There are many people who have indicated that tenants might not be able to pay their rent during the COVID-19 (coronavirus) pandemic; however, if landlords do not collect rent, they might not be able to pay their mortgages. With this in mind, there are a few tips that landlords should follow when it comes to collecting rent during COVID-19.
Pay Attention to Local Regulations
One of the most important tips that all landlords need to follow during COVID-19 is to look at the local regulations. Each local government has its own rules and regulations when it comes to evictions. Therefore, it is important to check both state and local websites to see what is allowed when it comes to ordering an eviction. This information should be readily accessible; however, keep in mind that it could be difficult to find a new renter if there is a shelter in place order. An eviction might not help the landlord collect rent money.
Communicate with Tenants Clearly
In a lot of areas, the tenants are required to give their landlords some kind of notice if COVID-19 is going to prevent them from being able to pay their rent. The exact amount of notice required will vary from place to place, so this is another reason why it is important to check with the local government.
Regardless of the reason why tenants might not be able to pay rent, it is important to communicate with them clearly. Make sure they are okay and if they need help paying rent, think about setting up a payment plan to help them. This show of good faith will go a long way and it could help get a lease renewed in the future.
If a tenant says that he or she is not going to be able to pay his or her rent due to COVID-19, it is okay to ask for verification. For example, if a tenant got laid off, then this is someone who might be able to defer payments until he or she finds a new job; however, if a tenant lost his or her job and is still making $10,000 per month on the side, then that tenant can probably pay his or her rent.
Therefore, ask for verification and make sure the stories match. Be willing to help tenants who need it; however, don’t get taken advantage of by people who simply want to use COVID-19 as an excuse not to pay rent for a few months. Keep in mind that it is not permitted for landlords to require documentation; however, asking for it nicely can still go a long way.
Partial Payments Are Better Than Nothing
If a tenant states that he or she is not able to pay his or her rent, be flexible. Ask tenants what they can afford to pay. Remember that it will be hard to find a new tenant during COVID-19, so partial payments are better than nothing. Be willing to work with tenants and help them set up a payment plan. Just draw up a document (in writing) that states that partial payments are not going to satisfy their full rental agreement. Once they find new jobs, arrange for tenants to pay the amount they owe over several months. This show of kindness will mean a lot.
Contact Your Lender
While many landlords are focused on their tenants, it is important to look in the other direction as well. If there is still a mortgage on the property, reach out to the lender and see what kind of assistance they can provide. They might be willing to defer mortgage payments for a few months. This can prevent landlords from defaulting if they aren’t able to collect rent right now. Also, if this is the chosen route, show up prepared. Give the lender a breakdown of all monthly expenses. Let them know how much rent has been lost. Come up with a number that is affordable. This will keep the lender satisfied during the pandemic.
Ask for Help
These are a few of the most important tips that landlords should follow during the COVID-19 pandemic to make sure they are still able to collect as much rent as possible. Take reasonable steps to keep tenants in the building because partial payments are still better than nothing. Once the pandemic subsides, there are measures that can be taken to recoup lost rent payments.