Tenants not paying or responding. Can’t evict. Time to sell?

Question

As we March forward(or should I say “left?) into insanity me as a small time landlord, 5 doors, is getting absolutely killed. 2/5 of my tenants aren’t paying or even attempting to communicate anymore because they KNOW I have zero recourse. The eviction moratorium is going to extend through Jan31 and I’d be shocked if it doesn’t continue to get pushed out. What the hell are we supposed to do? Is there any financial support out there for landlords/rent assistance that I have missed? Seriously considering throwing in the towel and selling while the market is still magically high. After these unconstitutional government overreaches I have zero doubt they will happen again anytime there is a new “crisis.” The writing is on the wall-we’ve gone mad.

Nathan Gesner · Answer

Have you tried just telling them to leave? You can't evict them through the court but some people will just leave if you tell them to. I would let them know you are unable to pay the mortgage without them paying rent and are at risk of losing the property. If they stay, you intend to take them to court for all the back rent. If they leave now, you can keep the deposit and forgive the rest. It's worth a shot.

Mark Plesha · Answer

Hi Kyle, I just received an email from NAR(National Association of Realtors) stating that Congress just passed another COVID Relief Package and included the below info:

-Provides $25 billion to the states through Sept. 30, 2022, for rental assistance and allows landlords to apply for funds on behalf of tenants

• Includes payments for rent in arrears as well as utilities and other expenses related to housing
• Extends federal eviction ban through the end of January

It is somewhat vague info, but something to look into in terms of applying on behalf of your tenants.

What town are the properties located in?

Joe Splitrock · Answer

This is a step in the right direction, but odds are good the money will go fast. They may end up limiting payments based on response, like they did for PPP. In other words a landlord may apply for $8000 and get $2000. Something sounds better than nothing, but it may come with strings attached that limit eviction.

Still I agree, see what this is all about before throwing in the towel.

Chad Hale · Answer

@Kyle Galloway If they are no longer communicating, you could try serving a notice of abandonment. Check with your eviction attorney about pros/cons and possibility of doing this.

Michelle Fenn · Answer

If you are only being impacted by the national CDC eviction moratorium you can post a 3 day notice and file, the tenants are required to send the landlord affidavit that they are affected by covid and attempting to pay rent. Since most courts are not hearing eviction cases the only benefit of posting the notice is to get their attention. We have had some success just by posting the notice and then calling tenants with arrears.

If you are unsure they are even occupying the property post a 24 hour notice for HVAC repairs. Bring a funace filter, this will give you an opportunity to check on the property and maybe even speak with the tenants.

Amy D. · Answer

@Kyle Galloway talk to your bank. Can you refi? Rates are low.

Perhaps sell one, (biggest headache, largest debt service, most profit margin) whatever makes sense for you. Use those profits to bolster reserves or bring your investments back to a comfortable level.

Tracy Streich · Answer

@Nathan G. has great advice. Offer cash, highly encourage to leave, help them find something else. Hard to sell a home with a non paying tenant.

Greg Scott · Answer

Kyle:

Are your properties in Indiana? If so, you have been getting bad advice.

While we always work with good people who are just struggling, we have had no problem evicting blatant non-payers the past few months. The only exception has been that we could not schedule court dates for December. We have 5 more eviction proceedings scheduled for the first week of January.

Now, if your properties are in Illinois, you may be screwed.

Good luck out there.

Tenants not paying or responding. Can’t evict. Time to sell?

Tenants not paying or responding. Can’t evict. Time to sell?

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