COVID-19 Tenant Non-Payment Policy

I figured I'd share with you all my policy for my 125 or so tenants in case they lose their job due to COVID-19 related cuts. I have two letters that went out as part of this plan. If you want them I'm happy to share. Just reach out. Keep in mind I'm not a lawyer. Just doing this internally to go into April payments with a plan instead of hope and pray approach. We also have all but 2 tenants who pay regularly and almost everyone is a pretty honest hard working person so trying to keep as many as possible. Additionally my companies have solid cash reserves to float some tenants if needed. We also have enough cash to cover 100% of the tenants not paying for a few months, however I'm assuming it doesn't come to that based on this policy that my property manager will be doing. Only other disclosure up front is that my property manager is my own employee so I have a little bit more wiggle room on policies than those of you who have external PMs do, however I suggest you consult with them. The plan we have is based on a lot of studying podcasts, applying normal best practices we've developed, a lot of reading everyone on BP and other forums/groups, and lastly a lot of talking with other investors local in Pittsburgh and elsewhere. I'll likely also post this as a blog post since it's somewhat long.

Policy

Immediately indicate that we understand that these are difficult times and that we feel for them and their situation. Confirm that they received our prior communication with assistance services. Politely inform them that even if the government puts a stay on rent payments of evictions that we will still hold them accountable for unpaid rent and collect what is owed as soon as allowed.

1. Ask them for documentation to prove job loss and that they have applied for unemployment. If they provide this we will waive late fees, but will not provide immediate rent forgiveness.
2. Ask them who they may be able to borrow the money from. An immediate "no one" is not an acceptable answer. They will need to contact people and get back to us. Family, friends, whatever.
3. Ask them to verify and provide documentation that they have reached out to assistance programs. I am open to allowing them to get subsidized housing even though we do not current participate (ACHA "section 8") They should be doing this before asking us for forgiveness. If it comes to this we can discuss ways to verify that. At a minimum they should verify that they have applied for unemployment and section 8. Additionally ask if they are applying for any alternative jobs that may be available at the moment (grocery store, delivery driver, other potential jobs)
4. Send them our rent forgiveness letter. We will raise the rent prorated per month after giving forgiveness. So for instance if they just started a 12 month lease their rent is 1100 per month and we give forgiveness in full for one month. Their rent for the remaining 11 months will now be $1200 per month. Additionally we will indicate that based on their unemployment benefit and any additional assistance they must pay partial rent. They can not simply avoid any payment. My initial answer is that they will need to pay at least half. And anything we temporarily forgive will get prorated. Indicate to them that this is not a permanent solution and will be evaluated monthly. If they make no attempt to find employment or collect unemployment we will no longer provide assistance and will take action in the form of collections and eviction the earliest date we are available.
5. Their situation will be reviewed monthly. If they make no effort to help themselves through any assistance programs or locating alternative employment we will need to sadly take action.