21 Apr Coronavirus and Rent
Coronavirus and Rent
Are you a San Diego landlord whose tenants can’t pay rent because of coronavirus? With millions of San Diegans out of work, many renters suddenly cannot afford their rent. In fact, many have to decide between paying rent or buying food. The fact is, this is a troubling time full of uncertainty. One that not only impacts renters in San Diego, but also the landlords who rent to them. With landlords now fearing they will lose their investments if they stop receiving rental income, having a plan is more important than ever. Especially when you consider the amount of money it takes to handle maintenance requests!
For the landlords who have rent guarantee insurance also known as rent default insurance, your rent might be covered during the coronavirus. But, for those who do not have this type of coverage on their landlord insurance policy, you are likely wondering how to respond to late rent. Or, whether to enact rent deferrals or payment plans so that you can keep up with your own mortgage payments. Luckily, we have some insight on planning and dealing with the current circumstances.
The information in this article is not a substitute for legal advice.
Late Rent & Evictions During The Coronavirus Pandemic
With cities and states across the country enacting moratoriums on evictions, many landlords have been left without clear guidance on how to deal with late rent payments. In fact, in the city of San Diego, an eviction moratorium went into effect on March 25, 2020 and will last until May 31, 2020. Although it requires tenants to demonstrate a substantial decrease in income caused by COVID-19 in order to qualify it does not relieve them from paying their rent. But, than again, the law itself was developed to ensure those who can’t pay rent cannot be evicted. Inevitably, this means you will likely need to figure out how to work with your tenants. And, the best place to start is opening the lines of communication.
Planning For Late or Missed Rent Payments:
- Have A Plan: commit to having a plan written down for how you will deal with this issue
- Empathize: make sure to listen to your tenant, talk with them, and empathize with them
- Remind Them: make sure they understand where you are coming from (you have a mortgage to pay) and that rent is still due
- Give Them Options: make them aware of assistance programs being offered, allow them to pay with a credit card
- When All Else Fails: come up with a rent deferral plan (more on this below)
Rent Deferral Plan
Remember that you and your tenants are under tremendous pressure right now. Working with them to come up with payment options, may be your best bet during this time. A rent deferral program offers you a way to keep money coming in while also keeping your tenants in place.
How Rent Deferral Would Work
Typically, the agreement would provide a deferral of the payment of rent for the month of May 2020. This would be an acknowledgment by the tenant that the rent is still owed, but the payment will not be considered late if the agreement is complied with. Here’s how it works:
- At or before May’s rent due date, affected tenants would request a rent deferral from their landlord
- Landlords will assess if a tenant qualifies under their criteria
- Tenants will be required to sign a rent deferral agreement, outlining repayment plans
Example Rent Deferral Options
- Cap the monthly amount deferred or only defer a portion
- The monthly repayment of rent can be as many months as you feel appropriate
- But should not extend beyond the end of the current lease
With the coronavirus forcing San Diegans out of work, many landlords are dealing with tenants struggling to pay rent due to financial hardship caused by the pandemic. For this reason, it may be wise to hire a property management company who understands how to deal with these types of situations.
At Rancho Mesa Properties, all of our property managers are trained to understand and abide by all federal, state and local laws. This means, we can help you navigate all the new laws while ensuring you stay profitable. We can even customize our property management services to your needs.
Whether you need leasing, consultation, or are in search of monthly management services, we can help. From North County San Diego to Downtown, we manage all types of rental properties throughout San Diego including homes, condos, multifamily such as duplex and triplexes, and even small apartment buildings. Let us manage your rental properties so you can enjoy your life! Call us today at (858) 576-2176.