Our selfless public servants in the Ohio House of Representatives have proposed a bill to ease our pain as real estate borrowers and tenants during the Covid-19 crisis. The bill is captioned:
A Bill to prohibit foreclosure activity and the eviction of residential and commercial tenants during the state of emergency declared regarding Covid-19, to refer such proceedings caused by the state of emergency to mediation, and to declare an emergency.
The bill does several things. First, it suspends eviction and foreclosure proceedings, including filings, writs, sheriff’s sales, and set outs, for the duration of the emergency. To balance out the suspension of these proceedings it tolls the statute of limitations, and extends any deadlines for filings, execution of writs, scheduling of sales etc. Basically this just treats the period of the emergency as a time out. You cannot take any action to protect your rights, but the time of the time out doesn’t count against you.
Second, and more disturbingly, once the emergency is over and for sixty days afterwards, any evictions or foreclosures filed will not be heard as court cases. Instead they will be referred to mediation, which will be paid for by the court, and that mediation will conclude at the discretion of the court. What does that mean? Well it means you won’t be able to get your property back from your non-paying tenant, or your tenant who is cooking over an open fire in the living room, or who is dealing drugs out of his apartment in the timely fashion you are used to.
Mediation is not going to be a matter of standing up and testifying that your tenant is behind on their rent, that you served a notice to leave on their door, have not accepted any rent and want them out. It will be sitting down face to face with your tenant listening to their sob story for an hour and then having a mediator propose ‘compromises’; since all you want is either your unit back or the money you are owed I am not sure what there is to compromise on, possibly they could give you back the basement and keep the kitchen?
And what does mediation shall conclude at the discretion of the court mean? Does it mean that the individual mediation will continue until the court decides you have listened enough and compromised enough? Or does it mean that the substitution of mediation for actual rights to a hearing can continue until the judges and magistrates decide they want to hold court again? I suspect the former, but the bill is unclear.
But all of this pain as a landlord is balanced out by the ‘relief you get as a mortgage borrower. After a frustrating hour spent listening to why your tenant can’t pay, or shouldn’t owe their rent you get to spend an hour frustrating your lender as you explain why you cannot pay, and shouldn’t owe your mortgage payment!
There is one significant difference between the suspension of foreclosures and the suspension of evictions. Under the terms of this bill, if you file an eviction action before the bill goes into effect, or during the emergency (which you can’t according to the bill itself, but consistency is not generally a characteristic of laws these days), once the courts finally get around to hearing your case, probably sometime next fall, you are not allowed to sue your tenants for the rent for any period during the emergency. There is no matching provision in the foreclosure ban. Your lender is still entitled to the money. You are not. Why? Who has more clout with legislators?
Ok, that is what the bill says, but what are your tenants going to hear? Free housing! After all, if you can’t kick them out during the emergency, and have to have mediation after the emergency, and can’t sue them for the unpaid rent, that sounds a lot like free housing.
Now the bill does not prevent you from evicting them for non-payment once this all wraps up. It does impose the mediation, and it does forbid you to evict until the emergency is over, and it does say you can’t get a judgment for the unpaid rent, but it does not say you have to let them stay despite not paying, and you will eventually be able to take the property back if they do not. But will you do so? Or will you chalk up the loss (which you can’t recover anyway) and keep renting to the tenants assuming they start paying again after the emergency?