My tenant in California just told me that he can’t make rent

14 Replies

Hi. Not a lot at the moment. You can always ask if he can pay you what he has now in partial rent so you at least have some rental income coming in. 

As you know you can't evict him currently so as mentioned you might as well try and get some money from him.

@Jeff I would agree with Karl. Ask for a partial payment. Then explain the rest of the payment could be broken up over the next few weeks. Draw out a payment schedule. For example: 

Rent: $1000

Partial payment: $250

Week 2: $250

Week 3: $250

Week 4: $250

No matter what rent is still due. They are only asking landlords to be lenient. 


according to my understanding of the CA eviction moratorium, he only qualifies for protection if he can provide proof of being laid off from the CV19 pandemic. He is required to provide his dated letter of termination.

Of course, it really doesn't matter if the courts are not open for business.

Also, if he was legitimately laid off, he will absolutely qualify for unemployment and the stimulus money. He should be getting enough to pay something!

Please google the CA law for the details and be sure to follow through with all the formalities and be sure to encourage him to seek the unemployment, as you will need to see that paperwork too...

Good luck

Technically, a tenant needs to prove hardship as a result of COVID, but you have little recourse right now.

Do yourself a favor and try to find a happy medium with the tenant. Trying to evict during a pandemic is going to take several months and is probably not wise. 

To your success!

Verify their loss of income.  Find out their current income,  Ask for a partial payment and negotiate to get at least 1/3 of their new income.  Remember they likely are getting high unemployment, reduced utility bills, and food stamps.    Ask that the $1200 government virus check or whatever amount they are getting be given to you for rent when they get it in a few weeks.  Ask what they are doing to increase their income.  Give them suggestions.  Walmart is hiring anyone who can apply.  Ask if they want to move to someplace that will cost them less.  Make sure they know that they still owe you the rent and you will evict when the courts open...

I'd be friendly but business-like and tell the tenant that the problem is that he'll still owe the rent, even if you can't evict him right now and you need the rent money to pay your bills and you'd really hate to have to evict him after the virus thing is over, because that will end up on an eviction report.  And is he sure he won't be getting unemployment?  Would he like to go ahead and give 30 days notice now and leave the place clean, so he doesn't end up with an eviction and you can take this month's rent out of his deposit?

If you put it like that, he may decide he'll find a way to pay you.  That's how I learned to handle my tenants.  I was never confrontational or unkind.  I'd just spell out the limitations I had to work with on my end and how they'd be better off working with me to end up with a fair resolution.  

Originally posted by @Jeff Low :

My tenant in California just told me that he can’t make rent next month due to the Covid19 pandemic. I don’t have a mortgage but need the money for my living expenses. What options I have? 

You posted this on April 5th. Your tenant said he can't pay rent for May? How does he know already? Is he applying for assistance? Looking for another job?

I would simply tell them you need the income and point him to resources. There's almost an entire month to come up with the money.

 

@Jeff Low   May or April rent?  For April, take a partial payment and have him pay the rest over the next few months.  If it is May-how does he know that he can't pay?  He has over 3 weeks to figure that out and find money.  Sure if he's out of work, he qualifies for unemployment or some of the money that is being given out by the government.

Originally posted by @Nathan G. :
Originally posted by @Jeff Low:

My tenant in California just told me that he can’t make rent next month due to the Covid19 pandemic. I don’t have a mortgage but need the money for my living expenses. What options I have? 

You posted this on April 5th. Your tenant said he can't pay rent for May? How does he know already? Is he applying for assistance? Looking for another job?

I would simply tell them you need the income and point him to resources. There's almost an entire month to come up with the money.

 

 Exactly, they should be getting unemployment plus there is an increase on unemployment of $600 a week right now, so that raises payments. On top of that, every adult in the home would get $1200 plus $500 per minor as part of the stimulus. That is supposed to pay out in April, maybe very early May. There is also likely community outreach programs that could help with rent. Most car companies are allowing payments to be delayed, so they can take advantage of that to save money for rent. Most utilities are not disconnecting due to non-payment. Ultimately it is worth remembering that although you can't evict, rent is still due. Tell them your expectation is that they are looking to utilize all the above methods to get rent money. 

When people are not working, they have all day free to research these programs, apply for them, call companies for loan modification and plan their finances. It is far too early to say they will not have money for rent. 

I would make it clear that we are all in this together.  In other words, make it clear that you also rely on rental income for living expenses.  Also, remind the tenant that if rent is not paid then the balance will keep accumulating.  It is not rent forgiveness (at least not in Vegas, check with CA). 

@Jeff Low ..... I have a tenant that has been consistently late with rent since November and still owes late fees for January and February. He never reaches out to me to let me know he’s going to be late, I always have to reach out to him to ask for the rent. On March 27 (rent was due on March 1) he paid partial rent and when I asked him when he’d be paying the remainder he said, “ when I get it, my job shut down.” Meanwhile, I anonymously called his work and was informed that everyone was still working and they haven’t laid anyone off nor have they told employees to stay home. So basically he was lying. On April 1, I reached out to him again to ask him when he’d be paying the the balance for March and April’s rent and again he said his job is shut down. I informed him that from what I’ve seen that company was still fully operational and haven’t laid off anyone and he said, “yes, I’m still working there but my other job shut down.”

Had he been a decent tenant and communicated with me, I would take for face value that he was out of work because of the Coronavirus but since he has a history of being late I knew better. My point for this rant is don’t take what your tenant is telling you for face value unless they are decent tenants. I should have done something months ago but now I’m stuck. He had the nerve to send me the new rules regarding evictions reminding me or ensuring that I know I can’t evict him until some time in June...

I think it’s a good idea to inform your tenant that you will take partial payments until they are able to pay in full.

That's a tough situation Jeff that unfortunately is becoming a very commonplace problem. As others have mentioned, partial payments are a great starting point. That stimulus bill has a ton of moving parts to it. If you have a good rapport with your tenant you can share an educational video on some of the options available to them. In case you haven't seen it, Meet Kevin did a great video a week ago on a number of the components of that Stimulus bill. Heck, you are probably entitled to more money than you'd think from it as well. 

Hoping it all goes well for you!