As most residential investment property owners know, it is typically much easier to keep your current tenant(s) in place than it is to go out and find new ones. So, if your renters have been impacted by the COVID-19 crisis, it is possible that they may have trouble with their rent payments going forward. In many cases, though, tenants still want to make good on their housing expenses – even if they’ve been hit with a drastic change in income. So, by working out rent payment plans between a landlord and a tenant, it could be a win-win for both.
With the passage of the CARES (Coronavirus Aid, Relief, and Economic Security) Act in late March (2020), a temporary moratorium on evictions – as well as on late fees and penalties related to the non-payment of rent – went into effect for the 120-day period from March 27, 2020, to July 25, 2020.1
For instance, tenants can attain at least some amount of financial relief (as well as keeping their credit score in better standing), and the property owner can ensure that they will continue to receive some amount of incoming cash flow.
Although the CARES Act does not require that landlords work out payment plans with tenants, doing so may become much more common going forward – and they have even been encouraged by the National Multifamily Housing Council.
The Payment Plan
Before moving forward with a payment plan with tenants, however, the agreement should be documented and signed by your renter(s). The National Apartment Association (NAA) has provided a Payment Plan Agreement (per the COVID-19 Pandemic) template on its website at: https://www.naahq.org/sites/default/files/naa-documents/final_-_naa_payment_plan_agreement.pdf.
Contacting and working with tenants regarding a rent payment plan – as well as other tenant-related issues – can be somewhat cumbersome in terms of your time. If that is the case with you, hiring a property management team could be a viable solution.
If you own residential rental property in Orlando and / or the surrounding Central Florida area and you’d like more details on how working with a property manager could be beneficial, Contact Us and we’ll answer any of the questions that you may have.