Are you wondering if your tenants are required to pay May rent amid COVID-19? The short answer is yes, but the answer is more complicated. As of now, the “no eviction” policy will end at the end of April. However, an extension is likely, as much of the country is still on lockdown. This will depend on the peak of the illness and when it begins to start trending downward. We will likely see the eviction stay lifted when the President declares the economy back open.
Are you worried about your Philadelphia tenants paying May rent during COVID-19?
If the eviction moratorium continues into May, your tenants will still be required to pay rent, but landlords still won’t be permitted to evict. Most tenants understand the current legislation and realize this isn’t a get out of jail free card and will try their best to keep up with rent payments. However, some tenants fail to understand the consequences of failure to pay rent. While landlords can’t evict now, the moratorium won’t last forever, and landlords will eventually need to get paid!
Tips for Rent Collection During the Pandemic
Although eviction is illegal at the moment, it certainly does not mean all tenants are exempt from paying rent. It’s imperative to remind tenants that if they can pay rent, they need to! If they can’t pay rent due to loss of work or reduced hours, then the next best option for them is to look into the available resources. Be aware of each individual’s situation and make adjustments accordingly.
CARES Act: Under the CARES Act, individuals who would generally not qualify for unemployment, such as contractors and self-employed professionals, may now be deemed qualified. To receive assistance under the CARES Act, tenants will need to prove that the crisis impacts their income. There are several Unemployment Insurance programs available through the Act. Individuals claiming insurance benefits are eligible to receive an extra $600 per week during the crisis. The actual amount received depends on the individual’s income for 18 months before filing an unemployment claim.
Sharing this information with tenants will show that you care, as well as help them understand how to pay rent during the crisis. In addition to the tenants, if you are a self-employed landlord and losing income due to the COVID situation, you may qualify to receive this assistance as well. We understand tenants are not the only ones struggling right now, but landlords as well.
Stimulus Check: The stimulus check grants up to $1200 for single individuals and up to $2400 for married couples. There are income restrictions to keep in mind regarding who will and will not receive a check. The purpose of the stimulus check is to help Americans to stay on top of bills and rent during the crisis. Of course, you can’t force a tenant to use these funds for rent, but you can send information to them regarding checks, who gets them, and when they will get them. It may be a way to spread helpful information while reminding them that they are still rent-responsible.
Should Landlords Offer Discounts for May Rent Amid COVID-19?
Discounting or waiving rent is genuinely up to the discretion of the property owner. Every landlord is in a different situation financially. Many landlords rely on the rent to pay the mortgage on their rental property. If the pandemic continues into May like many sources say it will, then chances are rent payments will become increasingly difficult for tenants. We don’t recommend forgoing rent for the entire month for every individual. However, we do recommend looking at every situation and making decisions based on the particular tenant’s circumstances if they reach out to you.
Reasons to Consider Rent Discounts or Concessions:
- A tenant is unemployed due to COVID-19
- A tenant has had hours severely cut due to the pandemic
- The stimulus check and any other benefits they applied are delayed. Keep in mind the unemployment sites have never seen such volume, and it is resulting in crashed servers and delayed approval processes. Therefore, even though resources are available, they might not be immediately available.
What Assistance Options Should I Consider for My Tenants?
Each situation mentioned above should be taken into consideration if possible. However, depending on the circumstances, assistance may be provided. As we discussed previously, id should only be considered for those who can prove hardship. Otherwise, you may be fielding requests from all of your tenants, and this will harm your income, which directly impacts the maintenance and care for properties.
- Payment Plans: Consider adding part of the cost from the month or months missed rent to the rest of the lease. You would essentially split up the spread out the missed payments and tack it on later. For example, if the rent is $1000 a month and the tenant is requesting a payment plan, you could divide the $1000 by four and allow them to pay $250 during the last four months of the lease. No matter the arrangement, be sure to get it into a signed legally-binding contract to ensure it gets paid back.
- Rent Discounts: Come up with a fair discount that helps them, but doesn’t leave you high and dry, then make up a payment plan for any additional costs they can’t cover.
- Waived Rent: In severe cases, you could forgo one month of rent altogether. Waiving rent is the last resort and not an option for many landlords. Only consider this option if it fits within your budget and doesn’t harm your finances or ability to maintain your property.
COVID-19 Update in Philadelphia:
The following information was taken from PA.gov as of April 29th:
- Confirmed COVID-19 Cases in PA: 35,684
- COVID-19 Related Deaths in PA: 1,716
- Confirmed COVID-19 Cases in Philadelphia: 11,361
- COVID-19 Deaths in Philadelphia: 274
These numbers will continue to grow until we are able to flatten the curve and reduce the spread of COVID-19. Researchers don’t believe the United States has hit its peak yet. The state of Pennsylvania is still under a stay-at-home order and is requesting that residents follow social distancing procedures until further notice.
Social distancing means staying home unless you must leave for an essential reason, and when you do, leave keep at least six feet of distance between yourself and others. Stay home, wash your hands often, and contact a healthcare provider if you’re exhibiting symptoms. Finally, it is crucial to self-quarantine after having symptoms of the virus for at least 14 days. Researchers and medical professionals agree that following these procedures is the only way to stop the infection from spreading.
Bay Property Management Group Philadelphia continues to monitor the situation with COVID-19. If you are a Philadelphia landlord needing assistance during the pandemic, we can help! Our experienced property managers can guide you through rent collection during COVID-19 and keep you informed of your options.