Rental Regulations Monthly: New York’s Eviction Moratorium Ends, National Rental Assistance Reallocation, Texas Flood Disclosure Law

Welcome to Rental Regulations Monthly, Obligo’s monthly digest of recent regulatory news impacting the rental market. Whether you’re a property owner, manager, or a renter, we’re here to highlight some key changes in the ever-shifting regulatory landscape of rental housing.

January is always a busy time for lawmakers to work on and implement policy changes for the new year. The Treasury Department is reallocating over $1.1 billion of pandemic rental assistance across the nation, but not every city or state got what they asked for. In states like New York, where the COVID eviction moratorium has recently ended, legislators have turned their attention to rent relief and “good cause” evictions. Texas enacts the strictest flood disclosure rule to date. Read on to see how these changes might impact you.

Eviction Moratorium Ends in New York & Boston

New York’s COVID eviction moratorium ended on January 15 and newly confirmed Governor Kathy Hochul didn’t push to extend it. Instead, she has been working with the State Legislature to figure out solutions for the potential surge of evictions statewide.

In early January, the borough presidents of Manhattan, Bronx, Brooklyn, and Queens united to call for an extension, but now lawmakers are shifting their focus to a “good cause eviction” mandate, a bill that will essentially put a cap on rent increases and protect renters from being evicted without “just cause,” as decided by a judge. In a letter to Governor Hochul, 37 state legislators and other local elected officials demanded a permanent solution to protect New Yorkers from displacement. The bill is hotly debated as landlord groups worry that it would encourage “permanent tenancy” and damage their ownership rights. The bill was referred to judiciary on January 5, but further timeline is unclear.  

After Boston Housing Court Judge Irene Bagdoian overturned the city’s eviction moratorium in November last year, Mayor Michelle Wu has tried without success to reinstate those protections.  As of now, evictions can proceed within city limits. 

Like New York, the state of Massachusetts also has a just cause eviction bill in the pipeline. On January 11, Massachusetts’ Joint Housing Committee held a virtual hearing for 20 landlord-tenant bills, one of which, S889, asks that evictions be based on a limited number of “just causes,” such as if the tenant created a nuisance or substantial damage to the unit, or used the unit for illegal purposes.

Our Insights

For Renters: When you sign a new lease, consider properties that offer deposit-free renting so you can save some money for extenuating circumstances. If you’re in a tough spot with rent payment right now, try talking to your landlord and finding a solution before getting an eviction notice. Be sure to check city or state websites for emergency rental assistance as well. 

For Owners & Managers: When you need to file evictions, it’s helpful to document reasonable causes and your previous attempts to collect payment. If you want to keep up with eviction-related regulations, follow our Rental Regulations Monthly blog to stay in the loop. For seamless protection, you can also consider Obligo’s deposit-free billing authorization, which keeps landlords secure and renters accountable. Learn more about it here.

Treasury Shifts $1.1B in Rental Assistance to NY, DC, CA, WI & Others

With a surge of evictions looming, local governments turn their hope to more rental assistance. The Treasury Department is reallocating over $1.1 billion of unused rental aid to states and cities that spent their first round quickly. However, more than three-quarters of the reallocations were ”voluntary transfers” between cities or counties within the same states, which means many other states and cities will only get a fraction of what they’d hoped for. 

New York State, for instance, will receive about $27 million, less than 3 percent of the $996 million it requested. The state of Texas has requested $3 billion but will not receive any additional funds on the state level (though certain cities and counties will receive funding). Philadelphia, whose rental assistance program ended on January 7, applied for $485 million in additional funds but will only receive $8.3 million.

In the reallocation, Washington DC stands to receive about $17.7 million to revive the pandemic relief fund that ran out of money in October of last year. California will receive over $68 million and New Jersey $43 million. States like Arizona, Georgia, Indiana, Wisconsin and others voluntarily reallocated approximately $875 million of funds previously received to their own cities and counties in need. Milwaukee is poised to receive the biggest amount in this reallocation group, with $61 million for the city and another $50 million for the county. 

Our Insights

For Renters: More renters are in need of emergency assistance now, but federal funds are drying up quickly and local demands show no sign of slowing down. If you’re grappling with pandemic-incurred financial loss, check your city or state government’s website to see if there are open programs to help with rent and security deposits. 

For Owners & Managers: These government rental assistance programs, while beneficial to renters and landlords, may add more operational overhead for property owners and managers, including more payment sources to track. Obligo offers a holistic suite of deposit solutions that can simplify your leasing and accounting workflow. Schedule a demo to learn more.

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Texas Enacts Strict Flood Disclosure Law

January 1, Texas’ bill requiring landlords to disclose flood risk to renters went into effect. This law is considered the strictest in the nation because it not only asks landlords to disclose the flood history of a rental property, but also whether the property is located in a flood zone. 

Previously, California, Georgia, New Jersey, Oklahoma and Oregon were the only states that had landlord flood disclosure requirements, but, notably, each of them have limitations that differ from the new Texas law. For example, Georgia and Oklahoma landlords only need to disclose if an apartment has been flooded in the last five years (and for Oklahoma, only if the fact is known to the landlord). The other three states require landlords to disclose if an apartment is in a flood zone only.  

The Texas bill requires that the disclosure must be “given in writing for every rental and in a document that is separate from a lease.”

Our Insights

For Renters: Be mindful of the area in which your rental unit is located, especially if you live in a state with severe weather conditions. Do thorough research before signing a lease and hold your landlord accountable for proper disclosures. If your building happens to be in a flood zone, be sure to check whether it’s eligible for flood insurance.

For Owners & Managers: Typically the best rule of disclosure is to be open and honest with your tenants. Trust and transparency will benefit your business in the long run. But if you are not clear on the specific rules for disclosure, such as verbal or written, make sure to consult legal resources to stay compliant. 

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*Disclaimer: The contents of this publication are for informational purposes only. This publication does not render legal or other professional advice or opinions on specific facts or matters, and should not replace consultation with an attorney. 

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