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What rent relief programs are available for landlords who didn’t get paid?

While not a rent relief program, some landlords and rental property owners may qualify for the Small Business Administration’s Economic Injury Disaster Loans (EIDL) or grants to offset pandemic-related losses. If paying the mortgage or other property-related debts has become an issue, an EIDL might help. Unfortunately, the process is slow and can take a few months.

In terms of direct rent relief, the federal government allocated $25 billion for the Emergency Rental Assistance program (ERA) within the U.S. Department of the Treasury. Although ERA is a federal initiative, states and local governments administer the assistance. The U.S. Department of the Treasury maintains a database of state and local programs on its website so both landlords and tenants can find programs in their area.

Beyond the federal ERA program, several states and cities enacted rent relief at the same time they imposed a moratorium on evictions. Some of these programs were designed, at least in part, to shield landlords from the moratorium’s impact.

Can landlords get assistance from the Emergency Rental Assistance program?

Like most rental assistance programs, ERA is designed to benefit tenants, so tenants must file the application for assistance. That said, helping tenants pay their rent means landlords get paid. The Consumer Financial Protection Bureau (CFPB) explicitly acknowledges that ERA can benefit landlords and encourages landlords to help tenants file for assistance whenever appropriate.

To qualify for ERA assistance, tenants must meet all three following qualifications:

  1. At least one member of the household has qualified for unemployment or should qualify, lost income, owed large expenses, or had other financial hardships.
  2. Household income is below a certain amount, based on where they live.
  3. At least one member of the household is at risk of becoming homeless or may have trouble finding stable housing.

Some state and local programs administering ERA prefer to make rental assistance payments directly to landlords instead of giving money to the tenant. Regardless, tenants are supposed to use the money to pay rent, including reasonable late fees.
 

If a tenant qualifies for rental assistance from either the ERA or another program, landlords should encourage them to apply and assist them with the application. If you have questions about how to navigate national or local relief programs, or how to communicate with your tenant, reach out to a Rocket Lawyer On Call® attorney.

Is it legal to raise rent to recoup losses?

Generally, rent may be raised at the end of the lease period or if allowed by a Lease Agreement. For example, if a tenant signed a lease for one year beginning Jan. 1, 2021, the earliest you can raise the rent is Jan. 1, 2022. If your tenant is on a month-to-month lease, however, you can raise the rent at the beginning of the next month after providing the appropriate notice. Some states may require landlords to provide tenants with at least 30 or 60 days of written notice before a rent increase. If a property is subject to local rent control laws, there may be additional restrictions and limits. It may be worthwhile to ask a lawyer about the specific laws on rent increases in your state or city before sending a Rent Increase Letter.

Assuming the rental property is not subject to rent control, or local or contractual limitations, a landlord may raise the rent for nearly any reason once the current lease expires. This includes recouping losses from unpaid rent during the previous lease. For example, if a tenant paying $1,200 in rent missed rent payments in March and April of 2021, a landlord may be able to raise the rent on the property to $1,400 per month for one year beginning Jan. 1, 2022, to recover the $2,400 in lost revenue. The tenant will still legally owe those missed rent payments, and a Rent Payment Plan can also be used to help the tenant catch up on back rent. 

If an eviction moratorium still applies in a rental property’s location, a landlord cannot evict tenants for failing to pay in many circumstances. Landlords may, however, continue to send late and missed rent payment notices and keep detailed records. Clear and open communication with a tenant struggling to pay rent is essential. Be open to flexible solutions such as accepting partial rent payments or working out a Rent Payment Plan once your tenant gets back on their feet.

Can landlords offer additional services to tenants for a fee?

If you have multiple rental properties or the ability to add amenities or services, you may expand the services or offer unit upgrades to financially secure tenants in an effort to generate additional revenue. 

The services you offer may range from landscaping to household cleaning and beautification. Similarly, the kinds of upgrades available will depend on your specific property and ability, but might include access to desirable common areas such as a pool or game room, rooftop patio, increased storage, or more preferential parking. You may also offer in-unit upgrades, like air conditioning, custom remodeling, a private hot tub, or adding other features a tenant may be willing to pay more rent for.

An agreement for services or upgrades not covered by the Lease Agreement may be incorporated into a Service Contract or spelled out in a Lease Amendment.

Can multi-unit properties be used for short-term rentals?

Generally, yes. In most places, landlords may designate certain units in a multi-unit property for use as a short-term rental space. If your rental property is located in a tourist destination, short-term rentals via various online platforms offer an alternative revenue stream to long-term rentals. These rentals are increasingly popular among travelers who want to avoid the expense and uniformity of hotels.

Be careful and do your homework before offering one of your units for short-term rentals, however. Many cities and states have enacted strict restrictions on short-term rentals, particularly those in multi-unit properties. Your short-term rental may also be subject to your jurisdiction's most recent COVID-19 regulations for travelers and hosts. A Rocket Lawyer On Call® attorney can help you comply with all applicable laws.

Can landlords change the terms of their lease or reduce services?

Generally, landlords cannot change the terms of an existing lease without the explicit agreement of the tenant or a corresponding reasonable reduction in rent. This is true even if the tenant is not complying with the terms of the lease, such as by failing to pay rent. In fact, such self-help measures are explicitly prohibited in many states and can lead to severe legal consequences. Notably, tenants struggling to pay rent may be happy to sign a Lease Amendment that reduces the rent along with removing services or amenities, as this may ease some financial stress. 

If a landlord needs to modify the terms of a lease or reduce services to a tenant due to the landlord’s own financial hardship, the best strategy is to communicate with the tenant and negotiate a Lease Amendment. For example, landlords may offer other services or amenities, or agree to forgive a month of rent in exchange for the lease change. Whatever gets worked out, memorializing it in a Lease Amendment will ensure everyone is on the same page.


Do you have other legal questions about recovering losses from the coronavirus pandemic? Visit the Rocket Lawyer COVID-19 Legal Center for answers.

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.


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