The Covid-19 Emergency Rental Assistance Program of 2021, or “ERAP,” is a dedicated fund for the payment of rental arrears owed by eligible tenants who were unable to make rental payments during the Covid-19 pandemic. Last week, it was announced that the State Office of Temporary and Disability Assistance (“OTDA”) will begin accepting applications from eligible tenants and building owners who apply on behalf of their tenants commencing on June 1, 2021.
Renters and Owners must apply online using the OTDA portal (https://nysrenthelp.otda.ny.gov/en)
Rent is not cancelled. Rather, it is being paid for by a nearly $2.4 billion fund for New York State from the Federal government, with monies allocated for this express purpose from the Consolidated Appropriations Act of 2021 and the American Rescue Plan Act of 2021. The fund will cover up to twelve (12) months of rental arrears plus up to three (3) months prospective rent. The program can also pay for up to 12 months of overdue electric or gas bills. Payments will always be issued directly to the building owner or the utility provider. However, prospective rent payments are only available to “rent burdened households”, defined as households that pay 30% or more of their gross monthly income in rent.
There are still many unanswered questions as to how this program will be administered. However, at present, the OTDA website provides:
Tenants who apply for rental assistance must upload the following documents to the portal:
- Personal identification for all household members (passport, driver’s license, birth certificate, government issued ID, etc.);
- Social Security number (Individuals do not need to have a lawful immigration status in order to qualify;
- Proof of rental amount (signed lease, cancelled checks; rent receipt, etc);
- Proof of residency/occupancy (signed lease, utility bill, school records, bank statement, insurance bill or driver’s license);
- Proof of income to demonstrate income eligibility under the program (documents demonstrating monthly income, such as pay stubs OR documents setting forth annual income for 2020 such as a W-2 tax form or filed income tax return OR self-attestation of income, under certain circumstances).
The tenant will also need to attest that on or after March 13, 2020, a member of the household received unemployment benefits or experienced a reduction in household income caused by the Covid-19 pandemic.
Owners may also file an application for relief under ERAP on behalf of their tenants. If submitted by the building owner, the owner must receive the tenant’s consent by signature on the application. Should any payments be received, the landlord is required to apply the funds to that particular tenant’s rent arrears.
The Owner will need to submit the following:
- A completed W-9 tax form;
- A copy of the tenant’s executed lease or some documentation showing the last full monthly rent payment made by the tenant;
- A rent ledger demonstrating the total amount of rent due and owing;
- Banking information for the building owner to be used for the direct deposit of funds
When the Building Owner accepts payment for rent under the program, acceptance of the payment constitute an agreement that :
- The ERAP payment satisfies the tenant’s full rental obligation for the period covered by the payment;
- No late fees may be charged for that payment;
- The monthly rent is frozen at the current rate and there may be no rent increase for a year;
- No eviction by reason of an expired lease or holdover tenancy for one year after receipt of payment. There is an exception if the building contains four or less units and the owner or immediate family intend to immediately occupy the unit as their primary residence, and
- The owner must notify tenant of these protections.
Immigration status is not a barrier to eligibility. Full-time college students who are listed as dependents are not eligible. Once applications are available from OTDA, for the first 30 days, up to 65% of the funds will be available for NYC and at least 35% will be made available to localities outside NYC. Also during those first 30 days, the funds will be allocated first to priority tenants as defined in the statute (described further below). After thirty (30) days, money will be allocated on a rolling basis.
The federal statute states that the greatest priority shall be given to households earning up to 50% AMI and have one or more individuals who are unemployed as of the date of application and have been unemployed for at least ninety (90) days prior. The state statute added additional priority groups as follows:
- Mobile home tenants; or
- Households with at least one individual from a “vulnerable population”, i.e. domestic violence or human trafficking victim or veteran; or
- Households with a pending eviction proceeding; or
- Households from communities disproportionately impacted by Covid-19 as established by OTDA regulations; or
- Household resides in a dwelling consisting of 20 or fewer units.
OTDA shall establish procedures for determining eligibility and what information should be provided by households applying for assistance. The state statute says that such procedures should ensure flexibility when determining acceptable documentation and will allow for self-attestation.
A property owner has certain obligations while the application is under review:
- The landlord cannot bring an eviction proceeding based upon the expiration of the lease or the nonpayment of rent until the application for benefits has been determined; and
- If proceedings have been started, the proceedings cannot be continued until the application for benefits has been determined.
All other obligations under the lease remain. A property owner may still commence an eviction proceeding based upon a violation of the lease or tenancy or due to a tenant’s nuisance conduct. A tenant has the right to submit proof of receipt of payment of benefits in a legal proceeding, creating a presumption that the rent or utility has been paid for the payment period. Then the burden rests on the property owner to prove that payment was not, in fact, made.
As noted above, OTDA has not yet fully promulgated all of the rules and regulations as to how this program will be administered and there are many questions left unanswered. BBG will be closely following this program and will be sending out updates on future developments.
If you would like to discuss the particulars of the application and whether you or your tenants might qualify, please contact your attorney at BBG.