Read the Executive Order to Protect Renters and Homeowners During COVID-19 Pandemic Here.
Read about tenant rights during the COVID-19 Pandemic Here.
My tennant can't pay rent. What should I do?
1. Communicate with Your Renter:
First, communicate with your renter. Empathize with them and let he or she know how you feel about these unprecedented circumstances.
Explain that all of us are in the same situation you want to ensure you can continue to provide them with a safe, well-maintained home, that’s impossible without receiving the rent you depend on to maintain the building and to support your own family.
2. Offer Deferment of Rent:
Next, when necessary, consider offering a full or partial deferment of rent.
But let your renter know any reduced or deferred rent is not forgiven rent, and that they will have to repay you.
3. Ask to Provide Written Documentation:
Any renter that asks you to reduce or defer rent must provide you with written documentation that they have suffered adverse financial consequences due to the COVID-19 virus resulting in a “substantial” reduction or loss of income for any of the following reasons:
1) Sickness with COVID-19 or caring for a household or family member who is sick with COVID-19.
2) Lay-off, loss of hours, or other income reduction resulting from business closure or other economic or employer impacts of COVID-19.
3) Compliance with a recommendation from a government health authority to stay home, self-quarantine, or avoid congregating with others during the state of emergency.
4) Extraordinary out-of-pocket medical expenses.
5) Childcare needs arising from school closures related to COVID-19.
In addition, in order to temporarily avoid eviction proceedings, your renter is obligated provide specific, verifiable supporting financial, employment and/or medical documentation of loss of income and reflecting their loss of income is directly attributable to COVID-19.
After the expiration of the local emergency, the tenant must repay within the period of time set by local ordinance or government order.
Be sure any rent reduction or agreement made with your renter is documented in writing through a lease amendment.
The law doesn't eliminate a renter’s obligation to pay unpaid rent.
After the expiration of the local emergency, your renter is obligated to repay any deferred rent, and you may seek payment of the unpaid rent.
The AAGLA has created 3 new forms to assist you in dealing with renters that “think” they don't have to pay rent during the COVID local emergency period.
The new forms are:
COVID Notice – Landlord Notifies Tenant of COVID-19 Rights for Non-Payment of Rent:Use this form to let your tenant know their rights in a jurisdiction that has passed an eviction moratorium due to the COVID-19 pandemic.
Provide this form to your tenant if your tenant has indicated he or she might not pay their rent or asks not to pay their rent for reasons other than COVID adverse financial impacts.
COVID Notice – Tenant Notified Landlord of COVID-19 Financial Impact:Use this form if your tenant has informed you they have suffered adverse financial consequences due to COVID-19 and they cannot pay their rent. This form is for jurisdictions that have passed an eviction moratorium due to the COVID-19 pandemic adverse financial impacts.
COVID-Notice – Receipt for Partial Rent Payment: Use this form to document partial payment when rent is lawfully deferred due to COVID.
If non-payment of rent is not related to COVID-19, it is permissible to immediately commence an unlawful detainer.
Furthermore, if your case is not based on non-payment of rent, there is no legal barrier to commence an unlawful detainer.
In many instances, evictions will not be the solution.
A far better approach is to work with your affected renters by offering them a temporary rent reduction until our society turns back to normal.
Most local jurisdictions are allowing affected tenants 6 months to repay deferred or past due rent, once the local emergency declaration is lifted.
However, your renters may not have the deferred/ past due rent even at the end of this period, which will require you to continue working with them.
This is an economic decision you must make based upon your current circumstances.
Many renters will feel empowered to stop paying the rent because they feel like it or have an incorrect understanding of the law.
While there will be people who try and take advantage of the situation, we need to be careful how we respond to insure those who are impacted get relief per the Governor’s Executive Order and in compliance with local ordinances and decrees.
The last thing the multifamily housing industry needs is an article saying “greedy” landlords are denying relief to those affected with COVID.
Please use your best judgment and be diligent how you manage the issue the best you can.