As New York crawls back to normalcy after a 15-month pandemic lockdown, many are still hurting from its economic impact — including tenants who have lost jobs and landlords who depend on them for their rental income.
The state’s moratorium on evictions — which has been extended to Aug. 31 — helps tenants and landlords for now but isn’t a panacea for unpaid rent when it comes due.
"Tenants need to clearly understand that there is no automatic rent waiver here, as a result of COVID-19, but rather there is a deferment on the payment of rent, only, as a result of the current eviction moratorium," notes Jaime Ezratty, an attorney with Horing, Welikson Rosen & Digrugilliers of Williston Park. "There will be a time when the rent will be able to be collected by the landlords."
Meanwhile, struggling landlords must deal with the increased financial pressure.
That is a problem for property owners — big and small — who still must pay their mortgages, real estate taxes, and other expenses on their homes, regardless of whether their tenants pay their rent, Ezratty notes.
Here’s some advice on how landlords can cope in this unprecedented time:
Call an attorney
After her tenant stopped paying her rent in September 2020, a landlord offered to discount the rent. When her tenant still didn’t pay and stopped answering her phone calls, she turned to Ezratty to bring her tenant to court over nonpayment totaling close to $40,000.
Maintaining that her tenant is gainfully employed and makes enough money to pay the monthly $4,200 rent, the landlord wants her tenant out. Ezratty prepared the petition and got an initial court date of Sept. 1.
"Normally — pre-COVID — we would have gotten an initial court date in March 2021 on this matter," says Ezratty, adding that he cannot forecast how long the entire process will take, especially considering the backlog of cases.
Get rent relief
As of June 1, tenants in New York State can apply for rent relief through the federal government’s $1.6 billion Emergency Rental Assistance Program, or ERAP. Anyone who has suffered financially due to COVID-19 and makes no more than 80% of their community’s median income could be eligible for up to 12 months of unpaid rent and utility bills, plus a potential additional three months of rent.
Though the U.S. Treasury released ERAP funds to the states early in 2021, New York was slow to set up the program to distribute the funds, frustrating tenants and landlords. To ensure their cases are prioritized, tenants are urged to apply as soon as possible.
For more information on the ERAP program, go to otda.ny.gov/erap.
Section 8 vouchers
One way to ensure payment is to accept tenants who have HUD Section 8 housing vouchers that cover most or all of the rent, depending on the renter’s income, and guarantees direct payment to landlords.
If tenants with these vouchers, who often also get other benefits, such as food stamps and Home Energy Assistance Program for utilities, don’t pay their portion of the rent, they lose the vouchers, explains Charles Weinraub, owner of The Handsome Homebuyer, based in Farmingdale, a business that owns about 100 rental properties throughout Long Island.
"So, most of the time, they pay their portion and you don’t have issues with tenants because they don’t want to lose their voucher," Weinraub says.
Of all his tenants on government assistance, only one in a three-bedroom in Suffolk County with a Section 8 voucher is not paying their portion, about $200, of the $2,350 rent, Weinraub says, adding that he plans to evict them once the moratorium ends, but in the interim he's still getting most of the rent from the HUD payments.
Other government assistance
More than 80% of Weinraub’s portfolio is through some kind of program: Section 8, Community Development Corporation, Suffolk Independent Living Organization, or SILO, or Options for Community Living, Weinraub notes.
"A good portion, if not the entire portion in certain cases, is directly paid through some type of government agency. And the tenants themselves are responsible for a small portion, if anything," he says.
In renting apartments, Weinraub makes sure that the household net income, after taxes, is at least three times the amount of the rent. This applies only to people who are paying rent on their own, not with government assistance.
Through the pandemic, Billy Alvaro, owner of Easy Sell Property Solutions, says his company, which has more than 50 rental properties scattered across Long Island and New Jersey, has stayed in close communication with tenants to assess their financial situations.
One of his tenants, Shannon Pendergast, a mother of three who lives in Mastic Beach and has been renting from Alvaro for the past decade, fell behind nine months’ worth of payment.
"She had all the reasons and documentation as proof as to why she fell behind," Alvaro says. "So instead of evicting her, my team worked with her. And, because of that communication, she followed through what she said she was going to do and now she’s the best tenant we have."
Pendergast, who had her hours cut from her nursing job five years ago, couldn't keep up with her rent and day care.
"I was really pounding the pavement, trying to find work and they worked with me the whole way," says Pendergast, 40. "Now when I can pay ahead, I pay ahead. I'm very grateful in that time by myself, with my three daughters, that they believed in me and gave me that opportunity and didn't just push us out."
Alvaro has worked with out-of-work tenants to see what they could afford to pay until they are once again employed.
"We almost acted like we were a bank and working out a deal with a person who had a mortgage," Alvaro says.
Alvaro works out flexible payment schedules and terms with people who need them.
"The one thing we agreed to was: any agreement we come up with between the tenants and ourselves, that’s the agreement we stick to," he says. "If they should fall behind on their promise, we have no other option than to evict once the eviction process gets lifted."
Get the right references
When checking references, Weinraub recommends not calling the landlord from the home they’re leaving, but the one before that, because they’re more apt to give an honest reference.
"If you’re renting a house from me and I’m having problems with you and I want you out, I might be inclined to not tell the whole truth about how you’re a terrible tenant, just as long as you get out of my place and into somebody else’s," he explains. "If you’re one-removed, you have nothing to gain."
Sell the house
Even before the pandemic, laws in New York have been trending away from landlords and in favor of tenants, notes Jim Clark, an attorney with Blodnick, Fazio & Clark of Babylon and Garden City.
"With landlords unable to enforce their leases for over a year-and-a-half, many landlords are throwing in the towel and just want to sell," Clark says.
If the house has tenants in it, the owner can still legally sell it, Clark says, adding that the new buyer would have to agree to take title subject to any existing tenancies.
If a landlord doesn’t have enough assets to pay their debts, another option is declaring bankruptcy, Clark says.
"However, if the landlord has a big mortgage on the rental property, then they may not because the mortgage holder is a secured creditor," Clark says. "If the property makes enough money to pay the mortgage but not much else, then the mortgage holder can allow the landlord to keep it to satisfy the secured debt obligation."
Take the slow road to foreclosure
Another route some landlords are taking is to stop paying their mortgages.
"This option results in the landlord’s credit being ruined and the landlord losing the house to foreclosure in the end, but for landlords who have an immediate cash flow need and are likely to lose the house anyway, this is an option," Clark says.
A tenant’s story
For Nathan Bradley, the pandemic was a perfect storm.
A heart patient, he was out of work for three months and contracted COVID-19 in March, falling behind on the $1,750 monthly rent on the Middle Island home he rents from Billy Alvaro, owner of Easy Sell 411.Com. His fiancee, Tia Allen, who lives with him, also had health issues and was out of work for three months.
"I told them what was going on and they told me that they would work with me. Just send them what I can," says Bradley, 55, a group home manager. "To catch up, I send them money every week. They’re great: they work with me."
Even before he fell behind on rent, Bradley says Alvaro’s company would call him periodically to see how he was doing.
"It wasn’t even just questions of ‘Where’s my money?’ We’re really concerned about you."
Tenants can call Nassau-Suffolk Law Services for free help with problems related to eviction, conditions in the apartment or issues related to Section 8 vouchers, says Vivian Storm, director of communications and community projects for NSLS.
"We service people across all of Long Island. We have offices in Hempstead, Islandia and Riverhead."
For information, tenants can call Nassau-Suffolk Law Services at 631-232-2400 or 516-292-8100.