The good news is the majority of our tenants will be able to pay their rents in full. However, during this difficult economic time, some of our tenants may lose their jobs and be unable to pay rent. Please be prepared to cover some or all of your mortgage, if possible.
What happens if my tenant can’t pay rent?
Great question! Top Properties will inform you as soon as we have knowledge that your tenants will not be able to pay. In this challenging situation, all governing bodies are urging landlords to offer some grace. Because of the magnitude of the current situation, government enforcement of evictions has been temporarily discontinued to divert resources to the medical pandemic at hand. More on evictions below. If you are informed of a non-payment situation, some recommended negotiation options are below:
If tenants are unable to pay now, but they have a plan for income in the near future, you can offer a payment plan. For instance, one missed monthly payment may be paid over the following three months with their next rent payments. Example: Tenant cannot pay $3,000 rent in April, but has new employment lined up for May. Offering to allow the Tenants to pay April’s payment in 3 parts, which will be due with May, June, and July’s rent payments (each increasing by $1000 until April is paid in full) gives the tenants a chance to rebound and an increased likelihood for us to collect in full.
Accept a partial payment with agreed upon payment plan for the remainder of rent due with a similar payment plan to the example above.
Offer to reduce the rental rate for one month or a pre-determined number of months. Example: 25% off April, May, and June’s rent. This method can be used to encourage them to pay as much as possible for the current month and can be an effective way to obtain the highest payment now and potentially avoid missing a full month’s payment. If this is agreed upon, you will waive your right to collect on this discounted amount in the future.
Offer a discount if they pay the next three months in advance. This is win/win as you will have money now to cover the coming months to decrease uncertainty, AND the tenants may prioritize the money they currently have to pay rent vs. other obligations. We love this option! Example: Offer tenant 25% off if they pay the total due for the next three months by a particular date. If this is agreed upon, you will waive your right to collect on this discounted amount in the future.
Waive the rent entirely. Example: Waive May’s rent. This is done at landlords discretion only. If you are in the position to be able to offer this option, the short term loss may allow tenants to recover and pay future months in full. If this is agreed upon, you will waive your right to collect on this rent in the future. This option is the most extreme and is entirely voluntary.
What are the repercussions to my tenant if they are unable to pay?
What is Top Properties doing to ensure I receive as much rent as possible during this time?
More great questions! At Top Properties we are doing what everything we can to help minimize the effects of this economic crisis on our owners and tenants. Based on the advice of our legal team, NARPM, and the Attorney General, we have decided to waive late fees through April 30th and perhaps longer.
We will continue to post 10-day demand letters for late tenants to allow us to move forward with an eviction if needed.
What about evictions? Will Top Properties be filing evictions, and will the courts be carrying them out?
The mayor, Attorney General, and governor have all stated that this is NOT the time to kick people out of their homes. The governor has issued an order that prohibits evictions from being carried out for 30 days. Many county courts have clarified to say they will not allow the filing of evictions for 30 days. Top Properties will not be filing evictions during April, and will continue to look to our legal team and the governing bodies for guidance in May and beyond. Negotiation outside of the eviction process will be our best practice in coming months. More on successfully negotiating using the link below:
Why should I offer any rent discounts or concessions?
Excellent question. First of all, and probably most importantly, we are all in this together. Our economy is suffering, through no fault of your tenants or yours, and unfortunately, your tenant drew the short stick when it came to unemployment with this virus. Morally, if we can help, we should do all we can. Remember, a good tenant is truly worth their weight in gold.
Second, and probably most practically, evictions are delayed until further notice. If you do not come to an agreement with your tenant, they may be allowed to stay for several months. Yes, the money would be due, but as the saying goes: you can’t get water from a rock. If the tenant remains unemployed for an extended period, you may never see any money from them. If your tenant has expressed a need to defer or reduce rent, negotiation may be your best bet for receiving most of your rental income in the coming months.
What if I want them out, or they want out?
What are our options?
We always have both mutual and conditional termination documents if you would like to offer your tenants a kind way to terminate their lease agreement. Top Properties would reconcile the security deposit, but they can find another residence while we show your property and find a new tenant. We will address these on a case-by-case basis.
So, what’s next?
Top Properties has enacted policies that will allow for written documentation of any tenant requests for rent reduction or deferment due to COVID-19. As we receive these, we will reach out to you to further discuss your options at that time. We have new forms and a Payment Plan Agreement from our lawyers specifically for this pandemic.
We have systemized everything for your convenience.
We’ve got you covered!
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