Over 40 million people in the United States have lost their jobs as a result of the pandemic. While no accurate figures exist for how many of these people are renters, we do know that roughly 50 million people in the United States rent their properties.
Many individuals who have lost their jobs are not eligible for unemployment benefits. Or, if they are, receive significantly less than they did while they were employed. Millions of tenants have been unable to pay their rent due to a lack of revenue.
Landlords are now in a precarious situation as a result of this. But, in this situation, what should a landlord do? While they may be tempted to initiate the eviction procedure right away, there are a few additional options for collecting the outstanding rent.
1. Formulate a Payment Strategy
Communication with the tenant is one of the most crucial things a can do. If a tenant is unable to pay their rent, speak with them to discover more about their predicament. Work out a payment plan with the tenants if it is possible.
Also, allow them to pay a portion of the rent or spread it out over a few weeks rather than paying it all at once at the start of the month. Make sure that whatever arrangement a landlord makes with their tenants is reasonable and in agreement. One should include all of the specifics, including dates and amounts, in a contract that both parties should sign.
2. Consult the Mortgage Lender
Borrowers will benefit from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which waives late fees on mortgage payments and prevents foreclosures. If the renters are unable to pay their rent, and as a result, a landlord is unable to pay their mortgage, they should contact their lender to see what options are open to them. A reputable rental property management company can assist landlords with these things.
3. Contact the Insurance Provider
No one wants their insurance to lapse, but they can contact them to see if they have any programs for landlords who are having trouble collecting rent due to COVID layoffs. Some insurers are waiving late fees, enabling customers to pay over time, and refusing to cancel policies due to nonpayment.
Because many of these programs aren't automatic, one will need to contact their insurance carrier and request assistance.
4. Take a Look at State Property Taxes
Summer and winter property taxes are common in most states. If a person can't pay their taxes, check with the city, state, or county to see if any special allowances have been made due to COVID. Some municipalities allow residents to pay their taxes in installments, waiving late fees and deferring payments for a few months.
5. If Nothing Works, Pursue Eviction
The failure to pay rent is a blatant breach of the tenant's lease agreement. If the tenant refuses to pay the rent after many attempts to contact and work with them, a landlord may have no alternative but to proceed with an eviction. But first, double-check that the state doesn't have an eviction moratorium in place. One won't be able to file for eviction if this is the case.
Conclusion
In conclusion, landlords rely on their tenants to pay rent so that they can pay their bills. However, they have little control over the COVID-19 pandemic's extraordinary furloughs and unemployment. It's in their best interests to try to work with them to maintain them as long as possible.
