Hoffman Realty recently visited Washington D.C., and in a recent video we created and shared, Andrew Dougill provided some brief highlights about the trip while he was on his way to the Hart Senate Office building to meet with Florida Senator Rick Scott. This meeting took place after several meetings on the House of Representatives side.
Why is Hoffman Realty in Washington, D.C.? More importantly, what are we talking to our elected representatives about?
We’re focused on a matter that is especially important for landlords in Florida. Let’s discuss the issue and the conversations that Andrew is having with members of Congress and Senator Scott.
CARES Act and the 30-Day Notice Requirement
We came to Washington to talk about the 30-day notice that’s required by the CARES Act, also known as the Coronavirus Aid, Relief, and Economic Security Act.
As you may remember, the CARES Act was passed in 2020, when COVID-19 was causing people to be concerned about losing their homes. A lot of emergency legislation was put into place in those early days of the pandemic when everything was so uncertain and more than a little unstable.
The most memorable part of the CARES Act, of course, was the eviction moratorium. But another piece of that legislation that got less attention but still made a huge impact on the rental industry is the requirement that when a tenant pays rent late, the landlord must wait 30 days before beginning the eviction process.
This is separate from the coronavirus relief fund, which provided rent assistance to both tenants and property owners when renters were unable to come up with the money to pay their rent. Pretty much all of the provisions in the CARES Act are no longer in place. They sunset with the COVID pandemic. But this 30-day notice requirement is still in effect, and it’s causing problems in Florida. While many landlords and tenants assume that this provision has expired with the rest of the COVID-era protections, the final rule in effect is actually this 30-day notice requirement. It remains in place for federally backed mortgages on rental properties.
What Kinds of Problems Are Caused by the 30-Day Notice Requirement?
If you are a renter and you’re already late with the rent, and you’re given a notice that says you have 30 days to pay that late rent, why wouldn’t you take all 30 days to pay? Why pay two days later when you can legally wait until day 30? It’s easy to see how the system can be taken advantage of by tenants who are in no hurry to catch up with the rent that is already overdue. This creates a financial crunch for the landlords, many of whom likely need that rental payment in order to square away their own mortgage payment and other expenses related to the rental investment.
That’s the problem we continue to see as property management experts in Florida. It’s frustrating and it’s unfair, and even worse–sometimes those tenants never catch up after being given the 30-day notice. So, if you’re operating on a 12-month lease, the landlord can expect only 11 months of rent under this existing law.
Impact on Florida Tenants
It’s clear to see how this law hurts landlords; the rent payment is delayed for a full month and sometimes it’s never paid at all.
But this law is hurting tenants, too.
Because landlords understand the risk, they’re putting protections in place to avoid losing that last month of rent when a tenant falls behind and has no intention of catching up. To fight against this, we’re seeing a lot of landlords in Tampa and throughout Florida ask for a larger security deposit before tenants move in.
Realizing they can lose a month’s rent, landlords are not only asking for bigger deposits, they’re also asking for the last month’s rent to be paid up front. Think about what that means for a tenant to move into a new property, even a qualified tenant. They’ll have to come up with the first month’s rent, the security deposit, which is likely the equivalent of a month’s rent, and then the last month’s rent as well. That’s a lot of cash to have on hand when tenants are preparing to move. It’s become a difficulty that renters have to face upon moving in.
Evicting Non-Paying Tenants
With the 30-day notice requirement still in effect under this law, landlords cannot evict a tenant who pays the rent within those 30 days. So, there could also be a situation where your tenant is paying late every single month. Instead of paying rent on the first of the month, they’re paying on the 30th of that month because they know they are protected from eviction as long as they get that payment within the 30 days. This basically nullifies your lease agreement, leaving the tenant free to pay rent at any time and still avoid eviction.
The Importance of Advocating for Landlords and Tenants
The temporary provisions of the CARES Act, while valuable during the height of the pandemic, are no longer necessary as tenants have fully recovered their ability to pay rent on time and in accordance with their lease agreements. It’s time for these measures to phase out, allowing landlords to operate without undue restrictions.
At Hoffman Realty, we remain dedicated to advocating for the interests of both landlords and tenants and are committed to facilitating dialogue with policymakers in Washington. We enjoyed our time talking about getting this part of the law changed and about matters that are important to the landlords and investors we work with.
We encourage you to contact your representatives in the House and Senate to express your concerns and share your perspective on this issue. If you have any questions or need guidance, our team at Hoffman Realty is here to help. Reach out to us today—we’re here to support you.