Paletz law: Moratoriums on tenant evictions hamper financial stability of landlords and will not help long-term tenants

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DETROIT – (COMMERCIAL THREAD) – President Biden’s announcement that the Centers for Disease Control and Prevention (CDC) has issued another moratorium on tenant evictions until October 3, not only do landlords falter again, but will also affect status long-term tenants, according to the owner’s law firm, Paletz Law.

According to Matthew Paletz, CEO of Paletz Law, the extension of the moratorium, intended to keep tenants in their homes during another spread of COVID, comes at a long-term price.

“With the abundance of rental assistance, why should landlords continue to be penalized for not being able to earn rental income from their properties?” Paletz said.

One of Paletz’s clients, Omar Shouhayib, who owns and manages more than 30 properties in Michigan, Illinois and Ohio, says everyone is suffering the consequences of yet another expansion.

“It creates moral hazard. I have tenants who are not even late in paying their rent and who roll the dice asking whether they should keep paying or try to ask for government help, ”Shouhayib said. And while the president has insisted that up to $ 47 billion in federal money is available, Shouhayib says it’s not reaching the people who need it most, the tenants. “I have tenants in trouble because they weren’t approved for their help or never received it,” he added.

Paletz believes tenant debts are going to have long-term implications for landlords who cannot afford not to receive compensation. “These are not big business conglomerates. Almost half of all rental properties are made up of four units or less and almost 80% are owned by Mom-and-Pop owners.

Jeff Scott, is the owner and partner of Michigan Management and past president of the Detroit Metropolitan Apartment Association. He says his company, which manages more than 600 properties, believes the number of potential evictions is overstated.

“The number of offenders in my portfolio has not changed. It’s still about 5%, which was where it was before the pandemic. The only thing that has changed is that their balance is significantly higher, ”he said.

A bigger legal problem, according to Paletz, is the overbreadth of the CDC. “These moratoriums are an unfunded government mandate forcing landlords to lease their properties without being compensated. It unfairly burdens my clients with insurmountable debt.


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