
So, the landscape will be changing soon very significantly in the relationship between landlord and tenant in the affordable housing sphere.
We will post more detail as it becomes available.
Contact Chris Finney (513.943.6655) if you have questions.
This week, the Cincinnati Area Board of Realtors addressed a topic on which I have written previously: The proper form to use to terminate a real estate contract pursuant to the failure of a contingency such as inspection or financing contingency. Their blog entry and this one address termination of the form Cincinnati Area Board of Realtors residential purchase contract.
Cindy Henninger, director of Professional Services of the Board wrote this blog entry about the use of a “Notice of Termination,” which is a one-party notice from the buyer to the seller to exercise a contingency and terminate a contract. No seller signature is required for it to become effective. The other form available from the Board and commonly in use in the greater Cincinnati/Dayton marketplaces is a “Mutual Release,” which is not appropriate for use when the buyer is simply exercising his unilateral right to terminate.
Here’s why: The Release form requires the seller’s signature and therefor his consent. And if the seller refuses his consent, there could be an issue that the buyer did not in fact terminate (but simply rather proposed termination). Then, if the time period lapses for termination pursuant to a financing or inspection contingency while awaiting the seller’s signature, the seller then may say “too late.” I know because a seller tried this on me once.
I wrote on this topic previously, here.
Realtors would be advised to familiarize themselves with the proper form to use. Otherwise, you may find your self in a “what the heck?” moment of lawyerly interpretation over the use of the wrong form, even though everyone knows what you in fact intended.
Entertain us, if you will, as we serve as Jacob Marley to landlords in visiting the ghosts of eviction moratoriums, past, present and future.
After months of experience with the eviction moratorium imposed by the Centers for Disease Control, we now know that most residential evictions — even those for non-payment of rent — can proceed per normal procedures, at least until new regulations are issued and the moratorium never applied to eviction for issues other than non-payment (e.g., criminal activity and damaging the premises,)
As reported here, the Centers for Disease Control on Friday, September 4, 2020 imposed a residential eviction moratorium for non-payment of rent in certain limited circumstances through the end of the year due to the impact of COVID-19. That relief required the tenant to certify that 1) the individual has used best efforts to obtain government assistance for the payment of rent, 2) the individual falls below the above-income thresholds ($99,000 for individuals and $198,000 for those filing jointly), 3) the individual can’t pay rent due to loss of income or medical expenses, 4) the individual is using best efforts to pay the rent or as much of it as he can, and 5) eviction would render the individual homeless.
And as we report here, the CDC clarified that Order, allowing for more vigorous actions by landlords pursuing eviction: Cross examination of a tenant who claims he has met the criteria, allowing commencement and pursuit of an eviction action even if the set out is not until after the first of the year, and imposing criminal penalties upon tenants making false certifications.
Our experience in recent evictions is that many tenants cannot stand up under cross examination as to the CDC certifications: They usually have paid no rent at all, which hardly ever complies with the CDC “best efforts” criteria, and it is unlikely the eviction will result in homelessness for the vast majority of tenants.
In Hamilton County, before conducting the forcible entry and detainer hearing, the Magistrate has a separate evidentiary hearing on whether the CDC criteria are met — including allowing a landlord to cross examine a tenant — and then, when the tenant fails to meet this burden, allows the eviction hearing to proceed. In all, the takes an extra 5-10 minutes to try an eviction case and we have not yet failed to exceed the CDC standards.
Add to all of this the fact that an eviction commenced today won’t result in a set out until well into January. Thus, the moratorium no longer has any application to new evictions being filed.
Finally, we don’t know either how the Trump administration will address the regulations after their year-end expiration until his term ends on January 19th, or how the new Biden administration will address the issue thereafter. For both Presidents, the issues are difficult: Millions of tenants are facing severe financial hardship as a result of the COVID-19 crisis, but on the other hand, landlords have to pay bank loans, real estate taxes, building repairs, and for insurance. Many can’t meet their obligations if tenants are not paying their rent. Then, if they start en masse to default on mortgage loans, it could destabilizing banks as in 2007-08. These are not easy issues for anyone.
So, the next few weeks and months will determine a new course for landlord-tenant legal relationships. Stay tuned for more updates, and contact Chris Finney (513.943.6655) with any Ohio or Kentucky eviction issues you may have.
As many in the Ohio real estate, title and finance industries are aware, this firm along with the firm of Markovits, Stock and Demarco are co-counsel to several Plaintiffs challenging a long-running real estate scam that has ensnared hundreds of victims in the greater Cincinnati marketplace.
The Complaint alleges causes of action under Civil RICO, Civil Conspiracy, Breach of Fiduciary Duty by both the various Build Realty companies, First Title and Pat Connors, Negligence against First Title and Pat Connors, Unjust Enrichment, and a declaration that the various schemes designed to avoid the statutory right of redemption and the right of a borrower to excess proceeds under a lending arrangement are illegal, and that the trusts themselves are illegal and contrary to public policy.
The defendants in the proposed Amended Complaint include:
- Build Realty, Inc.
- First Title Agency, Inc.
- Edgar Construction, LLC
- Cincy Construction, LLC
- McGregor , First Title, LLC
- Cowtown Holdings, LLC
- Build SWO, LLC
- Greenleaf Support Services, LLC
- Gary Bailey as Trustee and individually
- George Triantafilou, as trustee and individually
- Robert Scott Whiteside
- G2 Technologies, LLC
- GT Financial, LLC
- Five Mile Capital Partners, LLC
- Smith Graham & Co., Investment Advisors, L.P.
- Pat Connors
A copy of the proposed form of Amended Complaint is here and below.
It appears this case will soon be moving forward before Federal District Court Judge Cole.
We will endeavor to keep victims updated by means of this blog as developments occur.
If you have questions, it’s best to email Christopher P. Finney. You may also call him at 513-720-2996.
[scribd id=469483280 key=key-GQ52opDHU9TenIB5qdcZ mode=scroll]
The Associated Press yesterday has a good article on what we are seeing: A steep decline in values and transactional activity for commercial real estate.
Read more here.