COVID-19 ISSUES As a Landlord, What Should I Do if My Tenants Are Not Paying Rent?
Like many landlords across California, you may have tenants who are struggling to pay rent amidst the COVID-19 shutdown, with its associated layoffs, furloughs, and reduced hours. But the California Judicial Council effectively halted all evictions until 90 days after the Governor lifts the “state of emergency” related to COVID-19. Moreover, the rental market is unsure in terms of finding a stronger, more qualified tenant at the same rent price. As a landlord with your own mortgage and expenses, you may be wondering what your options are during this difficult time.
Know that foreclosures are halted too.
The first thing to know is that foreclosures have effectively been “paused” also. In March, JP Morgan Chase, Citi, US Bank, Wells Fargo and a number of other credit unions and banks committed to a temporary forbearance on mortgage payments for homeowners who can provide evidence that they’ve been impacted by COVID-19. In early April, the California Judicial Council unanimously voted to “stay” or postpone foreclosures in most circumstances.
Contact your lender.
If you are unable to make your mortgage payments due to tenants not paying their rent, reach out to your financial institution and see what kind of programs they are offering for COVID-19 losses.
Negotiate with your tenants.
Because of uncertainty in the market and unemployment increasing drastically across the state, it may be in your best interest to keep your tenant in place, even at a reduced rent. If so, try to work out a temporary rent reduction, or a rent deferment plan, providing your tenant with an option of paying partial rent now, and spreading the back-pay out over a series of months after that. Another possibility is to offer your tenants a lease extension without an increase in rent if they continue paying the agreed-upon amount.
Remember to act with compassion.
Remember that this COVID-19 pandemic has caused great distress for most people in one way or another. Approaching the situation with fairness and compassion will generate a better response and serve you best in coming to a reasonable solution. This will also lead to happier, more stable tenants, which will help your long-term investment.
Know that the Law Offices of Christine Miller are here for you through this difficult time. For individualized legal advice or assistance with any of the above, don’t hesitate to call us for a free consultation.
This article contains general legal information and should not be construed to form an attorney-client relationship or contain specific legal advice. For advice specific to your circumstances, please contact a legal professional.