Eviction Moratorium - What is means for Landlords and Tenants - and Why BOTH are struggling.

Dated: October 20 2020

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The state of Hawaii is currently under an eviction moratorium through November 30, 2020.  While there are other moratoriums that may apply (i.e., certain loan types or the CDC), for this discussion - we will only address the existing orders in Hawaii.  

The current Hawaii eviction moratorium provides that a Landlord cannot evict a tenant for non payment of rent.  According to the Hawaii Consumer Protection website, the only permissible reasons for removing a tenant while the order remains in effect is 1 - a material breach of the rental agreement; and 2 - that the premises become unfit for occupancy.  This also means that rent cannot increase during the period of a moratorium.  For reference please see:  https://cca.hawaii.gov/ocp/landlordtenant.

Hawaii had the nation's record for worst unemployment during the month of September, 2020 -- and many of our residents, tenants and landlords alike, are struggling to make ends meet.  While there have been some efforts at aid to struggling renters -- like distributing CARES Act funds via Catholic Charities and United Way -- the system was quickly over burdened and shut down after receiving more than 20,000 applications for assistance.  Many renters declare that not enough is being done - from waiting months for unemployment to waiting months to hear whether assistance is forthcoming - they are feeling vulnerable and are dealing with the daily feelings and stress of being at risk of losing their housing for themselves and their families. 

While Landlords with certain types of mortgages may be able to seek forbearance or deferment, there has been no actual relief aimed at helping Landlords.  All relief is aimed at Tenants with the idea that the money/relief will make its way to the landlords in the form of rent.  Yes, tenants can delay paying utiltiies in favor of paying rent, or use some of their unemployment to pay rent -- but when a tenant is not sure when or if they are getting their job back, priorities shift to day-to-day survival -- and without a current risk of being evicted, the priority for many is not rent.  Hawaii has an overwhelming number of "mom and pop" owners: individuals who have turned a property into a rental property to supplement their income, or to pay for senior care home expenses for a loved one.  For these landlords where a mortgage forebearance will not be of any use and where there is no relief aimed at providing for their lost income -- it's dire and some are increasing their debts or seeking to sell in hopes of using the proceeds to pay for their immediate needs.  

This leaves everyone wondering, what's next ... will tenants be evicted when the moratorium ends and they still can't pay rent?  Will more and more Landlords start selling their properties as they can't make up for lost mortggw payments, which will strangle the rental market by reducing inventory and driving up demand?  Will our government continue to protect tenants at the continued expense of Landlords, or will they step in and help both?  What are your thoughts?  

Link to recent Civil Beat article:  Renters In Hawaii Are Struggling. So Are Their Landlords

The above references an opinion and is for informational purposes only. It is not intended to be legal or financial advice. Consult a legal or financial professional for advice regarding your individual needs.

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Kasandra Shriver

Kasandra Shriver started her career in real estate 2012, and joined HomeQuest, Realtors LLC in 2014 where she is a REALTORĀ® Broker. She is a homeowner and investment property owner and has both the ....

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