The CARES Act has expired. Can properties begin charging late fees?
Now that the CARES Act has expired the common question has been “Can residents now be charged a late fee? Assuming the CARES Act deadlines are not extended in the new stimulus bill being discussed by Congress, then late fees can be assessed for late August rent payments and the months going forward. However, just because the CARES Act deadlines have passed properties cannot retroactively charge late fees for any rent payments late between March 26 and July 25.
Q21: Can an owner or agent of a multifamily property covered by the CARES Act carry forward late fees and related charges that were initiated prior to enactment of the CARES Act? Can these owners or agents add additional fees, or assign new fees or charges for delinquent rent, and wait to bill those fees after the end of the relevant eviction moratorium?
A: An owner or agent of a multifamily property covered by the CARES Act may only charge fees and penalties during the eviction moratorium if the charge is wholly unrelated to a tenant’s nonpayment of rent. However, during the eviction moratorium, the CARES Act prohibits an owner or agent from filing for possession of a unit for nonpayment of any rent, fee, or charge. This holds true regardless of the date the fee or charge was initially assessed. While the CARES Act is silent on what an owner or agent can charge after the eviction moratorium ends, HUD’s interpretation of this provision is that fees and charges that could not be assessed during the eviction moratorium should not accrue and should not be charged after the moratorium ends; however, rents not paid during the moratorium, as well as fees assessed prior to the eviction moratorium, which took effect on March 27, 2020, may be collected.
The Texas Apartment Association (TAA) continues to encourage members to work with residents directly affected by the coronavirus, and to waive late fees. Almost immediately after the pandemic began and the economic impacts rippled, the TAA issued new forms to give rental property owners and managers the proper document needed to waive late fees for some period of time, and/or to set up an agreed-to payment plan for rent payments, similar to the Eviction Holdoff Agreement. These forms are still available on both AAA and TAA websites under the Coronavirus Resources page.