Americans have been struggle during the COVID-19 pandemic and have accumulated over $21 billion country-wide in past-due rent, a crisis in itself.
Since March, unemployment began to grow to levels unseen since after the Great Depression in the 1930s. However, state and local eviction bans kept Americans housed. These bans are now being lifted at the same time as the $600/week unemployment benefits have evaporated with no solution in sight. Rent that has now been deferred for over four months is now due and those still unemployed will struggle to make ends meet, let alone be able to catch up over-due rent.
Landlords dealing with tenants unable to pay their rent have been frustrated since this pandemic began. The discontinuation of these bans have landlords seeing one answer for their unpaying tenants – eviction. While eviction appears to be an appealing solution for landlords, it may not be the best resolution for all situations.
Not only would all of these evictions result in millions of Americans homeless, it would also likely cause additional headaches for landlords. How will landlords recoup all of the money lost? Will landlords be able to find viable tenants right away, or will their property remain vacant? If selling is required, how long will that take? Yes, if you have a “problem” tenant to begin with who as simply decided to not pay their rent, need to now move into your investment property due to the pandemic, or simply need to sell, eviction will likely be the answer.
However, If you had a lovely tenant prior to the pandemic, it may be viable to create a payment arrangement with them. For payment arrangements to be possible, you will have to ensure that this option will work for you financially. With the current situation being what it is and funding winding down, you may have to be patient with this option.
Create a payment arrangement that your tenant will be able to keep. Do not create an unrealistic arrangement – this will only lead to further issues for the both of you.
Keep Track of everything. Keep track of all payments made and any additional deferments if needed. If the arrangement is broken and further action is needed, this will be important.
Be honest. If payment is needed to keep you, the landlord afloat, be open and honest with your tenant. Some tenants may believe that their landlord isn’t in dire need of rent money and not prioritize it as they should. A simple conversation outlining that you as a landlord are struggling too may be just what a tenant needs to step up and pay.
It may be hard to know where to start when creating a payment arrangement with your tenant. We are always here to help. Our My Legal Valet, Rent Re-payment Plan template can be accessed free of charge, by clicking here. Simply request access by inputting your email address. Access will be granted within hours. If further help is required, please contact us.