Since it appeared on a global scene, COVID-19 has disrupted several spheres of human interaction, including the world of real estate. Many people lost their jobs during the pandemic, leaving a wake of disputes between landlords with their bills and tenants who lost their income during the lockdown.
Typically, landlords can evict tenants that fail to comply with their rent, but property owners need to take navigating COVID policies into consideration while in the middle of a pandemic. So if you’re wondering what to do when your residents can’t pay their rent due to the COVID-19 crisis, keep reading.
1. Get familiar with the COVID landlord-tenant laws in your state
Taking time out to research and understand the new laws and policies that govern landlord-tenant relationships in your state will undoubtedly be worth your while. While the Temporary Halt on Residential Evictions issued by the CDC protects most people, not every renter meets the set requirements and could be eligible for removal.
Moreso, being unaware of the laws protecting your tenants means you run the risk of violating them and could be facing a civil lawsuit. These laws and policies set in place aren’t one size fits all either. Variations exist between states and counties, so it’s essential to adhere to and comply with the ones applicable to your jurisdiction.
2. Negotiate a new payment structure
As frustrating as a late payment can be, it’s essential to be understanding under these turbulent circumstances. Remember that your tenants are dealing with shortcomings on their end, which affect their ability to pay on time. If you can, reach out to them to understand their circumstances better and review if there are compromises you can both afford to make concerning your payment structure.
A new plan could include reducing the rent, providing an extension, adding more installations, or forgiving the rent altogether. Negotiating won’t be easy, and it might take a while, but it’s possible to arrive at a solution that makes both parties happy.
3. Encourage your tenants to apply for rent relief programs
Creating a new and flexible payment structure with your renter can be a considerate and effective move, but it isn’t always possible. Sometimes, despite your tenants’ best efforts, they’re unable to come up with anything substantial towards their rent. Well, it’s not out of place to assist them in applying for rent relief programs. There are aids at both the federal and state level that cater to people in your scenario. So, encouraging and even helping your tenants’ research programs they’re eligible for could benefit you in the long run.
4. Refinance your mortgage
Refinancing your mortgage is another step you can take to lower your expenses. Many people are making concessions due to the pandemic, and that might include your mortgage lender. Depending on your total income to debt ratio, your lender might be willing to offer you an extension, defer payments or cancel your late fees.
As stated before, knowing COVID landlord-tenants laws that relate in your state could come in handy, and that applies to policies that make provisions for property owners in need. Certain insurance companies offer protection from foreclosure for their clients, and you could be one of them. It’s undoubtedly worth looking into, especially if your finances aren’t promising and the previous steps aren’t forthcoming.
5. Take advantage of tax breaks and deductions
Other than your lender and insurance policy, property owners have other provisions to catch a break in the middle of this crisis. Calculating your taxes can be dull, but consider researching what deductions and property breaks you qualify for.
One or two classes could offer you the much-needed break. You could even consider hiring a tax professional to help you review your documents more carefully and find the best deals. At the same time, you might be on the lookout for options that reduce or cancel your fees completely, remember that not all of them will come in the form of cash. They could also be extensions on your deadlines, which could give you a couple extra weeks or months to sort your finances and gather more funds.
6. Consult an expert
As a landlord, there’s no denying you have a couple of options when your tenants default on their rent. But we also have to admit that navigating these new policies can be tricky, and not everyone is ready or able to take on that extra work. So rather than trying to figure it out on your own, you can recruit the external aid of an expert local property manager.
Not only will you save yourself a ton of stress, but you’ll also avoid making mistakes that could lead to a civil lawsuit or payment of some steep fines. And, of course, they’ll help you find an amicable solution to your rent problem.
COVID-19 did quite a number on everyone and looking out for your interest while remaining understanding is critical in coursing through these difficult times. The best way to protect yourself is by getting educated about the new laws and policies that apply in your state. Also, finding programs that offer your tenants and property owners assistance can work well to bring you some much-needed income or breaks. Finally, don’t be afraid to seek out local experts to offer insight into how the rental industry works in a pandemic.