How to Handle Tenants that Have Back Rent Due to COVID-19
Over the past year, millions of Americans have faced lay-offs, reduced hours, medical bills, and financial stress as a result of the COVID-19 pandemic causing rent due issues for many renters across the country. For many, this means missed rent payments and large sums of back rent due.
For landlords, this presents a challenging situation. While it’s important to be empathetic to tenants’ very real struggles, the reality is that landlords still have to pay taxes, mortgages, and expenses. This tension can make things hard for landlords.
One of the best things landlords can do to make it easier to navigate this difficult issue is to have a plan for dealing with missed rent. Rather than simply reacting to situations as they arise, landlords should have a clear process for dealing with tenants that have missed rent payments. Here are some things to keep in mind as you formulate a plan that’s right for you and your tenants.
Keep Lines of Communication Open
Communicating with tenants is a key first step towards dealing with concerns regarding rent payments. As a landlord, you want to know that tenants are having financial troubles before they begin missing rent payments. This is especially true in the current COVID-19 situation.. With that in mind, here are some tips to ensure good communication:
- Be proactive about talking with tenants, reaching out regularly and encouraging them to share any concerns
- When communicating with tenants, listen and be empathetic
- At the same time, make it clear that you still have expenses and rent is still due
Always Consult and Comply with the Lease
When concerns over rent payments arise, it’s important for landlords to first turn to the lease to determine the next steps. A well-written lease will clearly document how to handle late payments, and it’s important to consult and comply with the lease at all times.
During difficult times, it can be tempting for landlords to take matters into their own hands. Yet, it’s important to follow the appropriate procedures, which comply with all laws and regulations. And it’s helpful to remember that it’s never appropriate to harass tenants, cut off utilities, lock tenants out of a unit, or move a tenant’s personal belongings in order to address missed rent payments.
An effective lease will alleviate the temptation for any inappropriate measures by outlining exactly what to do. It’s there to help guide you through issues like dealing with back rent, so make sure that you rely on it when dealing with missed rent payments. If you don’t already have a good lease, now is the time to start using one. ezLandlordForm’s lease-builder wizard and state assist makes it easy to create a comprehensive lease that complies with all state and federal laws.
Help Tenants Brainstorm Options for Rent Due
When tenants express that they are having a difficult time paying rent, try to help give them options for making payments. There are a variety of state and federal emergency rental assistance programs aimed at providing COVID-19 rent relief. Landlords should stay informed about changing government programs in order to present them as an option for tenants.
In addition, consider other creative solutions, for example,
- Reaching out to family members
- Paying rent on a credit card
- Looking for opportunities for additional work
The bottom line is that before addressing issues like rent forgiveness or deferment, it’s always helpful to give tenants as many options as possible to stay on track with rent.
Workout a Repayment plan for Rent Due
If a tenant simply cannot make rent payments due to financial strain caused by COVID-19, you should sit down with them and work out a repayment plan. This generally includes a reduced rent for a specific period of time and a plan for how missed rent will be repaid.
The goal with a repayment plan should be coming up with a plan tenants can follow in order to keep up with rent as much as possible and to avoid having them fall too far behind. When drafting the plan, make sure that it’s realistic and in writing. ezLandlordForms offers a template to guide landlords through the process of drafting a repayment plan.
The last year has been an unprecedented one for landlords, with tenants falling behind on rent payments and a federal moratorium on evictions. While it’s a difficult time, having a good lease, a good plan for dealing with missed rental payments, and clear documentation of any repayment plans or lease addendums can make it a little easier. For more COVID-19 forms and resources, visit ezLandlordForms.