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Utah Gov. Gary Herbert issued an order Wednesday allowing Utahns directly hit by the coronavirus emergency to defer rent payments until May 15.
The Republican governor’s latest emergency order, announced in an online videoconference, also bars Utah landlords from initiating eviction actions against those affected by COVID-19, also through May 15.
“This is an appropriate practical notice at this time to help give some certainty and eliminate some confusion, apprehension and fear that is out there in the marketplace today,” Herbert said Wednesday.
Thousands of Utahns have lost their jobs in recent weeks due to government-ordered social distancing to slow the virus and a number of them are unsure of how to pay their April rent. Herbert’s order came as countless legal clocks had begun to tick, foreboding a wave of new delinquencies and notices of evictions to come.
“We thank and congratulate the governor for standing with Utah renters,” June Hiatt, an organizer with a grassroots group called Utah Renters Together, said after the announcement.
William Heinig, a 23-year-old convenience store worker and apartment renter in Salt Lake City whose work schedule has been halved in recent days, said the order appeared to at least temporarily delay the prospect of a three-day pay or vacate order against him.
“I’m happy he’s done it,” Heinig said of the decree.
But the order is not an across-the-board rent or eviction freeze as it appeared Herbert had first announced Wednesday. His staff sought later in the day to correct several miscues in his initial briefing.
His written decree amounts to a 45-day suspension of the state’s existing eviction law, one of his advisors said — and even then, in narrow circumstances.
It only applies to tenants who’ve kept up on rent through March 31 and have either lost their jobs or seen pay cuts due to the coronavirus or public orders to contain it; been subjected to a mandatory quarantine in the crisis; or who are actually infected with COVID-19.
So the order — which caught some in Utah’s residential real estate sector off guard — only offers help to a small portion of the estimated 30% of residents who rent. And this calls for a delay in payment; these tenants will still owe the money down the road.
“This is not rent forgiveness,” said Paul Smith, executive director of the Utah Apartment Association, representing more than 2,500 landlords and roughly a third of the state’s rental units. “Tenant who can still pay needs to pay rent.”
At least 34 states have issued similar moratoriums on evictions as of this week in reaction to the COVID-19 emergency, though executive actions or orders through their court systems.
Herbert also said the order — drafted in recent days in tandem with court officials, industry representatives and others — does not ultimately relieve COVID-affected renters of their obligations long term. Rather, he said, it allows them to delay those payments as they cope with the outbreak and seek other government aid to dig out from its deep economic effects.
The order also does not halt evictions of tenants who run afoul of their leases in other ways, such as criminal behavior, property damage or prior rent delinquencies unrelated to the emergency.
A spokesman for Utah’s courts confirmed Wednesday that the state’s legal system remains open for its key functions amid the crisis and continues to process those and other legal filings.
And while in his initial verbal announcement Wednesday, the governor said the 45-day rent and eviction reprieve also applied to tenants of commercial properties, his staff later said that wasn’t the case.
So, while temporary relief is coming for some who rent their single-family homes or apartments, the order does not grant a similar grace period to thousands of the state’s small and medium-sized business owners and other commercial tenants.
Many of those business owners have seen their customer bases all but wiped out by recent public-health decrees, even as rents come due. The best answer Wednesday to what they should do in this emergency seemed to be: continue to seek help from the federal government.
Doug Jardine, owner of a nail salon in Midvale — who joked that he did “somersaults and jumping jacks” over Herbert’s initial statement on commercial tenants — was later crestfallen over the reversal.
In a story writ large across Utah’s economy, Jardine and a handful of other commercial tenants of a small Midvale strip mall known as Fort Place say they are facing permanent closure due to their inability to pay April’s rent, for want of landlord forebearance.
“That’s not good news for us," Jardine said of Herbert’s order.
On a recommendation two weeks ago from the state Apartment Association, many of Utah’s residential landlords had already begun to offer rent-deferral plans to their tenants in connection with the coronavirus.
Smith, the association’s director, said he hoped Wednesday’s decree would create space for additional renters who are struggling until they begin receiving state jobless benefits or the promised $1,200-per-person aid checks reportedly on their way from the U.S. government.
“Landlords are in the housing business, not the eviction business,” he said. “So if we've got to work with them and defer rent for a short time between now and when they get their unemployment or federal check, we're happy to do that.”
Leading government lenders such as Freddie Mac and Fannie Mae have also deferred mortgage payments and halted evictions and foreclosures on their borrowers, including those who own rentals — as long as those landlords also delay evictions for their tenants.
Those lenders are thought to back or own as many as two-thirds of home mortgages in Utah.
But it wasn’t entirely clear Wednesday what recourse remained for thousands of residential property owners and so-called mom-and-pop landlords whose loans aren’t covered by those programs — many of whom rely on rental income for their basic needs or to make their mortgage payments.
Smith said in exchange for support from industry officials on the narrow rent freeze, state officials had promised a minimum of $5 million for rental assistance on behalf of struggling tenants, to be paid to landlords in that situation.
Those funds, he said, are also on their way to Utah as part of the immense package of federal aid in the recently passed $2.2 trillion stimulus to address the COVID-19 crisis.
According to one of Herbert’s advisers, the decree does not address relief on fees often charged to renters for late payments, which under Utah law can accrue quickly when tenants fall behind.