Communicating with your tenants Regarding COVID-19
Investor · New York & TN · Member since 2019 · 325 posts · 219 votes
Communicating with your tenants Regarding COVID-19
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Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
6yI haven't said anything yet. I'm prepared to work with my tenants to the best of my ability, but I will let them come to me for assistance if they need it.
26 Replies
- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesfrom what i see posted on BP it runs the gamit.
from those that say they don't care don't pay you dont stay.. but many jurisdictions are not processing evictions so they cant boot them even if they wanted to.
I personally think working with good tenants is the way to go.. and this is what your reserve accounts are for.. Landlords save a certain % for vacancy and cap ex.. you may need to dip into your cap ex funds along with your vacancy funds to carry you a few months.. so it should be no issue. Keep good tenants in place and this will pass. then its up to you if you want to try to chase them for lost rent.. myself I would attempt to have them pay it a little at a time over the remainder of their tenancy and any back rent i got i would consider myslef fortunate.
to some of the bigger syndicators who are very proactive and have offered one Months free rent to their entire 5,000 door portfolio.. now that is being proactive. Also should curry them a TON of good will. Just read a bunch of the threads on the subject in that last few weeks and you can see how folks are handling it.
I think its pretty obvious the most vulnerable tenants are going to be the service workers who have been laid off and as we know the average tenant has Zero savings.. so even though they could get unemployment i am not sure that will cover all their needs.. - Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes6y
I haven't said anything yet. I'm prepared to work with my tenants to the best of my ability, but I will let them come to me for assistance if they need it.
- Rental Property Investor · Delray Beach, FL · Member since 2014 · 224 posts · 169 votes6y
@Jay Hinrichs What about payment plans with tenants on near term expiring leases? For example, all of my current tenants have leases up in June or July. If I need to work out a deferred payment plan with one, then they're almost certainly going to need way more time than 3 months to get a new job/more hours. So would I have to also give them a renewal as well?
- Investor · New York & TN · Member since 2019 · 325 posts · 219 votes6y
Originally posted by @Nicole Heasley Beitenman:
I haven't said anything yet. I'm prepared to work with my tenants to the best of my ability, but I will let them come to me for assistance if they need it.
Thanks, I feel the same. Do you send monthly rent statements, or do you just expect the rent each month by a certain date? I send out rent statements on the 25th day of each month and debating whether I should say anything. . . . like "call me if . . . ." or give any info or advice?
- Investor · New York & TN · Member since 2019 · 325 posts · 219 votes6y
Originally posted by @Jay Hinrichs:
from what i see posted on BP it runs the gamit.
from those that say they don't care don't pay you dont stay.. but many jurisdictions are not processing evictions so they cant boot them even if they wanted to.
I personally think working with good tenants is the way to go.. and this is what your reserve accounts are for.. Landlords save a certain % for vacancy and cap ex.. you may need to dip into your cap ex funds along with your vacancy funds to carry you a few months.. so it should be no issue. Keep good tenants in place and this will pass. then its up to you if you want to try to chase them for lost rent.. myself I would attempt to have them pay it a little at a time over the remainder of their tenancy and any back rent i got i would consider myslef fortunate.
to some of the bigger syndicators who are very proactive and have offered one Months free rent to their entire 5,000 door portfolio.. now that is being proactive. Also should curry them a TON of good will. Just read a bunch of the threads on the subject in that last few weeks and you can see how folks are handling it.
I think its pretty obvious the most vulnerable tenants are going to be the service workers who have been laid off and as we know the average tenant has Zero savings.. so even though they could get unemployment i am not sure that will cover all their needs..Thanks. Yes good tenants won't be a problem.
One problem that I see is when local gov't starts telling people that their mortages may be frozen for upto 90 days. The danger in this is that tenants will assume that they are off the hook for 3 months worth of rent.
Obviously the quicker we recover from this, the less problematic it will be.
- 6yMichael K GallagherBusiness MemberReal Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes
I follow the lines of @Jay Hinrichs in that while we have not had a conversation with our tenants yet, but we have already decided that our number one priority is doing what we can to help them stay. This probably means as was previously pointed out just dipping into our Capex/reserves, but that is worth it to us as they have been fantastic tenants and its worth it to us to work with them for the long term relationship.
- Investor · Las Vegas, NV · Member since 2014 · 31 posts · 38 votes6y
Currently, I work as both tenant and landlord in close to 32 different states with investment and/or rental properties, and in some cases as the buyer/tenant on lease/options and in many other cases as the landlord for the same including several subject to's.
I have had communications from my attorneys/legal counsel from a handful of those states already, and they ARE as you all have mentioned, making recommendations that run the gamet. I do know it's TOO early to KNOW what's going to happen, and certainly even with local and federal directives, everyone still needs to consult their counsel(especially locally where applicable).
I'm glad to share insights as I hear and receive and process my legal communications.
Now, to @Peter Nikic - I personally believe and practice that proactive, positive, compassionate communication is important. But, as with everything not having shaken out completely, I'd speak from honesty and neutrality until we are all really clear on what is and is NOT. Many tenants and landlords will hear many things, interpret what they hear the way they WISH to hear it and then react to what they think they HEARD.
Based on what you asked up top, I'm sure you can handle it with wisdom and grace. Hit me through direct message and I'll share some specific language and perspective with you.
Regards,
Coach Collard - Investor · Las Vegas, NV · Member since 2014 · 31 posts · 38 votes6y
Just got this, this AM, from our counsel in Texas. Generally, NOT too specific, but helps to know what's going on from an attorney.
"The situation in Texas remains fluid. The chief executive officials (County Judges) in Dallas and Harris Counties have shut the JP courts for any evictions or writs of possession. Dallas County (Dallas and surrounding cities) is under a 60 day moratorium, and Harris County (Houston) is under moratorium until the end of March. The Harris County Judge has given indications that the March date may be extended."
- Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes6y
You all want to keep the "good tenants", does this mean you are treating the good tenants differently from the not so good tenants?
If you work something out with one tenant who is struggling in this crisis, whether it is rent reduction, rent credit, deferred payment plan of some sort, applying last month or deposits towards rent, whatever...how do you solve the problem in a multi family setting where everyone including the ones who could afford rent stop paying "If George gets to skip rent I am not paying either!"
- Rental Property Investor · Northern NJ · Member since 2019 · 673 posts · 677 votes6y
Originally posted by @Sam Leon:
You all want to keep the "good tenants", does this mean you are treating the good tenants differently from the not so good tenants?
If you work something out with one tenant who is struggling in this crisis, whether it is rent reduction, rent credit, deferred payment plan of some sort, applying last month or deposits towards rent, whatever...how do you solve the problem in a multi family setting where everyone including the ones who could afford rent stop paying "If George gets to skip rent I am not paying either!"
I'd explain to them the person down the hall isnt "skipping rent". They are some sort of payment plan or deferred payments. Another way to explain it? You're the boss and the owner. Unless this person complaining can show proof of some financial hardship due to what's going on, end of discussion. I hope as a landlord/business owner you're able to handle conversations like this.
- Rental Property Investor · Burnsville, MN · Member since 2017 · 48 posts · 25 votes6y
@Peter Nikic
Hi All. I was considering offering my tenants (two good tenants) a 15% rent credit for rent due on April 1st. But must be paid on 1st (they always do pay by the 1st-3rd T latest).
I have 2 years unused reserves in CAPEX, Vacancy and Maintenence. Thats how good of tenants they are. One could be impacted by hardship but maybe not, the other is a nurse and is probably working her butt off.
We saw it as a “we are all in this together” moment and maybe “its not all about the money” moment but are also concerned about setting a precedence.
I’ve seen syndicators proactively offering one month free. I can’t do that but thought the gesture would buy good faith and avoid being taken advantage of should legislation interfere with evictions soon?
Thoughts?
- Rental Property Investor · Ottawa, ON · Member since 2019 · 68 posts · 225 votes6y
@Peter Nikic this is what we sent... (you’ll just have to edit for US since we’re canadian)
“Hello,
We have been continuing to monitor the situation surrounding COVID-19. We are sending an email to all our tenants to address any job layoffs or lack of funds caused by this outbreak.
We understand these are unprecedented times and that a lot of people may be confused and uncertain, especially when thinking of their financial stability. If you are experiencing financial issues due to this situation, we recommend staying up to date with the several government programs offering financial aid to those in need and to apply as soon as they become available.
If you are directly affected by the COVID-19 because you are sick or quarantined and you have not yet applied for EI benefits, please submit your application as soon as possible. We've included the link for more information: (link)
If you are still worried of not being able to pay next month's rent or any future rents and have exhausted all your options through borrowing from family members or other, we ask that you please send us an email prior to the rent's due date explaining your situation along with proper documentation. At that point we will assess and come up with a plan together.
In the meantime, we would also like to inform you that due to isolation requirements, any maintenance request will need to be postponed until further notice, unless of a major issue.
We want to sincerely thank those who are working hard within the essential services of our community and to all others who are staying home to help avoid the spread.
Our best wishes to you and your families.”
- Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes6y
Originally posted by @Sam Leon:
You all want to keep the "good tenants", does this mean you are treating the good tenants differently from the not so good tenants?
If you work something out with one tenant who is struggling in this crisis, whether it is rent reduction, rent credit, deferred payment plan of some sort, applying last month or deposits towards rent, whatever...how do you solve the problem in a multi family setting where everyone including the ones who could afford rent stop paying "If George gets to skip rent I am not paying either!"
One reason is because you have no choice really. Around here courts are closed. Also, "I don't discuss tenants' private information."
- Rental Property Investor · MI · Member since 2019 · 192 posts · 205 votes6y
@Peter Nikic
Fair housing laws scare me so I sent out a general letter addressed as “Hello Everyone” .
I just basically stated my concern for their safety and well-being during this Virus and if they need help to reach out to DHS, they may be eligible for the Gov’t stimulus check, and that I will work with them if need be. And I left it there. Sweet and simple.
- Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes6y
Originally posted by @Mark F.:
Originally posted by @Sam Leon:
You all want to keep the "good tenants", does this mean you are treating the good tenants differently from the not so good tenants?
If you work something out with one tenant who is struggling in this crisis, whether it is rent reduction, rent credit, deferred payment plan of some sort, applying last month or deposits towards rent, whatever...how do you solve the problem in a multi family setting where everyone including the ones who could afford rent stop paying "If George gets to skip rent I am not paying either!"
I'd explain to them the person down the hall isnt "skipping rent". They are some sort of payment plan or deferred payments. Another way to explain it? You're the boss and the owner. Unless this person complaining can show proof of some financial hardship due to what's going on, end of discussion. I hope as a landlord/business owner you're able to handle conversations like this.
This is a hypothetical scenerio but one I can see happening so I would like to have a plan in place in case it does happen.
The question is many here suggested "I want to work something out with my good tenants" this implies something could be worked out with only good tenants and not so much for bad tenants (assuming some of us have tenants we may not want to keep)? My point is I am thinking especially in a multi family building tenants do become friendly, and many are staying home, they are probably talking to each other about their respective situations.
Therefore, in those types of rentals, if I give one tenant a break (of some sort, whether it may be deferred payment, or rent credit or something else), I think I have to extend the same to everyone in that same building to be fair, and yes requiring proof of hardship may be necessary, and what would be a criteria one would use to evaluate hardship? Does this criteria need to be uniformly applied to not get into trouble later on? A termination of employment letter from the employer? A self employed contract hair dresser what type of paperwork are you requiring to prove hardship?
In my opinion, this is more likely a 3-6 month crisis, it is not a 1 month process. Every step taken is an unknown and no one knows if it's a forward or backward step.
- Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes6y
Originally posted by @Max T.:
Originally posted by @Sam Leon:
You all want to keep the "good tenants", does this mean you are treating the good tenants differently from the not so good tenants?
If you work something out with one tenant who is struggling in this crisis, whether it is rent reduction, rent credit, deferred payment plan of some sort, applying last month or deposits towards rent, whatever...how do you solve the problem in a multi family setting where everyone including the ones who could afford rent stop paying "If George gets to skip rent I am not paying either!"
One reason is because you have no choice really. Around here courts are closed. Also, "I don't discuss tenants' private information."
I don't discuss tenants' private information either, but tenants do talk to each other. My tenants come to me saying "I see that you gave unit B a brand new refrigerator with a water dispenser, I would like one of those too" so I know they are friendly with each other. There is no reason to believe they will not share information on how they are coping with the crisis financially.
- Investor · New York & TN · Member since 2019 · 325 posts · 219 votes6y
Originally posted by @Natalie Cloutier:
@Peter Nikic this is what we sent... (you’ll just have to edit for US since we’re canadian)
“Hello,
We have been continuing to monitor the situation surrounding COVID-19. We are sending an email to all our tenants to address any job layoffs or lack of funds caused by this outbreak.
We understand these are unprecedented times and that a lot of people may be confused and uncertain, especially when thinking of their financial stability. If you are experiencing financial issues due to this situation, we recommend staying up to date with the several government programs offering financial aid to those in need and to apply as soon as they become available.
If you are directly affected by the COVID-19 because you are sick or quarantined and you have not yet applied for EI benefits, please submit your application as soon as possible. We've included the link for more information: (link)
If you are still worried of not being able to pay next month's rent or any future rents and have exhausted all your options through borrowing from family members or other, we ask that you please send us an email prior to the rent's due date explaining your situation along with proper documentation. At that point we will assess and come up with a plan together.
In the meantime, we would also like to inform you that due to isolation requirements, any maintenance request will need to be postponed until further notice, unless of a major issue.
We want to sincerely thank those who are working hard within the essential services of our community and to all others who are staying home to help avoid the spread.
Our best wishes to you and your families.”
Thanks! Very nice letter. I hope this does the trick for you. I am still processing, but letters like yours are a great help.
- Investor · New York & TN · Member since 2019 · 325 posts · 219 votes6y
Originally posted by @E.S. Burrell:
@Peter Nikic
Fair housing laws scare me so I sent out a general letter addressed as “Hello Everyone” .
I just basically stated my concern for their safety and well-being during this Virus and if they need help to reach out to DHS, they may be eligible for the Gov’t stimulus check, and that I will work with them if need be. And I left it there. Sweet and simple.
Same, I want to do the right thing but fear potential pitfalls. like trying to feed a stray dog who turns around and bites you.
I like simple.
- Member since 2019 · 1 post · 1 vote6y
@Nicole Heasley this is the approach I am taking. I though about sending a letter but I am also worried if I sent a letter saying I will work with them they will automatically come to me saying they can't pay even if they really could make it work. I feel like some will take advantage.
- Member since 2019 · 448 posts · 306 votes6y
Originally posted by @Peter Nikic:
I'm trying to figure out how to best communicate with my tenants regarding this difficult time of the corona virus.
I'd like to be sensitive to what's going on, but I also want to be able to cover my mortgages, bills etc.
Anyone have any thoughts? letters that you're sending out to tenants? I'd love to get perspectives before reaching out to my tenants. Thanks.
@Peter NikicI have a plan in place that I will share..... I know mostly everyone is living close to paycheck by paycheck in my properties, but this coming months rent isn't an issue for my current tenants. Its after that that's the problem.
What I have decided is that next month if tenants are having trouble paying, I will apply their security deposit to the rent for them, and explain to them that I am taking a big risk by giving you back your deposit to cover rent, and that I hope that they will in return respect my home and the things I have provided in it extra carefully. All of my tenants and I have good relationships, and they will all have no problem with this. Then once this whole thing blows over, I will give them a period of time to accumulate their deposit back up again.
Hope this helps.
-Matt
- Rental Property Investor · Northern NJ · Member since 2019 · 673 posts · 677 votes6y
Originally posted by @Sam Leon:
Originally posted by @Max T.:
Originally posted by @Sam Leon:
You all want to keep the "good tenants", does this mean you are treating the good tenants differently from the not so good tenants?
If you work something out with one tenant who is struggling in this crisis, whether it is rent reduction, rent credit, deferred payment plan of some sort, applying last month or deposits towards rent, whatever...how do you solve the problem in a multi family setting where everyone including the ones who could afford rent stop paying "If George gets to skip rent I am not paying either!"
One reason is because you have no choice really. Around here courts are closed. Also, "I don't discuss tenants' private information."
I don't discuss tenants' private information either, but tenants do talk to each other. My tenants come to me saying "I see that you gave unit B a brand new refrigerator with a water dispenser, I would like one of those too" so I know they are friendly with each other. There is no reason to believe they will not share information on how they are coping with the crisis financially.
That's an even better reason, you don't discuss it. Of course they talk to each other. When I rented I talked to other tenants about gripes we were having. I think you answered your own question.
- Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes6y
The latest from the white house briefing is the immediate suspension of forward and reverse mortage foreclosures and evictions for single family homes for the next sixty days, I assume this means for all HUD properties?
- Investor · Las Vegas, NV · Member since 2014 · 31 posts · 38 votes6y
Hope this helps everyone for perspective on what to do or NOT do. It may be different state to state or different jurisdictions or even different legal opinions...this is from my counsel that I have retained recently for properties in the mid-west...Kansas City for Kansas and Missouri.
Again just sharing her perspective and professional communications to help everyone in their shift and evaluating what to do or NOT do.
*************** directly from her yesterday
First, it is important to understand the current state of affairs in the court systems for both Kansas and Missouri. On March 16, 2020, Missouri suspended all in-person court proceedings until April 3, 2020. There is a possibility that this date could be extended. The courts will continue to accept eviction filings, but the sheriff's offices will perform no lock outs until after April 3, 2020. Due to the inevitable backlog in both the courts and sheriff's office, we anticipate significant delays even after April 3, 2020.
In Kansas, all courts have been restricted to emergency operations until further notice. Executive Order No. 20-06 was issued on March 18, 2020 temporarily prohibiting evictions and foreclosures. To the best of our knowledge, the courts will continue to accept eviction filings, but the lock outs will not occur until after May 1, 2020. Douglas County, Kansas will delay all eviction hearings until June 1, 2020.
On a Federal level, the U.S. Department of Housing and Urban Development ("HUD") will suspend foreclosures on Fannie Mae and Freddie Mac loans through the end of April 2020. HUD will also not allow any eviction of individuals living in federally-funded public housing until May 1, 2020. Please note that this moratorium only applies to HUD subsidized housing.
We recommend landlords and property owners take the following action:
- Do not forgive any rent that is due unless you are prepared to forgive everyone's rent (which we do not recommend);
- If you are going to offer hardship relief, compose written criteria outlining requirements for the relief and then apply that criteria to all applicants equally regardless of the tenants race, color, religion, national origin, age, sex, pregnancy, citizenship, familial status, and/or disability status;- Require your tenants to communicate with you in writing and keep copies of these writings in your tenant files; and
- Continue to follow your normal processes and procedures, especially regarding evictions. There will be a significant backlog and we do not want clients to be further prejudiced. - Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes6y
Originally posted by @Matt Nico:
Originally posted by @Peter Nikic:
I'm trying to figure out how to best communicate with my tenants regarding this difficult time of the corona virus.
I'd like to be sensitive to what's going on, but I also want to be able to cover my mortgages, bills etc.
Anyone have any thoughts? letters that you're sending out to tenants? I'd love to get perspectives before reaching out to my tenants. Thanks.
@Peter Nikic
I have a plan in place that I will share..... I know mostly everyone is living close to paycheck by paycheck in my properties, but this coming months rent isn't an issue for my current tenants. Its after that that's the problem.
What I have decided is that next month if tenants are having trouble paying, I will apply their security deposit to the rent for them, and explain to them that I am taking a big risk by giving you back your deposit to cover rent, and that I hope that they will in return respect my home and the things I have provided in it extra carefully. All of my tenants and I have good relationships, and they will all have no problem with this. Then once this whole thing blows over, I will give them a period of time to accumulate their deposit back up again.
Hope this helps.
-Matt
Thanks for sharing.
I would also like to see more input from fellow landlords as far as what they are considering doing for the tenants who are being hit by this crisis.
Some of the things that crossed my mind:
- -rent credit
- -rent reduction
- -deferred rent payment plan
- -waiving late fees
- -apply security deposits as rent payment
- -apply advanced rent (last month's rent) as rent payment
- -what else? need ideas here...
and specifically, do you have a short and medium term strategy? Will you do this differently is this crisis last for 6 months vs 2 months?
For example, I am seriously toying with two options, one is to apply last month's rent and security deposit as rent, but this is only to last two months. If this lingers any longer, then we are back to the same boat in another 2 months.
I am also seriously considering a rent credit for multi-family occupants with a weight tilted to longer term tenants. For example one formula could be:
$x * n
Let's say x could be a number such as $50. The n is a multiplier which is the number of years you have occupied the property.
If this is your forth year as a tenant, then the number works out to be $50*4 = $200.
If this is your first year as a tenant, then the number is just $50*1 = $50.
This is then the amount you can deduct from your rent for a period of say 60 days or longer (TBD) IF you the reduced rent on time. I am thinking this will be a fair way to give more relief to the better longer term tenants, and does not require me to have one to one conversations, reviewing evident of hardship, and making case by case decisions that may come back to me as being unfair treatments and playing favorites. I am not saying I am definitely doing this, but I am just throwing ideas on the wall.
- Rental Property Investor · MI · Member since 2019 · 192 posts · 205 votes6y
*************** directly from her yesterday
First, it is important to understand the current state of affairs in the court systems for both Kansas and Missouri. On March 16, 2020, Missouri suspended all in-person court proceedings until April 3, 2020. There is a possibility that this date could be extended. The courts will continue to accept eviction filings, but the sheriff's offices will perform no lock outs until after April 3, 2020. Due to the inevitable backlog in both the courts and sheriff's office, we anticipate significant delays even after April 3, 2020.
In Kansas, all courts have been restricted to emergency operations until further notice. Executive Order No. 20-06 was issued on March 18, 2020 temporarily prohibiting evictions and foreclosures. To the best of our knowledge, the courts will continue to accept eviction filings, but the lock outs will not occur until after May 1, 2020. Douglas County, Kansas will delay all eviction hearings until June 1, 2020.
On a Federal level, the U.S. Department of Housing and Urban Development ("HUD") will suspend foreclosures on Fannie Mae and Freddie Mac loans through the end of April 2020. HUD will also not allow any eviction of individuals living in federally-funded public housing until May 1, 2020. Please note that this moratorium only applies to HUD subsidized housing.
We recommend landlords and property owners take the following action:
- Do not forgive any rent that is due unless you are prepared to forgive everyone's rent (which we do not recommend);
- If you are going to offer hardship relief, compose written criteria outlining requirements for the relief and then apply that criteria to all applicants equally regardless of the tenants race, color, religion, national origin, age, sex, pregnancy, citizenship, familial status, and/or disability status;- Require your tenants to communicate with you in writing and keep copies of these writings in your tenant files; and
- Continue to follow your normal processes and procedures, especially regarding evictions. There will be a significant backlog and we do not want clients to be further prejudiced.
thank you!
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