With the worldwide pandemic set to extend to a new month, both renters and property owners will face new challenges on April 1 – the day when most rents are due. Leasing offices and management companies across the country are bracing for a significant increase in the inability of residents to pay their rent. Like so much else with the Coronavirus, we are making decisions in real time, following ever changing daily orders/decisions from federal, state, and local governments. Here is some of what I am hearing:
*Many local courts across the country are closed. Eviction actions are not considered emergencies.
*An ever increasing number of jurisdictions (states, cities, and counties) have either paused evictions, halted evictions, or while permitting new cases to be filed, not permitting them to move forward. The list of jurisdictions stopping evictions increases literally each day. I recommend checking with a lawyer like me if you have questions about how the laws are changing in your jurisdiction(s).
*While landlords and property owners obviously have compassion for anyone impacted by the COVID-19 virus, apartment owners still are required to meet their mortgage and/or other financial obligations as well.
*That being written, HUD has suspended evictions and foreclosures through April 2020. This federal moratorium, at least as of today, will apply only to homeowners with mortgages insured by the Federal Housing Administration, a HUD agency that backs home loans issued through private firms.
*Many conventional property owners are working with their banks on forbearance agreements if needed because of an expected increase in lease defaults.
*Apartment management employees remain on the front lines doing our best to stay safe in the workplace while meeting the needs of our residents. Our services are particularly acute in those properties with senior citizens or disabled residents. Look, we are not medical professionals (and every health care worker deserves all the appreciation we as a nation can muster right now), but our team members are coming to work to ensure our residents get the maintenance and related services we provide.
There is no easy box here. The number of Americans filing for unemployment during the last two weeks in March has spiked to an unprecedented level. It is anticipated the number of workers facing layoffs or furloughs will continue to increase, at least in the short term.
If I had to guess, I suspect there will be further Congressional action with an eye toward assisting both renters and property owners if indeed the pandemic and “shelter in place” orders get extended for weeks and months to come.
In the interim, my advice is to communicate with your residents. Find out who can pay. Learn who is facing a job loss or if someone requires medical attention. Determine if you want to accept partial payments (something we typically do not do). Think about informal forbearance agreements. Not waiving rent, just delaying amounts due. If this is just a pause for a few weeks, perhaps we can get back on track before the summer.
Just A Thought.