How to Deal with Non-Paying Tenants During COVID-19

Hey gang. I wanted to give another update now that we have a better view of what happened with rent in April and we know where things stand with evictions. Here's a quick video on the topic, or you can read on for more information. 

According to the most recent numbers from the National Multifamily Housing Center, just under 70% of tenants paid their rent for the month of April. That is about a 12-13% decrease from March of this year and April of last year. What those numbers don’t detail is what portion of the rent the tenant paid, we don’t how many of those 70% paid in full.

Still, the reports I’m getting are that tenants are still largely paying their rent, which is very good news for everyone. That said, I am hearing from a number of you that some tenants have broken off communications and have not paid, leading you to ask what to do.

CURRENT STATUS ON EVICTIONS

If you’ve been following my previous posts, here’s where things stand with evictions.

• The Governor has suspended all evictions throughout the state until he lifts the state of emergency.
• The courts are closed until May 1 and will not accept eviction filings until June 1 at the earliest.
• The only exception to this is for emergency cases involving someone who is (1) engaging in dangerous criminal behavior or (2) is a serious threat to public safety. In such cases, the landlord must give proper notice and opportunity to cure or vacate, then apply for a waiver to evict if the tenant fails to do so. Click here to access the Waiver Form. The good news on this is that I have seen at least one of these granted by the Governor’s office.

WHAT TO DO WITH NON-PAYING TENANTS

If you have a tenant who is not working with you and has not paid the rent, my advice is to take whatever steps you believe will get them to pay something. June 1 is still a long time away, and you don’t want to wait that long without money.

Should I give a Notice to Pay or Vacate if the tenant failed to pay for April? I only suggest giving that notice now if you believe it will cause the tenant to pay something. It’s too early to worry about preserving your right to evict.

If you choose to go ahead and give the Notice to Pay or Vacate, I suggest that you give another such notice in May, even if the tenant doesn’t pay during April. Some court clerks have the idea that Notice to Pay or Vacate is not valid if it’s over 30 days old. I don’t believe that idea has any basis in the law, but it’s wisest to take that issue off the table by issuing a new Notice to Pay or Vacate in May with the idea of filing in June if the tenant doesn’t pay.

So, with a potential eviction still a long way off, the goal is to create as much rent revenue as possible. Reach out to your tenants, work with them as best you can using the methods I’ve discussed in prior updates. But if they refuse to pay, whether you send a Notice to Pay or Vacate right now depends on whether you think it will cause your tenant to pay or not. If you think it will, send the notice. If not, try something different to incentivize payment.

Either way, my advice is to send a new Notice to Pay or Vacate in May to preserve your ability to file an eviction in June.

Hope you’re enjoying these videos and staying well. It’s still too early to tell how this COVID-19 thing is going to play out, but the numbers are starting to look more optimistic.

As always, if you need help implementing these suggestions, reach out to your friendly neighborhood attorney. You can reach me at smarshall@tripleslaw.com or on my cell. Take care.