Rent Deduction & Forgiveness

[Amanda Schulman]

During this Pandemic is anyone helping tenants by rent forgiveness, or deductions to help all of those struggling? We have already removed all late fees  with the agreement that the tenant make partial payments until caught up. At this time we have given them until July to catch up. Another option we have been toying with is giving a one-time credit for the full amount of rent May. I’m certain this will shock some, but if you look at the enormous loss of life, along with the fact that the housing market is most likely to tank this strategy might just save us by taking a small loss at present. It cultivates a relationship with our clients that encourages them to pay and take pride in their dwellings because they can tangibly see that we are looking out for them during these hard times. We tested it with 2 tenants who were 2 months behind on rent and struggling to pay the late fees charged after they paid their rent. They were able to pay the $1,600 in rent in installments, but the $200 late fee charged after the late rent was removed. It took some convincing as they thought this might be some sort of trick, but it has greatly improved our relationship and they have explained to us how they were struggling to put food on the table. We were unaware that they had a newborn and all veteran Parent’s (and a proud Nana myself) understand the cost of diapers, formula needed for babies. They also have a 3 and 5 year old. Knowing that we were able to help with just 1 month has made the difference in their constant worries and saving us from the hundreds of evictions we would otherwise be faced with an ethical dilemma of doing. The other tenant has pledged to take a portion of his stimulus money once received to help other tenants who might need help. We are in essence building community and trust that will ultimately benefit us as a whole in the long run. We will be coming up with a firm plan next week to finalize these options, but helping our neighbors in these hard times is more important than profit any day.

[John D.]

Amanda, 

Your question presupposes that we all go back to work soon and this is just a bad couple of months - that is not supported by reality. If you give away your reserves now, what will you use when stimulus funds run out and tenants truly can't pay? If your properties go into default for lack of cash flow in August/Sept, have you really served your tenants' interests? 

All investors are pitching in to pay their tenant's rent, it's called the CARES act. Many of my tenants who make $15-$20 hourly have received several thousand per household, intended to help pay for rent and utilities. If they lost a job, they get unemployment plus added CARES money. 

If property owners (taxpayers) and higher earners are not paying for this, who is? 

Have you considered giving the same proposed money to a reputable non-profit to be distributed based on documented need? There are so many ways to build community and trust, unilaterally negotiating against yourself isn't the first choice that comes to mind. If you are handling other people's properties I believe you have posed the question to the wrong group.