The economic fallout from the coronavirus pandemic continues to hit Americans hard. According to a Pew Research Center survey in September, half of adults who said they were laid off because of the pandemic remain unemployed. With no job or reduced wages, many tenants struggle to pay rent. And when tenants stop paying rent, it leaves landlords in dire financial situations.
What can you do if a tenant stops paying rent because they lost their job due to coronavirus?
Check Government Programs
Landlords don’t qualify for the CARES Act, but may still get relief if they have a federally backed loan. The federal forbearance program only applies in certain states, though. Check if your city or state has a protection program for landlords, like these programs in New Jersey and Maryland. Some emergency COVID-19 programs, like the one in Massachusetts, provide rent assistance to tenants by paying landlords directly.
Be Compassionate, But Fair
If your tenants notify you that they can no longer pay rent, you should take the following steps first.
- Verify that they truly cannot pay rent. Some renters have lost their job and have zero income; others may have reduced income but can still afford their rent payments. To qualify for the federal government’s eviction ban, tenants must meet specific requirements and complete a declaration. You can ask for this verification, but only if local laws allow it.
- Communicate with your tenants and try to work out a reduced payment plan, according to your local laws. Partial rent is better than no rent, and tenants will be more willing to cooperate if they know you’re trying to be reasonable.
Remember that any actions you take are subject to local regulations. Some cities prevent you from requiring a tenant to sign a payment plan, for instance. Always check with relevant local agencies, authorities, and landlord associations to see what’s possible before you act.
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