NYC-based boutique law firm Pardalis & Nohavicka brings the latest legal updates from the world of real estate. Pardalis & Nohavicka handles an eclectic array of matters, representing individuals and business owners in civil litigation, criminal cases and business transactions, currently litigating and representing clients throughout the United States and around the world.
At the end of December, Congress finally passed a new COVID-19 relief bill called the “Consolidated Appropriations Act, 2021.” Along with a second round of PPP loans and emergency rental assistance, the legislation also contains several relief strategies that aim to directly assist the real estate industry.
Emergency Rental Assistance
The act allocates $25 Billion Dollars for a rental assistance program aimed at providing households with financial aid to cover costs such as the payment of rent, utilities, and energy during COVID-19. The funds are to be distributed among the states based upon population, with a deadline of September 30, 2021 to use the funds.
- Eligible households may receive a maximum of twelve months of funding, plus an additional three months if necessary, to ensure housing stability;
- These payments made on behalf of eligible households will not be considered taxable income and may be applied for both past due rent and future rent payments (nine months of rental arrears, three months going forward);
- If an eligible household owes past due rent, assistance for prospective rent payments can only be made if assistance is first provided to reduce those rental arrears.
- At least one of the individuals occupying the residential property qualifies for unemployment benefits or has experienced financial hardship caused by the COVID-19 pandemic;
- At least one of the individuals demonstrates a risk of homelessness;
- The household income cannot not exceed 80% of the area median household income;
- Priority goes to applicants whose income is at 50% of the area’s median income OR if an individual in the household has been unemployed for 90+ days.
How this works:
- An application for emergency rental assistance may be directly submitted by an eligible household;
- An application may be submitted by a landlord on behalf of the eligible household. However, the landlord must receive the tenant’s consent by signature on the application;
- Should any payments be received, the landlord is required to apply the funds to that particular tenant’s rent arrears.
National Eviction Moratorium
The nationwide moratorium on residential evictions for failure of paying rent has now been extended through January 31, 2021. While this does not relieve tenants of their obligation to pay rent, it does prohibit landlords from evicting their tenants for the failure to pay rent.
Housing Co-ops Under PPP Round 2
Per the new act, the Paycheck Protection Program now includes housing cooperatives as eligible for the program but excludes condominiums.
As long as all PPP eligibility requirements are fulfilled, housing cooperatives that have 300 or less employees are eligible to apply for the loan.
This is good news for any struggling co-ops with commercial tenants that have lost revenue, as they could greatly benefit from a second round of PPP.
Congress has worked diligently to protect tenants during COVID-19, through moratoriums, and relief packages. This Act is specifically targeted at further assisting tenants but allowing the landlords in NYC to gain some relief as well, as the payments are directed towards rents. Furthermore, NYC tenants should note that the Housing courts have reopened, which will give everyone a better idea of how the recent changes in housing laws will actually be put into effect.
Real Estate and Corporate Transactions Attorney Nataly Goldstein is a graduate of Cardozo School of Law, where she served as President of the Real Estate Law Association. She is experienced in both residential and commercial real estate transactions, and she prides herself on guiding her clients through every step of their transaction, whether they are first home buyers or franchised businesses.