As the COVID-19 continues to spread and impact our lives and work, the only certainty seems to be uncertainty. The one thing that is becoming increasingly clear is that the economic effect of the pandemic is likely to be significant.
Across Canada and the United States, property management firms are charting new waters in terms of remote working and reduced staffing, and stepping up cleaning routines to keep tenants safe. However, there is a brewing storm on the horizon: how to address tenants who are now out of a job and cannot pay their rent.
Tomorrow, April 1st, property managers and landlords face the possibility of many tenants not being able to make an on-time payment. To make matters worse, owners and landlords are still be on the hook for utilities, taxes and mortgage payments, even if mortgage payments may be temporarily deferred.
In Canada, several provinces, including Ontario and Quebec, are effectively banning any evictions resulting from non-payment of rent. Rental relief is expected to come in the form of general income replacement at the federal and provincial level. For example, Prime Minister Justin Trudeau has announced an aid package, the Emergency Care Benefit, that includes $27 billion in direct support to Canadians to help pay for things like food and rent. It provides up to $900 bi-weekly for up to 15 weeks for those who qualify. The Canada Child Benefit (CBB) is also getting a boost of$300 per child for the 2019-2020 year.
On March 25, BC announced $500 per month for three months as financial support for renters. Many provinces are floating the idea of a rent bank to help tenants bridge the gap. However, as of the writing of this article, the situation is still very fluid.
Likewise, in the US, the Department of Housing and Urban Development announced that it is suspending all evictions and foreclosures until the end of April.
While government and other organizations are working to find solutions, in this era of uncertainty, experts in the property management industry say the best option is for landlords and tenants to have an open dialogue to find a solution that works best for both parties.
Help Your Tenants
Your first priority should be to help your tenants find access to relief pay so that they can make rent. Many multifamily property firms as well as individual landlords are putting together lists of local and federal resources where tenants can apply for financial help, secure food and take advantage of any discounts and offers from utility and telecommunication companies as well as online retailers.
Tenants appreciate gestures of kindness during these unsettling times. Some property management firms are helping to support and bolster tenants by sending out much needed grocery gift cards.
Leniency amidst a backdrop of health and economic concerns is the right thing to do. Property managers may opt to postpone any rent increases for the next 90 days. We’ve heard that some landlords are considering applying any last month deposit towards rent. While unprecedented, these are unprecedented times.
Offer Payment Plans
In the US, National Multifamily Housing Council (NMHC) President Doug Bibby advised property firms to “create payment plans for residents who are unable to pay their rent because of the outbreak and waive late fees for those residents.”
Provide Multiple Payment Options
Tenant portals allow renters to choose online payment options like credit card payment or direct payment. It might be an option to let the tenant pay part of the rent through direct payment and put the remainder on their credit card.
At Property Vista, our web-based software can help your property teams streamline their workflow and enable tenants to pay online and request maintenance through a convenient portal. Check out our pricing and schedule a demo.