Already a client and need help determining your CARES Status?
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Not a client quite yet? Keep reading below to learn more about the Federal CARES Act and how it might affect your property. You’ll also find our free affidavits and sample lender letter verbiage, should you need them.
What is the CARES Act?
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. Included in the CARES Act was a 120 day eviction moratorium, which prohibited property owners from filing non-payment of rent evictions, among other things. It also included a requirement that property managers of a “COVERED” Property (one with a “Federally-backed” mortgage loan) must provide a Notice to Vacate letter to all tenants at the property, which must be given at least 30 days ahead of when they will be required to vacate the Premises. Importantly, while the original eviction moratorium may have expired on July 28, 2020, the 30 day Notice to Vacate requirement did NOT expire! This is why we track each Property’s CARES Act status and ask our clients to provide documentation of their status before we move forward with representation.
Why do I still have to send a 30-day NTV?
- The Property is re-financed into a new mortgage that is NOT “Federally-backed”;
- The mortgage is paid off and the Property is owned free and clear; OR until
- The CARES Act is repealed by Congress or disavowed by the Supreme Court.
So what does this mean to me if I’m covered?
If your Property is COVERED (because of the type of loan), it means that Sec. 4024(c) of the CARES Act will continue to require you to send a Notice to Vacate letter to all residents who are behind in their payment of rent at least 30 days before you can have the tenant(s) removed from the leased Premises (NOTE: the 30-day NTV is not required to file for other breach of lease cases — only non-payment ones.)
Compliance Tips: 1) A “30 day NTV” letter is one that (at a minimum) tells the resident they have failed to pay “Monthly Rent” and so must vacate the Premises (but may not require they do so sooner than 30 days from the date of the letter); and 2) All non-payment eviction cases submitted to usMUST include the NTV letter the tenant was given so we can review and then file the case for you at the correct time.
Remember: You should continue providing a CARES Act Notice to each non-paying tenant unless:
- your Property’s mortgage loan type changes (due to a sale or a re-finance, in which case let us know via the form at the bottom of this page); or
- Congress, HUD or a Federal Court confirms that the CARES Act Notice to Vacate requirement has come to an end or is no longer applicable.
What are Covered Properties?
For any property that has Federally-backed mortgage financing, we call these “COVERED Properties” and label them in our system so we can differentiate them from EXEMPT Properties (see the next topic to the left for more).
Keep in mind that Section 8 voucher-holders automatically have COVERED status for their Unit under the CARES Act (regardless of the loan type). So a CARES Act NTV (along with a few other items) must be sent to every voucher-holders Unit if they fail to pay their rent, and uploaded to our system when you request a filing for non-payment of rent.
Point of Clarification: The expiration of the “eviction moratorium” did NOT remove the obligation to send these 30 Day CARES Act notices, so we are still required to collect these Notices from you as part of our case review process. Unless/until we have a change in the law from Congress, please always upload a 30 Day NTV as part of all new case submissions for a COVERED Property.
What are Exempt Properties?
For any property that does NOT have a Federally-backed mortgage, that property is able to conduct business with the Courts based on the pre-pandemic notice requirements under your State’s eviction laws.
In order for our attorneys to approve your cases for an Exempt property, however, we first need documentation of the Exempt status for our files (and to provide to the Court if this issue is raised by a tenant’s attorney, for instance). Choose the appropriate tab to the left based on your unique situation to find specific requirements.
So, we recommend that all clients reach out to their lender/servicer and ask them to provide formal written confirmation of whether the property has a Federally-backed mortgage loan as defined in the CARES Act. If the Property is backed with a loan covered by the CARES Act, then we will note it in our records; but, if the lender confirms the loan is either not Federally-backed or if the Owner confirms they own the Property free and clear, then we just need some confirming documentation for our files – again, in case we need to provide it to the Court in support of our claim for an eviction judgment.
My Build to Rent Community is Exempt. What next?
For a Build to Rent Community: we need either a signed letter on letterhead (not an email) from the lender/servicer of the Loan that includes crucial information about the loan (see, e.g. the sample verbiage below); or as an alternative, an affidavit from a C-Suite Executive or General Counsel for the Company, OR a similar letter from the closing attorney would also suffice.
Our Company is the [lender]/[servicer] of the loan(s) issued to or for the benefit of the Owner of the property known as [Property Name] – [Owner Legal Name] located at [Property address]. As such we are familiar with the nature, backing and issuance information for all such loan(s). We hereby confirm that there are no loan(s) in place for this Property that meet the definition of the term “Federally-Backed Multifamily Mortgage” as defined by Sec. 4024(a)(5) of the CARES Act.
Regardless of who writes the letter, it must be: (a) on letterhead; (b) signed in ink or via e-signature, with name & title of the person signing; & (c) it must include the property’s legal name and list of physical addresses.
My Multi-Family Apartment Community is Exempt. What next?
For a Multi-Family Property: we need either a signed letter on letterhead (not an email) from the lender/servicer of the Loan that includes crucial information about the loan (see, e.g. the sample verbiage below); or as an alternative, an affidavit from a C-Suite Executive or General Counsel for the Company, OR a similar letter from the closing attorney would also suffice. [NOTE: If you provide a letter from someone other than the lender, you will need to adjust the language]
Our Company is the [lender]/[servicer] of the loan(s) issued to or for the benefit of the Owner of the property known as [Property Name] – [Owner Legal Name] located at [Property address]. As such we are familiar with the nature, backing and issuance information for all such loan(s). We hereby confirm that there are no loan(s) in place for this Property that meet the definition of the term “Federally-Backed Multifamily Mortgage” as defined by Sec. 4024(a)(5) of the CARES Act.
Regardless of who writes the letter, it must be: (a) on letterhead; (b) signed in ink or via e-signature, with the name and title of the person signing; and (c) it must include the property’s legal name and physical address.
My Single-Family Rental is Exempt. What next?
If the Property is NOT Federally-backed, then we will need a signed letter on letterhead (not an email) from the lender/servicer of the Loan that includes crucial information about the loan (see, e.g. the sample verbiage below).
Our Company is the [lender]/[servicer] of the loan(s) issued to or for the benefit of the Owner: [Owner Legal Name(s)] of the property located at: [Property address] . As such we are familiar with the nature, backing and issuance information for all such loan(s). We hereby confirm that there are no loan(s) in place for this Property that meet the definition of the term “Federally-Backed Mortgage” as defined by Sec. 4024(a)(4) of the CARES Act.
The letter must be: (a) on letterhead; (b) signed in ink or via e-signature, with the name and title of the person signing; and (c) it must include the property’s legal name and physical address.
We don’t have any mortgage at all. What next?
- For any Multi-Family Property or Build to Rent Community that is NOT subject to any mortgage and is owned Free and Clear, we’ll need the Owner (or a C-Suite Executive or General Counsel for the Company, OR the closing attorney for the purchase of the Property) to provide us with an Affidavit confirming the Property has no mortgage loan.
- For any Single-Family Property that is NOT subject to any mortgage and is owned Free and Clear, we’ll need the Owner of the property to provide us with an Affidavit confirming the Property has no mortgage loan.
