City of Austin Passes CARES Act Landlord Disclosure Requirement
Attention all MH Community owners with interests in the City of Austin:
The City of Austin passed an ordinance requiring that if a resident submits a written request asking if the property is covered by the CARES Act, the residents’ request must be answered within five days via email, resident portal, or posted to their door.
As we have previously posted, the CARES Act contained many key provisions for “covered properties.” Namely and the most publicized is the 120-day moratorium on evictions and late fees. The moratorium is currently set to expire on July 25 for “covered properties.”
Recall that a “covered property” is a tax credit property, property that participates in federal housing programs, and those with Fannie Mae or Freddie Mac mortgages. The two later categories of GSE owned commercial multi-family loans are the most common areas a possible MH community would fall under the “covered property” definition.
The City of Austin passed a new ordinance in conjunction to the federal CARES Act that adds a new prompt disclose requirement on a landlord after a tenant makes a written request to the landlord to know if the property is a “covered property.”
The wording of the ordinance leaves some ambiguity as to its applicability to a MH community where the lot only is leased. The ordinance will apply when both a home and lot are leased together.
However, based on the City of Austin’s prior application, it should be expected that they might similarly apply such a provision against an MH community that only leases lots.
There is no required language for the discloser provided to the residents, and photographs, acknowledgment of receipt or video can be used as proof that the disclosure was delivered.
Penalties for Failure to Provide Notice
The ordinance contains a significant penalty if a landlord fails to timely respond to the residents’ written request.
The penalty can be up to $500 per day, per offense that the landlord fails to provide the notice. If a landlord were to receive multiple tenant requests, and then failed to respond to the multiple requests for many days, the liability could grow significantly and quickly.
It is important for applicable property owners to be aware and make sure their management teams are aware to monitor when these requests come in.
How do I know if my property is a covered property or not?
MH Community owners and managers can utilize the three searchable lists to determine if your property is a covered property*:
National Low-Income Housing Coalition List
The Fannie Mae tool.
The Freddie Mac tool.
*Note: None of these lists are exhaustive.
Ordinance Expiration Date – September 30
This City of Austin ordinance does not expire until September 30, 2020.
Note that this is different from the timeline on the moratorium, which is July 25, with a then 30-day notice of eviction requirement. Essentially, pushing non-payment evictions for covered properties to August 24.
Conceptually, even after the end of August, a tenant could request if the property they rent was now previously considered a “covered property” and a landlord be held liable for the failure to provide notice during a month (September) when the CARES Act provisions no longer apply.