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Gov. Gretchen Whitmer’s ban on evictions throughout the state of Michigan expires Wednesday following a nearly four-month moratorium preventing landlords from kicking out non-paying renters during the coronavirus pandemic.

The expiration of the order will be replaced Thursday by an Eviction Diversion Program, a plan that will direct $50 million in rental aid to landlords. 

The money — federal CARES Act funding allocated by the Legislature — will pay up to 90% of rental debt to landlords on the condition those property owners allow tenants to stay in their homes, forgive late fees and excuse up to 10% of back rent. 

The relief applies only to back rent accumulated during the pandemic for renters who earn up to 100% of the area median income, or AMI. That number differs by region and family size. Roughly half of the funding will go toward renters who earn less than 50% of AMI, Whitmer’s June 26 order said.

Tenants with debt not covered by the conversion program can pay it back over 12 months.

Activists are encouraging tenants to organize as groups to negotiate with landlords out of concern there will be a rush of evictions after the moratorium lifts. A decision not to extend the ban on evictions would be a "huge mistake," said Joe McGuire, a lawyer and organizer for Detroit Eviction Defense. 

"The pandemic obviously is not over, the emergency is not over, so why should the eviction moratorium be over?” McGuire said.

The infrastructure to assist delinquent tenants will be hard-pressed to keep up with demand, said McGuire, and it remains to be seen how courts will handle hearings over the proceedings. 

Not only will the courts be busy with new claims, he said, but it's also unclear whether there will be allowances for hearings in person, instead of online, where low-income or elderly tenants are concerned. 

"Lots of other states have eviction moratoriums that are continuing and end dates that are much further away than Michigan’s," McGuire said. "There’s no reason why Michigan, which is one of the states that was really hardest hit by the virus, should allow our eviction moratorium to end.”

But landord-tenant lawyer Matthew Paletz said it's too soon to say how many evictions would be triggered by the end of the moratorium.

"I don’t see a massive avalanche of suits," said Paletz, CEO of Troy-based Paletz Law, which specializes in representing property owners and landlords in Michigan and Ohio. "There are no winners here. There’s no one-size fits all," when it comes to addressing late rent, he said.

Landlords and tenants have been adjudicating disagreements among themselves, making payments with stimulus money and, where that's not possible, the courts will finally be able to intervene, Paletz said. 

"The courts should be allowed to be open to mediate these disputes," he said. "That’s what the courts are there for. They should be allowed to do their job.”

Paletz hopes the rental aid will be helpful to Michigan landlords but fears bureaucratic red tape may slow the distribution process.

"My concern is that the money that comes in isn’t going to be enough and is it going to be distributed in time to help my clients meet their responsibilities?" he said. 

eleblanc@detroitnews.com

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