You may have heard from the Governor’s press conference today (April 1, 2020) that April rents have been deferred and evictions have been halted until May 15, 2020. We have received multiple emails and calls about this announcement, so let me clarify what was ordered and give some practical advice for the next few weeks.
First – Some Practical (and Critical) Advice
The last three weeks have been absolutely crazy, and it won’t stop (or even slow down) for a while. It’s easier said than done, but do everything you can to be patient and understanding in this unprecedented time. This situation has made EVERYONE nervous. Communicate with your tenants. Make sure they’re okay, safe, and taken care of. Buy them a case of toilet paper (if you can find some). If they can’t pay April rent, work with them on a deferment plan and forgive late fees.
What’s shocking to me is the indirect impact this has had on everyone. There are over 3,000,000 Utahans, and only about 1,000 have tested positive for COVID-19 (about 0.03%). But, everyone has been impacted by COVID-19 – You, your renters, your co-workers, friends, neighbors, etc. Some more than others, but it has impacted EVERYONE.
The Federal Government passed another stimulus package last week (the CARES Act) which will give average families with children thousands of dollars to help with expenses. The CARES Act also increased unemployment benefits (by $600/week) and lengthened unemployment as well (up to six months). Help is on the way for your tenants, but there’s a gap. It won’t be here quick enough to pay April rent on time and in full.
I think most tenants will pay April rent, but some have been hit so hard that it will be impossible. There’s a gap between (1) April rent that's due today and (2) when people receive the federal stimulus money and unemployment benefits. If you have a tenant who was otherwise a good tenant until they were impacted by COVID-19, it’s better to work with them than run the risk of trying to find another tenant who (1) may turn out to not be as good at taking care of the property and (2) who may also have been impacted by COVID-19 anyway. Be creative and flexible as you look for solutions.
Second – The Governor’s Executive Order
I’ll go through the Governor’s order next, but I want to make sure you didn’t skip Section One above. Before you continue, I’d encourage you to take a break, take a deep breath, and then read the above section a second time. Maybe even a third time. What I’ve already written is already much more important than what the Governor said today or what is in his order.
Now that you’ve read Section One again, let’s get into the Order.
In summary, here’s the main point – If your resident was current on their rent as of March 31, 2020, you cannot file an eviction until after May 15, 2020 if they are unable to pay April or May rent based on either (1) suffering a loss of wages or job loss as a result of COVID-19, OR (2) subject to a mandatory quarantine under a health department, OR (3) have tested positive for COVID-19.
As I stated above, why would you do what the governor just prohibited you from doing? If their ability to pay rent is impacted by COVID-19 and you evict them for that, you’re likely to re-rent your rental to someone that was just evicted out of their unit for the same reason. That doesn’t make sense.
Here’s the language (my comments are in Red):
NOW, THEREFORE, I, Gary R. Herbert, Governor of the State of Utah, hereby order the suspension of enforcement of Utah Code Title 78B, Chapter 6, Part 8 Forcible Entry and Detainer as the part relates to a residential tenant who:
1. is described in 78B-6-802(c) (which refers to pay or quit notices for failing to pay rent);
2. was current on rent payments as of March 31, 2020; and
3. meets one of the following criteria:
a. has suffered a loss of wages or job loss as a result of COVID-19;
b. has undergone self isolation or quarantine in compliance with an order issued by the Utah Department of Health or a local health department in response to COVID-19; or
c. has tested positive for COVID -19.
I further order the Department of Workforce Services to offer free mediation assistance to landlords and tenants when there is a dispute whether the tenant meets the criteria above.
This Order does not:
1. suspend enforcement of Utah Code Title 78B, Chapter 6, Part 8, Forcible Entry and Detainer, as the part relates to a commercial tenant;
2. prohibit evictions for any reason other than evictions for non-payment of rent by a tenant who meets the criteria above; or
3. create, require, or imply rent forgiveness.
Accordingly, a tenant remains responsible for all rent pursuant to the tenant's rental agreemnet.
This Order is effecive immediately and expires at 11:59 p.m. on May 15, 2020, unless otherwise modified, amended, rescinded, or suspended by me or by a succeeding governor.
After reading through the Order several times and answering questions for multiple clients, here are some of my general thoughts and takeaways of how this impacts both sides:
The goal is to allow sufficient time for stimulus and unemployment funds to bridge the gap. I don’t love it, but I also don't love COVID-19 and the Governor had to do something. I’m just glad we had a voice at the table to help with some input. This could have been A LOT worse.
Third – How many times have you read Section One?
Having said all of this, please read Section One above for a fifth time. No matter what this Order says, it would be best to be patient, calm, and understanding to the situation. I know being patient doesn’t pay a mortgage, but it will give you a chance to show empathy in a terrible situation. If you act aggressively, you can easily burn bridges, stifle communication, and then good luck getting anything from them when the stimulus money arrives. Being a friend, communicating with them, making sure they're okay, and gifting a roll of toilet paper to your tenants, could literally make the difference in getting rent when the stimulus funds arrive.
Fourth – The $5M Good News.
In exchange for working on this, the Utah Apartment Association is working to negotiate a minimum of $5 million payable as rent assistance for the tenants/landlords impacted by this situation. These funds are NOT yet guaranteed and will still take some work, but we are hopeful that this will be announced soon. The tenants need to apply and the checks are hopefully sent directly to landlords which benefits both sides. Any updates on this would come through the UAA's website (www.uaahq.org).
Finally – One Personal Request.
I know this freaks out landlords who rely on rent. But these are unprecedented times. We have to make adjustments. We have to be flexible. We have to look at the big picture.
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Utah Eviction Law