Tips for Landlords During COVID-19 Pandemic

Tip for landlords during COVID-19 pandeminc

Just when I thought I had a better understanding of AB 1482 (the state wide rent control initiative) COVID-19 hit me from left field. I realize that we are all getting frustrated because we have so many unanswered questions. Please know this as a fact when it comes to COVID-19: this has never happened before in our life times. We are writing history and we may go down in the history books as the toilet paper bandits of 2020.

Remember as we all struggle with wrapping our heads around what’s happening in our world today that there are three things that we can do to help protect ourselves besides washing our hands and practicing social distancing.

We are no longer in control

We are no longer driving COVID-19,  we are just along for the ride so stop trying to figure all of this out because that is above all of our pay grades. Don’t make any promises.

Remain calm and do not speak in absolute terms

This way you can avoid giving wrong answers. A better choice of words would be “possibly”, “maybe”, “might”, “should” and “could”. Try to avoid terms such as definitely, absolutely, must and yes.

This will probably get worse before it gets better

You will hear a lot of things about a lot of changes and the way that the moratorium was written, it says that each municipality can come up with their own moratoriums. Simply said, the temporary state law says that each city can make their own temporary law regarding the repayment of rent because of COVID-19.

So that tells us that each city and/or county is going to come up with their own set of rules regarding repayment of the funds due for rent during a pandemic. What does this mean for us? It means each city is going to have their own rules and I have a feeling that if they make those rules too lenient, fair housing is going to step in and override them.

Currently in the city of Los Angeles, they are allowing 12 months to repay rents owed during the COVID-19 pandemic. I don’t foresee any other municipality will be as stringent. As cities come up with their moratoriums, we will slowly know exactly what we can and cannot do but until then, I suggest you wait until we get more information from the higher ups before making important decisions.

I wouldn’t serve a three day notice to pay rent or quit during these times but you should take direction from your legal counsel. What an attorney that’s going to represent you in a court of law say that you should or should not do during these times is very important. If you had someone you were in the process of evicting prior to the moratorium being issued, it should pick up right where it left off once they lift the moratorium. For those of you that want to evict on funds owed prior to the moratorium you should be able to do that once the moratorium is lifted too however I would speak to your legal counsel.

As far as how to run your business, I would conduct business as normal with a few changes:

  1. Stop doing tours. Limit this time to virtual tours to minimize your exposure and that of your employees. Not only from the illness but also from a liability standpoint. Who’s to say that they didn’t contract the disease by viewing your vacant unit and what do you have to protect yourself? If you’re cleaning it between tours, who is cleaning it?  Are they cleaning it properly? My question becomes; is it worth any of this exposure? My answer is “not a chance”.
  2. Charging late fees.  We should not charge any late fees during this pandemic. We shouldn’t charge them interest or any other fees or penalties when working out a payment plan with tenants during COVID-19 either. Landlords do not have to give their tenants discounted rent for not being able to use any amenities that were closed due to the temporary law. In other words, no rent credit is required to be given to the tenant because they can’t use the amenities in the common areas that have been closed due to the virus. I called fair housing myself to get the answer for that one.

Watch out for your city and/or county issuing their own moratoriums of what the rules will be regarding repayment of rent.

Promissory Notes

You should also consider that if you and your tenant are signing “promise to pays” or “promissory notes”, or however you’d like to call them, they are not a cause of action in eviction court. They can, however, help keep the landlord and the tenant calm knowing they have reached an arrangement. The landlord will recuperate his or her rent and the tenant gets peace of mind knowing he or she won’t get evicted.

Promissory notes are enforceable in small claims court so you could get a money judgment against your tenant. This, however, does not get you the writ of possession that you need from a court in order to get your rental unit back. Plus, if the tenant does not have a job, what good is a money judgment?

As far as maintenance requests and repairs go you should take care of those as business as usual, within reason to make sure that no one is exposed to a potentially dangerous situation.

Allowing Tenants to Break their Lease

If you have a tenant that has lost their job as a result of Covid-19 and they approach you, telling you they are moving out because they won’t be able to pay their rent, should you let them get out of their lease? Wait a minute. This tenant is being responsible, isn’t she? She’s moving out, avoiding forcing you having to go through the eviction process. Isn’t this the type of tenant we want around?

Maybe you should reconsider, chase after them and let them know that we are all in this together and you’d be willing to work with them. Isn’t that something to think about?

Please stay tuned as this evolves because we will have more updated information as it becomes available to us and remember this has never happened before. The higher ups are writing the rules as we all go. This is pretty much affecting everyone including our president who’s had to shut down his hotels. Try to be understanding as we all have a story to tell about COVID-19.

About the author

Patti “Widget” has more than 22 years of experience as a regional property manager.  Patti teaches a wide range of classes on property management topics and is a keynote speaker. She has published numerous articles for apartment associations and a repeat guest speaker at UCLA. She is currently the CEO of WidgetsWay, a property management consultant company.