Challenging Times for Rental Property Owners
We understand that stress and pressure on you as the property owner can come from two main areas. Firstly, you rely on the rent as income for your mortgage payment, insurance, repairs, and other commitments. When that income is suddenly taken away, your bills can begin to back up. You risk your reputation and your credit being impacted.
Secondly, collections can be uncomfortable for most people. As with anyone, you think of yourself as a compassionate person. Your tenant is in a difficult situation with their income suddenly reduced or even eliminated. If the tenant has been in the property for a while or you have built a good relationship with them, being the collector can be difficult and uncomfortable for you.
Tips For Collecting Rent During COVID-19
1. KNOW YOUR LEASE
The most important thing is to know your lease. Most people do not take the time to read it. Be sure to read the entire document to understand what leverage you really have in collecting rent. If you are having trouble understanding the terms in your lease or you do not have a written lease with your tenant, feel free to call us anytime. We are always happy to provide advice.
2. KEEP UP WITH GOVERNMENT UPDATES AND GUIDANCE
Even if you have a strong lease agreement, the State of NJ may supersede it. Things are changing from week to week. On March 18, NJ Courts were closed for all in-person events, including eviction cases. On March 19, Governor Murphy signed Bill A-3859 into law putting a moratorium on removing a tenant from a property as a result of an eviction. On March 28, the Governor asked landlords to show more compassion to struggling tenants. Then on April 4, the Governor put new restrictions on short term rentals. On April 25, the governor announced tenants can use a security deposit toward rent. Check these sites for the latest information.
3. COMMUNICATE WITH YOUR TENANT
When I was making collection calls years ago for a credit card company, I could see the customer’s entire credit report. Most times they had multiple credit cards and loans. The customer had some money but not enough to pay all their loans. Housing is very important to people. By keeping communications open with your tenant, you are more likely to get payment before the tenant pays other bills. Remember too, that a partial payment is better than no payment at all. Be flexible. Create a payment plan to show you are willing to help them through this. Show compassion but be firm. Get the tenant to commit to further steps for both payments and communication. For example, “Okay, so you can pay half of last month’s rent next Friday and you will call me on Monday to make further arrangements? Is the right?” Ask questions about their income status like, “Have you filed for unemployment? When will your employer follow up with you on work? Have you received your stimulus check?”
4. PREPARE TO FILE EVICTION
Unfortunately, you will need to consider an eviction as a last resort. This is a big step. If you can evict your tenant, you will have to do the work of finding a new tenant. That includes showing the property and screening a new tenant properly. At this writing, the courts are still closed, and you cannot evict a tenant. At some point that will change. Filing an eviction can be a complex process if you have never done it. You don’t want to go through the work of getting a court date only to have the judge say the tenant can stay because you don’t have the correct documents or evidence. If you are successful and you get your property back, you may still want to get the funds owed to you. This will require you to file a judgment. Sureway has significant experience in these areas. Even prior to the COVID19 issue, Sureway regularly processed evictions and judgements each month. Please let us know if you need help with an eviction or judgement.
It is unclear how long this health crisis will go on or how long your tenant will struggle to pay rent on time. Sureway is here to help. We can work with your tenant directly and reduce the stress for you.