April is right around the corner. Most renters should be able to pay rent as usual. Those affected by the virus, loss of work, etc., may need you to temporarily work with them. If you haven’t studied how to do rent deferment programs, go to https://www.uaahq.org/need2know.html
The key to a rent deferment program is a SIGNED LEASE ADDENDUM, committing to pay rent later. Remember, every American adult will be getting $1,200 from the federal government mid-April, plus $500 for each child. Also, unemployed Americans will received enhanced unemployment benefits that equal almost $24 an hour. Renters that prioritize rent should have the means to pay it.
If someone asks for a rent deferral program and qualifies, we encourage you to at least do a short 3 week deferral until the government stimulus money comes.
Q: How can we encourage tenants to prioritize rent?
A: One of the most critical things for everyone involved with COVID-19 is communication. The first step in encouraging tenants to pay rent is to communicate with them about their needs and how they may have been affected by COVID-19. The second step is to inform the tenant about why paying rent is important for both of you. The third step involves being sympathetic towards the tenant. In any difficult situation, humans often want to vent and get things off their chest. Understand that most of the time the tenant is simply expressing their frustration and not personally attaching you. Lastly, direct the tenant to resources that can potentially assist them with rent (like the states website www.coronavirus.utah.gov. Lastly, where possible, we recommend that you do work with tenants on April’s rent. Create an interactive process where you and the tenant can find a win/win scenario.
Q:If someone does not reach out to you, should you go ahead with a 3 day notice?
A: Probably not. Communication is key. Under the circumstances, and the microscope the media had on us right now, we encourage you to attempt to contact before you serve legal notices in April. Here is a sample letter you can email or post, explaining options but highlighting the important e of paying rent.
Evictions and Eviction Moratoriums
We think you should avoid the E word right now. Local media, renters advocates, and some in government would love to see an eviction crisis so they could use that crisis to implement eviction moratoriums (which would be mush harder on renters in the long term but would be a disaster for owners and managers in the short term).
Except in cases of criminal activity or serious nuisance, do your best to work with the tenant for now. The courts are probably not going to be running smoothly, and judges and media will be scrutinizing every eviction trying to portray owners and managers as heartless.
We know you have expenses. If non-payment of rent becomes an issue for you, seek mortgage forbearance from your lender, use saving and reserves, and look to the SB small business loans the government is making available for businesses affected by Covid-19. Evictions should be a last resort.
If you do need to do an eviction, use one of the attorneys who understands PR and the big picture and follow their counsel. The last thing we need is for advocates to get ammunition for a state eviction moratorium from examples of trigger-happy owners and managers filing lots of non-payment evictions right now.
To see the UAA statement on eviction moratoriums go here: https://www.uaahq.org/need2know.html
Q: Who can and can’t do evictions right now?
A: Again, except in rare cases avoid evictions for now. That said, there is no Utah eviction moratorium. Most owners and managers can still do an eviction. The only eviction moratoriums are federal.
1 – HUD owned/managed properties cannot do evictions. This is 7 million units nationally, about 5,000 units in Utah.
2 – Apartment communities whose loans are “Enterprise-backed” (Fannie Mae or Freddie Mac guaranteed) will be allowed to have 90 days mortgage forbearance (meaning you can put off paying for three months and the loan will just be expended three months). However, the stimulus act the President just signed also prohibits those building from doing evictions for 120 days. Make sure you know if your property has one of these loans (43% of multifamily do). If you have rental building four units or smaller, most do not have such loans, but if you have an FHA backed loan, make your attorney aware of it if you do need to do an eviction. They will figure out if the moratorium applies to you or not, but likely not.
Q: Can I do end of term notices right now?
A: Not if you are one of the properties with a HUD or Enterprise backed loan. And, it may be unwise to do notices right now. Asking someone to move during a lockdown isn’t really feasible. We are hearing many property managers are not doing leasing and it is very hard to find a new place. We encourage you that if you do end of term notices, they have 90 or 120 days notice to give plenty of time for tenants to find a new place. However, consider the possibility that if you do give notices, the renter may stop paying and you may not be able to evict (in certain properties with certain loans).
Now is not the time for emotion. Every decision should be pragmatic and designed to look accommodating and reasonable. Its not the time to draw lines in the sand or be too firm. The media and our society will not look positively on landlords using emotion right now.
Q: What are some not to dos in working through COVID-19?
A: DOs – be reasonable and work with tenants where possible; negotiate with the tenant and create an interactive process; try to use sympathy and empathy as best as possible, you may find that most tenants are reasonable but may just need to express their stress to get it off their chest. Be pragmatic, If you gave someone notice to be out at end of March, it is unlikely they can find a place. Expend the notice if possible 90-120 days. If you can take half rent or a portion, and sign a repayment addendum, do that rather than insisting on full rent. No one is asking you to waive rent – just wait until the stimulus or unemployment check comes!
DON’Ts – Avoid acting emotionally. Do not lecture or text tenants right now. If you need time to compose yourself and your response before you send it do. WE are seeing communications to tenants from emotional landlords used against them in the media and the courts. Be kind. Bend over backwards. Don’t get offended when stressed out tenants unload on you. A renter yesterday lost it with the landlord and told them to stick something where the sun didn’t shine. The landlord gave a 120 day notice to terminate tenancy. 30 would have been normal, but under the circumstances, too short. Do not harass the tenant or call them repeatedly, be patient in trying to work with them through these issues. You can politely insist they sign a rent deferral agreement. Do not panic, these issues will take time to get through but we will get through them.
Solutions for your business if rent does not come in
Q: What about Small Business Loans?
A: The Small Business Administration is providing disaster assistance loans: SBA's Economic Injury Disaster Loans offer up to $2 million in assistance for a small business. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. Further resources can be found here and on SBA's websites: www.SBA.gov/coronavirus and www.SBA.gov/disaster .
Q: Did the deadline for taxes get extended?
A: On March 21st, The Treasury Department and the Internal Revenue Service are providing special tax filing and payment relief to individuals and businesses in response to the COVID-19 Outbreak. The filing deadline for tax returns has been extended from April 15 to July 15, 2020. The IRS urges taxpayers who are owed a refund to file as quickly as possible. For those who can't file by the July 15, 2020 deadline, the IRS reminds individual taxpayers that everyone is eligible to request an extension to file their return.
For more information and specifics on what is included in the filing and payment relief go to: https://www.irs.gov/newsroom/payment-deadline-extended-to-july-15-2020
Q: What maintenance should I and should I not be doing?
A: NAA has guidelines on this. It is here: https://www.youtube.com/watch?v=z2ojyMrWP4E&feature=youtu.be
