Leasing monthly instead of yearly due to Covid
Member since 2020 · 21 posts · 6 votes
Leasing monthly instead of yearly due to Covid
Most Popular Reply
Property Manager · Windsor Locks, CT · Member since 2016 · 1k+ posts · 1k+ votes
5y@Dana Williams it really doesn't matter WHAT you are evicting for right now. Whether it be for non payment, lapse of time, nuissance, etc. The issue isn't necessarily that the CDC has halted evictions or that there are moratoriums in place - it's that even when these moratoriums are lifted, there is going to be a heavy backlog of eviction cases.
I'd like to think that there is some protection in having a shorter term lease, but at the end of the day, you're going to be in the same eviction line as the guy with a 12 month lease, so be ready for that. You can evict for reasons not related to non payment of rent (as @Kyle J. said), but even those evictions are going to put you past most eviction moratoriums in place right now anyway.
We're proceeding as usual, and giving special attention to income vs debt ratios and how much a tenant has in savings.
11 Replies
- Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes5y
@Dana Williams What your Realtor/ex-wife said makes sense. Longer leases tend to favor the tenant, while month-to-month gives more control to the landlord. That's always been true, even more so now in these times of COVID and eviction moratoriums.
Let me give you an example. Suppose you have a tenant who stops paying rent. I've actually heard some attorneys make the argument that the federal CDC order (which is essentially a moratorium on evictions for non-payment of rent if the tenant claims they cannot pay), would NOT apply if the tenant were on a month-to-month agreement and the landlord chose to terminate the month-to-month tenancy instead of trying to evict for the past due rent. The reason is, the CDC order (and even most state/local orders for that matter) only applies to evictions for the non-payment of rent. You can still evict for other reasons. So if you terminated their tenancy and they refused to leave, you'd be evicting them for being a holdover tenant.
Again, I've already heard attorneys who have been asked about this and they believe it should work. Of course, every jurisdiction is different, and ultimately it's up to the judge and his opinion is the only one that matters.
Point is, I think your Realtor/ex-wife makes a valid argument worth taking into consideration.
- Member since 2020 · 21 posts · 6 votes5y
Originally posted by @Kyle J.:
@Dana Williams What your Realtor/ex-wife said makes sense. Longer leases tend to favor the tenant, while month-to-month gives more control to the landlord. That's always been true, even more so now in these times of COVID and eviction moratoriums.
Let me give you an example. Suppose you have a tenant who stops paying rent. I've actually heard some attorneys make the argument that the federal CDC order (which is essentially a moratorium on evictions for non-payment of rent if the tenant claims they cannot pay), would NOT apply if the tenant were on a month-to-month agreement and the landlord chose to terminate the month-to-month tenancy instead of trying to evict for the past due rent. The reason is, the CDC order (and even most state/local orders for that matter) only applies to evictions for the non-payment of rent. You can still evict for other reasons. So if you terminated their tenancy and they refused to leave, you'd be evicting them for being a holdover tenant.
Again, I've already heard attorneys who have been asked about this and they believe it should work. Of course, every jurisdiction is different, and ultimately it's up to the judge and his opinion is the only one that matters.
Point is, I think your Realtor/ex-wife makes a valid argument worth taking into consideration.
Thanks for the explanation Kyle. I think a lot of us seem to only think of evictions in the term of nonpayment but everything you said brings it all into prospective.
- 5yBjorn AhlbladPro MemberInvestor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
We only offer MTM leases. Prior to move in we get first and last month's rent and a security deposit equal to one month's rent. In the last five years we have only offered a one year lease twice.
For COVID we are increasing rent, minimum income to 3.5 times rent, credit score to 675, and we are only looking at applicants whose jobs are essential, or those who work from home. We are making more use of social media. We have always been thorough screeners so we are not talking big changes.
There are not many professional tenants or 'freeloaders' in our area-not like NYC-and you can screen for that element to some degree by looking at social media and being on the lookout for those who do not understand that actions have consequences.
- Property Manager · Windsor Locks, CT · Member since 2016 · 1k+ posts · 1k+ votes5y
@Dana Williams it really doesn't matter WHAT you are evicting for right now. Whether it be for non payment, lapse of time, nuissance, etc. The issue isn't necessarily that the CDC has halted evictions or that there are moratoriums in place - it's that even when these moratoriums are lifted, there is going to be a heavy backlog of eviction cases.
I'd like to think that there is some protection in having a shorter term lease, but at the end of the day, you're going to be in the same eviction line as the guy with a 12 month lease, so be ready for that. You can evict for reasons not related to non payment of rent (as @Kyle J. said), but even those evictions are going to put you past most eviction moratoriums in place right now anyway.
We're proceeding as usual, and giving special attention to income vs debt ratios and how much a tenant has in savings. - Real Estate Agent · Member since 2020 · 25 posts · 7 votes5y
@Kyle J. I am currently dealing with a tenant who has been living on a month to month lease since 2018 and is currently behind 3 months on rent, he has in fact filled out a housing assistance application and gave me the CDC moratorium affidavit. I gave him until December 1st to resolve the nonpayment issue but it was verbal, no formal notice. If he doesn’t have the payment on the 1st will I still be able to proceed with a formal eviction? And how quick is the process currently?
- Real Estate Agent · Member since 2020 · 25 posts · 7 votes5y
@Filipe Pereira feel free to chime in on my question. Thanks
- Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes5y
A landlords best defense against all of this is to place tenants in a rental unit that have something to lose and to buy in an area where you have a chance to attract tenants like this. COVID or not, someone with nothing to lose doesn't care about a lease no matter how short or long it is.
- Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes5y
Originally posted by @Charles Scott:
@Kyle J. I am currently dealing with a tenant who has been living on a month to month lease since 2018 and is currently behind 3 months on rent, he has in fact filled out a housing assistance application and gave me the CDC moratorium affidavit. I gave him until December 1st to resolve the nonpayment issue but it was verbal, no formal notice. If he doesn’t have the payment on the 1st will I still be able to proceed with a formal eviction? And how quick is the process currently?
Hi Charles. Unfortunately, there's no way to answer your questions accurately because you don't list where you (or your property) are located. There are numerous state and local eviction moratoriums still in effect, and they all have different rules. And although the CDC order is a "federal" order, it actually only applies "in states (including the District of Columbia), localities, territories, or tribal areas that do not have in place a moratorium on residential evictions that provides the same or greater level of public-health protection than the CDC’s Order". So we don't even know if that order is applicable where you're at.
If it is though, it's only in effect a short while longer (through December 31, 2020). If it's not, and you have a state/local one (like I do), there may be protections for the tenant from evictions into 2021.
The good news is, most of these eviction moratoriums only protect against evictions for the non-payment of rent. You can still evict for other reasons (other than non-payment of rent). Consequently, since your tenant is on a month-to-month agreement, you may be able to circumvent them by just issuing a notice to terminate the MTM tenancy. Then, if the tenant fails to leave voluntarily, instead of evicting for non-payment of rent, evict them for being a holdover tenant.
You would still be able to go after them for the past due rent in small claims court after they're out, since none of the eviction moratoriums I've seen (including my state one and the federal CDC one) waive the tenant's obligation to pay rent. (They just restrict the landlord's ability to evict for the non-payment of it.)
Whatever you do, just do something. Don't let the tenant continue to stay in your property rent-free. And I'd assume the process won't be quick, so the sooner you start looking into it the better.
And as always, since we don't know where you're located, I'd suggest you consult a local landlord-tenant attorney to get competent legal advice specific to your local jurisdiction and circumstances.
Good luck and hope this situation works out for you.
- Real Estate Agent · Member since 2020 · 25 posts · 7 votes5y
@Kyle J. That’s an excellent idea Kyle, and to give you a better idea, I am located here in Las Vegas so I was not sure how the rules differed as this would be my first situation of this manner.
- Member since 2020 · 21 posts · 6 votes5y
Originally posted by @Filipe Pereira:
@Dana Williams it really doesn't matter WHAT you are evicting for right now. Whether it be for non payment, lapse of time, nuissance, etc. The issue isn't necessarily that the CDC has halted evictions or that there are moratoriums in place - it's that even when these moratoriums are lifted, there is going to be a heavy backlog of eviction cases.
I'd like to think that there is some protection in having a shorter term lease, but at the end of the day, you're going to be in the same eviction line as the guy with a 12 month lease, so be ready for that. You can evict for reasons not related to non payment of rent (as @Kyle J. said), but even those evictions are going to put you past most eviction moratoriums in place right now anyway.
We're proceeding as usual, and giving special attention to income vs debt ratios and how much a tenant has in savings.Great info. Thanks for chiming in.
- 5yCalvin OzanickBusiness MemberProperty Manager · Janesville, WI · Member since 2017 · 707 posts · 297 votes
We currently sign all new leases to month to month leases with the tenants. This has been a great help through COVID. As opposed to previously, we would not be able to evict for late rent, we can now just serve a 30 day notice to terminate the lease. If a tenant refuses to move out after that time frame ends, we are able to evict for failure to leave. Best of luck and let me know if it works out well for you going forward.
Wisconsin Property Managers4.7413 Reviews
Join the conversationCreate a free account to reply, vote on answers and follow this thread.