Pandemic Rental Assistance?

20 Replies

My future tenant signed their lease and paid their security deposit then informed me that I would be receiving the rent from their current landlord because they'd previously qualified for pandemic rental assistance last year. Basically, their rent is paid for the next few months but the tenant does not have the money. The program sends payment directly to the landlord. This was all news to me. I did the background check and also called and spoke to the current landlord beforehand and it had not come up during the screening process. I informed the tenant that they'll get the keys to move in when I receive the rent due by the 1st. My question is does anyone have any knowledge of these assistance payments? The tenant will be sending me the info and the landlord will be getting in touch with me to transfer the funds. Anyone heard of this? I'm trying to figure out how the transfer of funds from this third party to me would work.

@ Carl W. - Several of my tenants received rental assistance and some with future rent included. The transfer of funds between you and the current landlord may occur in several ways, but I think having a paper trail would be paramount. If possible, I would get a cashier's check from the current owner for the funds, AND, as well as any documentation of the funds that were distributed to him/her. My understanding is that each landlord likely received an "award letter/notice" along with the funds - If I were you I'd make sure that I get a copy. Additionally, it would be good to know that the tenant is up to date with his rent on his current landlord - so he/she can not come after you in the future for funding. (that is currently being transferred to you). 

Originally posted by @Carl W. :

My future tenant signed their lease and paid their security deposit then informed me that I would be receiving the rent from their current landlord because they'd previously qualified for pandemic rental assistance last year. Basically, their rent is paid for the next few months but the tenant does not have the money. The program sends payment directly to the landlord. This was all news to me. I did the background check and also called and spoke to the current landlord beforehand and it had not come up during the screening process. I informed the tenant that they'll get the keys to move in when I receive the rent due by the 1st. My question is does anyone have any knowledge of these assistance payments? The tenant will be sending me the info and the landlord will be getting in touch with me to transfer the funds. Anyone heard of this? I'm trying to figure out how the transfer of funds from this third party to me would work.

I recommend you cancel this tenant immediately! When the tenant applies for rent, the payments go to their Landlord. That means the money goes to the Landlord they rented from at the time of application. The tenant and Landlord agree the money is to keep the tenant in that specific rental. 

I'm not aware of anything in the program that allows them to apply at one address, then take the money and spend it on a different address. If you want to even consider it, you need to contact the rental assistance program office and confirm this would be allowed. I doubt they allow it. You're taking the risk that the Tenant is telling the truth about their approval, that the former Landlord would send the money to you, and that it's all legal. 

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@Carl W.  Completely agree with @Nathan G. on this. I am not an attorney but this applicant (tenant) applied for your property under false pretenses. Hopefully you have something on your application or lease stating it can be cancelled within x days if any of the information is found to be false. If nothing else, it was a lie by omission on his part as well as his previous landlord. You were not given all of the facts or information, therefore, the application is not valid. 

Originally posted by @Nathan G. :
Originally posted by @Carl W.:

My future tenant signed their lease and paid their security deposit then informed me that I would be receiving the rent from their current landlord because they'd previously qualified for pandemic rental assistance last year. Basically, their rent is paid for the next few months but the tenant does not have the money. The program sends payment directly to the landlord. This was all news to me. I did the background check and also called and spoke to the current landlord beforehand and it had not come up during the screening process. I informed the tenant that they'll get the keys to move in when I receive the rent due by the 1st. My question is does anyone have any knowledge of these assistance payments? The tenant will be sending me the info and the landlord will be getting in touch with me to transfer the funds. Anyone heard of this? I'm trying to figure out how the transfer of funds from this third party to me would work.

I recommend you cancel this tenant immediately! When the tenant applies for rent, the payments go to their Landlord. That means the money goes to the Landlord they rented from at the time of application. The tenant and Landlord agree the money is to keep the tenant in that specific rental. 

I'm not aware of anything in the program that allows them to apply at one address, then take the money and spend it on a different address. If you want to even consider it, you need to contact the rental assistance program office and confirm this would be allowed. I doubt they allow it. You're taking the risk that the Tenant is telling the truth about their approval, that the former Landlord would send the money to you, and that it's all legal.  

I would've refused to move ahead with the signing of the lease but the tenant has shown proof that they can make payments without this rental assistance. If I never receive these funds isn't my concern. All I care about is that they have the means to pay current rent and continue to pay. The tenant is willing to pay the rent out of their personal funds but stated these funds are due to them for rental assistance. This is their issue, not mine. I'm just asking if folks have heard of this before.

The ability for the tenant to pay after "future rent" stops (generally a few few months) should be a red flag to you.  I would really make sure they are able to pay.  

Originally posted by @Carl W. :

I doubt many have heard of this because it's fraudulent. You're willing to rent to a tenant that is either very ignorant or they are willing to break the law to get what they want, both of which are red flags.

I would not rent to them, even if they could afford the place twice over.

Originally posted by @Scott M. :

The ability for the tenant to pay after "future rent" stops (generally a few few months) should be a red flag to you.  I would really make sure they are able to pay.  

That's what I'm trying to say. I checked them out and they can pay. It wasn't a red flag or else I wouldn't have approved them.

Originally posted by @Nathan G. :
Originally posted by @Carl W.:

I doubt many have heard of this because it's fraudulent. You're willing to rent to a tenant that is either very ignorant or they are willing to break the law to get what they want, both of which are red flags.

I would not rent to them, even if they could afford the place twice over.

I really respect your contribution to this forum so I'd never write off what you say on here. I just want to understand which part is fraudulent. I can easily refuse to accept the rental assistance payment if it is indeed illegal but I have no proof of that being the case at this time. They are willing to pay out of their own pocket and removing this whole thing from the equation. I've made it clear to the tenant that I expect all documentation and proof that everything is legit. Also, why would the landlord agree with the tenant to transfer the assistance payment if they knew doing so was illegal/fraudulent, especially when they can just pocket it and tell the tenant to screw off.

I worked very hard to get to this point. I want to make sure I'm not dropping a qualified tenant over something minor.

This comes down to the rules of the program that is paying for rent.  To say with such clarity that the tenant is committing fraud is a bit overstated in my opinion.  I don't see where you listed the state or the program that made the payments and therefore we can only guess/speak in broad terms.  

We had this come up with a covid relief fund that a tenant was approved for and it included 3 months of future rent and the tenant moved out.  As this program tied the funds to the tenant and not the house (even though they paid the landlord (us)) it was 100% proper for the tenant to decide to move and ask us to forward the unused part of the future rent to the landlord where the tenant moved.  

Hi Carl, I worked for a local nonprofit for 8 months in Central Oregon. I specifically worked in the office helping distribute rental assistance to tenants struggling to pay rent due to the pandemic. The most straight line way this process works is the assistance is paid directly to the landlord via checks. This can mean the current landlord or future landlord (and sometimes both for one applicant). 

There are many cases where the tenant is moving out of their current place in which that landlord had already received a lump sum of money for future months through the assistance program. The tenant’s current landlord is not allowed to keep the future money, hence it goes with the tenant to the new residence. Once my program paid out assistance and it reached the appropriate landlord, our fiscal team did not want to receive any checks back. New circumstances that arise are now in the hands of tenant/ landlord(s). My program did not have any hard or fast rules once the money left our office (which wouldn’t happen if the application seemed fraudulent).  In the situation you have presented, their current landlord could write the tenants a check with their leftover assistance amount, or give it to you directly. I don’t think what the tenants have told you is fraudulent. You could contact the assistance program office to see if this transfer is the best/ easiest way. 

Originally posted by @Scott M. :

This comes down to the rules of the program that is paying for rent.  To say with such clarity that the tenant is committing fraud is a bit overstated in my opinion.  I don't see where you listed the state or the program that made the payments and therefore we can only guess/speak in broad terms.  

We had this come up with a covid relief fund that a tenant was approved for and it included 3 months of future rent and the tenant moved out.  As this program tied the funds to the tenant and not the house (even though they paid the landlord (us)) it was 100% proper for the tenant to decide to move and ask us to forward the unused part of the future rent to the landlord where the tenant moved.  

You are correct here.  

@Carl W. No disrespect intended with this comment but If this was all above board, then why did he wait until after the signatures were dry before he told you about it? Your radar must be going off a little bit or you would not be here asking questions. I hope your tenant is legit and it all works out but I would be concerned.  

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Originally posted by @Tristyn Combs :

Hi Carl, I worked for a local nonprofit for 8 months in Central Oregon. I specifically worked in the office helping distribute rental assistance to tenants struggling to pay rent due to the pandemic. The most straight line way this process works is the assistance is paid directly to the landlord via checks. This can mean the current landlord or future landlord (and sometimes both for one applicant). 

There are many cases where the tenant is moving out of their current place in which that landlord had already received a lump sum of money for future months through the assistance program. The tenant’s current landlord is not allowed to keep the future money, hence it goes with the tenant to the new residence. Once my program paid out assistance and it reached the appropriate landlord, our fiscal team did not want to receive any checks back. New circumstances that arise are now in the hands of tenant/ landlord(s). My program did not have any hard or fast rules once the money left our office (which wouldn’t happen if the application seemed fraudulent).  In the situation you have presented, their current landlord could write the tenants a check with their leftover assistance amount, or give it to you directly. I don’t think what the tenants have told you is fraudulent. You could contact the assistance program office to see if this transfer is the best/ easiest way. 

 Thank you so much for this response! I don't believe the tenant is being fraudulent here either. The current landlord has not received the future money yet, it is expected shortly. The tenant informed me that the landlord would be giving those funds to me. I just really wanted someone familiar with this program to shed more light on it for me. Thanks again. 

Originally posted by @Julie Hartman :

@Carl W. No disrespect intended with this comment but If this was all above board, then why did he wait until after the signatures were dry before he told you about it? Your radar must be going off a little bit or you would not be here asking questions. I hope your tenant is legit and it all works out but I would be concerned. 

Let me clarify that they did not wait until after the lease was signed. They explained everything at the meeting and I informed the tenant I would need documentation on everything and with that, I decided I wanted to move forward because I believed them. 

Your applicant filed for rental assistance at their current address and their request was approved for the current address. I don't believe they are allowed to just move the money to any property they please and doing so would qualify as fraud (wrongful or criminal deception intended to result in financial or personal gain). What if someone applied for rental assistance in New York City and get approved for $9,000 in assistance ($3,000 a month x 3 months) and then they transfer that money to a $1,000 apartment in Syracuse? 

You asked for advice but don't seem to like the answer, so I'll give you the best advice you could possibly receive: stop asking strangers on the internet for advice. Call your state ERAP office and get it straight from the horse's mouth.

Originally posted by @Scott M. :

This comes down to the rules of the program that is paying for rent.  To say with such clarity that the tenant is committing fraud is a bit overstated in my opinion.  I don't see where you listed the state or the program that made the payments and therefore we can only guess/speak in broad terms.  

We had this come up with a covid relief fund that a tenant was approved for and it included 3 months of future rent and the tenant moved out.  As this program tied the funds to the tenant and not the house (even though they paid the landlord (us)) it was 100% proper for the tenant to decide to move and ask us to forward the unused part of the future rent to the landlord where the tenant moved.  

OK, thank you. I'm glad to hear things worked out for you and the tenant.

Originally posted by @Nathan G. :

Your applicant filed for rental assistance at their current address and their request was approved for the current address. I don't believe they are allowed to just move the money to any property they please and doing so would qualify as fraud (wrongful or criminal deception intended to result in financial or personal gain). What if someone applied for rental assistance in New York City and get approved for $9,000 in assistance ($3,000 a month x 3 months) and then they transfer that money to a $1,000 apartment in Syracuse? 

You asked for advice but don't seem to like the answer, so I'll give you the best advice you could possibly receive: stop asking strangers on the internet for advice. Call your state ERAP office and get it straight from the horse's mouth.

I'm sorry that's the impression I gave you. I've always thanked you for your responses and will continue to utilize this forum.

"I checked them out and they can pay. It wasn't a red flag or else I wouldn't have approved them."
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You need to take control of this tenant immediately. The tenant is trying to get you used to the idea that the tenant controls the source of your funds. No. The tenant himself IS the source of your funds. The tenant pays you in the first instance, on the first of the month. If the tenant can get reimbursed by the prior landlord, your response is "So what and who cares."

Plain, pure, and simple: Never make the tenant's problems your problems. Let the tenant know in no uncertain terms that you are not waiting for funds from the prior landlord (as others have pointed out, it may not be kosher for you to accept funds from the other landlord, and you don't need hassles with the government). Where the tenant gets his money or reimbursement is up to the tenant. You don't care and you aren't waiting for anyone.

If the tenant balks, pull the plug and don't look back.

Most (if not all) programs require the landlord to return unused funds to the state. If the tenant moves out, they don't just have a blank check to use where-ever they go. They move out, the funds are no longer due to the original landlord, so the funds need to be returned to the state program. Same would be if the tenant caught up on rent before the program check came through - they wouldn't be able to apply those funds to a future balance, the landlord would have to return them to the state.

Concerning here is that the tenant received assistance. So either they were behind on rent with the ability to pay and no desire to do so, on a hope and prayer that they'll get approved for assistance and the landlord left out dry until those funds come through. Or, they conspired with the previous landlord and lied on their assistance application. Either way not someone I would want to rent to.