Gov. Northam proposes 60-day grace period extension on evictions and foreclosures for Virginians not covered by the CARES Act, while amendment goes to vote on April 22.

On April 11, Governor Ralph Northam proposed amendments to House Bill No. 340 that grants Americans behind on rent or mortgage payments an additional 30 days (now totaling 60 days) before eviction or foreclosure. The federal relief package (CARES Act) currently creates provisions of up to 30 days, but those provisions only apply to tenants with federally-affiliated housing or federally-backed mortgage loans.

The amendment to the bill (originally proposed by Virginia Delegate Jeff Bourne) is subject to a vote on April 22 when sessions resume. To take advantage of the new proposal (if passed), renters/homeowners will need to show written proof that their income has been impacted to a judge (in the case of renters) or the bank (in the case of homeowners). The new ruling, if passed, would go in to effect once courts are back in session. If enacted, this bill would also enact said protections immediately rather than on July 1, the date the CARES Act is scheduled to go into effect.

“The goal is to try to keep Virginians in their homes,” says Virginia Delegate Jeff Bourne (D-Richmond), the original sponsor of the bill Northam now aims to amend. Bourne urges renters or homeowners behind on their payments to first contact their landlords or bank and seek to work out payment arrangements. A vast swath of companies, banks, and businesses, in light of COVID-19 and its subsequent economic recession, are willing to work with their clients, customers, and debtors given the extent of the current crisis (and a desire to keep their business long-term).

While the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) passed by Congress enact a moratorium on evictions and late fees, these provisions don't apply to all renters. Only renters dwelling in properties with federal assistance programs or those with federally-backed mortgages are protected by these provisions. This only constitutes an estimated 28 percent of renters and homeowners in the state. According to unemployment data, legislators estimate that some Americans outside this percentage could also be facing significant economic and medical hardship.

This extension to a greater population of applications is what makes this amendment significant. Again, while the CARES Act provides a 30-day period of rent forgiveness required before eviction or foreclosure—which would only apply to those not just in the aforementioned covered 28 percent—Northam's proposed amendment would extend this allowance to any citizens of the Commonwealth whose work situation is impacted by COVID-19 (and who can provide documentation thereof) for an additional period.

What does this mean?

Under the federal aid package you've heard so much about (stimulus checks, small business loans, etc.—the 335-page bill formally known as the CARES Act), if you are in a household (renting or mortgaged) by or with federally-backed programs, your bank or landlord can't evict you or declare foreclosure for 30 days (which begins after the court system re-opens). This 14-day span enacts upon declaration of a federal emergency, which we are currently under (for obvious reasons), but all legal activities will resume once court systems reopen.

The Supreme Court of Virginia has formally suspended operations until June (as of now), but after this point, your landlord or bank can legally tell you to pay up, or get out.

“If you haven’t paid your rent, you’re going to have to go to court in June,” Christie Marra, director of housing advocacy for the Virginia Poverty Law Center, told the Virginia Mercury. “And without this legislation, the court can just say, ‘Ok, here you go Mr. Landlord,’ and you’re out on the street in 10 days.”

If the proposal is passed and a renter or homeowner is in a situation of hardship falling under protection of these provisions, the renter or homeowner needs to provide written proof (to either the landlord of the bank), which according to the text of the bill is defined as:

  • A paystub issued by a federal government agency showing zero dollars in earnings for a pay period within the period of any closure of the United States government
  • A copy of a furlough notification letter or essential employee status letter indicating the employee's status as nonessential
  • Or a letter from a company under contract with the United States government issued and signed by an officer or owner of the company or by the company's human resources director stating that the employee's not receiving payment from the contractor is directly attributable to a closure of the United States government...

The goal of the bill is to keep the economy functioning and to protect Virginians from eviction or foreclosure.

As legislators struggle to cope with both the public health emergency and an economic crisis, in the words of Delegate Cia Price, D-Newport News, "This is just to help buy time."

Has your living situation been impacted by COVID-19? You're not alone. Don't be afraid to reach out to your landlord or bank, or reach out to your elected official and let them know your thoughts on this bill.