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The CDC just gave an order that bars residential landlords from evicting tenants for non-payment of rent if a tenant’s estimated 2020 income is no more than $99,000 (single) or $198,000 (married, filing jointly). Some states also have this order in place too.
(California has an eviction moratorium till February 1 2021.)
However despite this CDC notice, there are circumstances that allow for evictions such as where a tenant:
- criminal behavior
- threatens the health or safety of other tenants
- is damaging to the property or poses an immediate risk of damaging the property
- is violating any building codes health ordinance, or similar health and safety regulations or
- is violating any contractual obligation other than the timely payment of rent
In order to avoid paying the rent, the tenant must file a declaration to the landlord and signed under penalties of perjury providing that the tenant:
- Has used his or her best efforts to obtain all available government assistance for rent or housing and,
- Falls within the income restrictions (under $99,000 for singles, and under $198,000 income in 2020 for married filing jointly),
- Is unable to pay the full rent due to a substantial loss of household income loss of work or wages or extraordinary out of pocket medical expenses,
- Is using his/her best efforts to make partial payments that are as close to the full rental payments as the tenant’s circumstances permit and,
- Would likely become homeless or forced to move into and live in close quarters or a shared living space
I should note that while the tenant does NOT need to provide any proof, the landlords can challenge this declaration in court. If however the landlords ignore this CDC order, they are subject to a fine of up to $100,000 and possible criminal penalties.
Also of note is that while there is a moratorium on evictions, the tenant still owes the rent. If the lease allows, the landlord can still charge the tenant interest and penalties on unpaid rent.
TIP: While there is a moratorium on evictions there does not seem to be a moratorium on suing the tenant for the rent.
Finally landlords may be able to deduct the expenses on the property that might create a loss. However the passive loss rules that limit losses against rental income might apply to limit your losses for this year. While there are exceptions to the passive loss rules such as the $25000 loss allowance and the allowance of losses for real estate professionals. See your tax professional or consult a Taxbot Certified Tax Pro about this.
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