Raised rent 3 months ago starting May 10th

[Paul K.]

Hey BP community,

I raised rents by 6% on February 1st taking effect starting in May.   Now Corona has hit and one tenant says she can't pay and the other just paid the the old amount. 

Question is should I still enforce the new increase on both tenants, or since one can't even pay, should I delay the increase on both until the dust settles?

Thanks in advance.

Best,

Paul

[Chris B.]

You have a declared rate increase that was put in place before the virus was an issue.  You have every right to stick by the declared rate.  I give my tenants 2 -3 months notice also.  This provides them plenty of time to find a new place if they don't like it, but as I charge market or below rent, tenants haven't objected to me.

With that said, the virus has changed things somewhat.  The tenants are still obliged to pay and do owe you the current rent in full legally.  Some tenants may have lost jobs and can't afford any rent right now.  Others are playing games and refuse to pay because they for the moment can get away with it.  Because most states have an eviction moritorium, your options are restricted.  You can accept less rent and call it good if you like and accept the perminant loss.  You can accept less rent for the moment and create a repayment plan with tenants that is reasonable for everyone.  I think this is likely the best option.  You may be able to encourage them to pay a best effort now and collect the rest later.

Once the eviction moritorium is over, take a look at how each tenant worked with you / is working with you and decide who needs to go and enforce it.