Some Additional COVID-19 Related Questions And Answers

Fox Rothschild LLP

Fox Rothschild LLP

A couple of (well, four) quick pandemic-centric questions today:

  1.  As we have all seen over the past few months, some amenities at apartment communities (gyms, pools, fitness centers, community rooms, games rooms, and the like) were closed or remain closed because of government health restrictions. Can residents pay reduced rent because amenities bargained for are not available? While the language in each individual lease may differ, it is likely the answer is no. Many leases provide that even in the event management is forced to close an amenity, when it does so because of a government mandate (such as COVID-19), residents may not be legally entitled to a rent credit.
  2. If a resident is behind on his or her rent due to economic hardship, does management still have to respond to maintenance requests on that unit? In a word, yes.
  3. A common apartment scenario is that of multiple residents on a lease. What happens if only one resident is financially impacted by the pandemic? Is the full rent still due? In almost all cases, the answer is again yes. Most leases have what is known as “joint and several” liability – such that if one resident cannot pay his or her portion of the rent, the other residents are responsible for the total amount. Now, a best practice, even going on more than five months in the COVID-19 era, is to still work on an individual basis with residents having difficulty paying their rent.
  4. Now, for those of you on the affordable housing side: We have all heard much about the direct payments to individuals and households under the federal CARES Act. But are those payments considered income for U.S. Department of Housing & Urban Development (HUD) reporting purposes? Well, according to guidance issued by HUD, the “economic impact payments” received from the federal government are not to be included in calculations for HUD tenant income.

I look forward to the time when I can stop writing COVID-19 focused blog entries. I fear it will still be a while.

Just A Thought.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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