Non-Paying Tenant Due to Covid - What Options as a Landlord?

Non-Paying Tenant Due to Covid - What Options as a Landlord?

Rental Property Investor · UT · Member since 2014 · 127 posts · 68 votes

Hey Community - I have some questions and would love some guidance on what I can/cannot do as a landlord during the moratorium (in Salt Lake City). Feb 1st my tenant paid 2/3rd of the monthly rent and then sent us a text stating she had missed out on work due to covid and would like a reduced rent (she asked for a $650 reduction) for the next three months, then after that, she would resume paying and sign a new least when the current one expires the end of April. Neither of us mentioned the CARES/CDC moratorium in our brief conversation. However, I do know she is supposed to send me a signed declaration and has to go through a list of other qualifications in order to be protected, she has not done any of the required guidelines. I said I would be willing to work with her but had some questions and asked if she had applied for the rental assistance program, she said she would look into it. I asker her three days later what the status was and she said she would do it that day. I asked again the next day and now she has gone silent. Figured she would be all over that rent relief program as it's free money for her and I still get full rent.. win win. Regardless, I will be sending her a non-renewal letter as I won't be signing another lease with her.

What are my options here, I know that it's in my favor that the annual lease she signed is expiring soon, but can I serve her with a Pay or Vacate eviction notice right now since she hasn't provided me with any information that she's struggling other than a brief text message or does that break the moratorium guidelines? I am hoping she responds back to me this weekend, I would like to work out the situation rather than it get ugly.

Appreciate your guidance, I'm dealing with all of this while on a deployment in Iraq and have never had to deal with possible eviction issues, so thank you!

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Rental Property Investor · Cincinnati, OH · Member since 2019 · 59 posts · 77 votes
5y

@Dan Gustavson although I don’t live in Salt Lake, I can make some recommendations based on my personal experience with an eviction in Ohio (Cincinnati).

When is her lease up exactly?

You absolutely can post just as you normally would. You can even start the eviction process if you really want to now, but I would start with the notice.

As you said, the declaration only applies if she has gone through all of the steps and exhausted other efforts of payments. I highly recommend getting advice from an attorney. The best $126 reorientation I ever had.

If you are sending her a non-renewal, make sure you indicate that she must vacate and a holdover is not covered by the CDC Moratorium. Landlords have rights to take their property back after the lease is up.

I didn’t have a non-paying tenant but I did have a holdover and a successful eviction during the moratorium. I know the process and courts vary state by state, but it’s doable.

See this reply in the discussion

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    5y

    I would start by telling her where she can get help.  If she's only missed a bit of work this month and has been a good tenant, talk to her about a payment plan.  I wouldn't reduce her rent.  I would allow her to pay part of it and pay the missing 1/3 over the course of a few months to catch up.  

  • Rental Property Investor · UT · Member since 2014 · 127 posts · 68 votes
    5y

    Thanks Theresa - I was planning on working out a payment plan with her and letting her know that it will all come due at some point, but she hasn't been responsive.

  • Rental Property Investor · Cincinnati, OH · Member since 2019 · 59 posts · 77 votes
    5y

    @Dan Gustavson although I don’t live in Salt Lake, I can make some recommendations based on my personal experience with an eviction in Ohio (Cincinnati).

    When is her lease up exactly?

    You absolutely can post just as you normally would. You can even start the eviction process if you really want to now, but I would start with the notice.

    As you said, the declaration only applies if she has gone through all of the steps and exhausted other efforts of payments. I highly recommend getting advice from an attorney. The best $126 reorientation I ever had.

    If you are sending her a non-renewal, make sure you indicate that she must vacate and a holdover is not covered by the CDC Moratorium. Landlords have rights to take their property back after the lease is up.

    I didn’t have a non-paying tenant but I did have a holdover and a successful eviction during the moratorium. I know the process and courts vary state by state, but it’s doable.

  • Rental Property Investor · UT · Member since 2014 · 127 posts · 68 votes
    5y

    @Brianne - Her lease is up April 30th, so two months away. That's another issue I'm running into, if I don't renew her lease then I don't really have time to work out a payment plan before she would have to move out.. and that's if she is even willing to communicate. My wife and I came up with a plan to send a compassionate but stern text/email to her Monday saying we will work with her these last two months but the balance will be due by April, otherwise it will come out of her deposit. If she doesn't communicate Monday, she will find an eviction notice Tuesday. Great advice on mentioning the holdover issue, I will put that in the letter if it comes to that. Hoping she communicates and we don't have to go down that road, just want to be prepared if it does. Will also be calling our attorney Monday. 

    Thank you for sharing your experience! 

  • Investor · Virginia Beach, VA · Member since 2020 · 9 posts · 9 votes
    5y

    Dan, check the laws for your state. Normally you must send a Notice, no text or emails are valid in court.... Here is some info for Utah  -  https://www.utcourts.gov/howto... 

  • Investor · Virginia Beach, VA · Member since 2020 · 9 posts · 9 votes
    5y

    Also see  the top part of the link https://www.utcourts.gov/howto...

    COVID-19 Eviction Information

    The pandemic has led to changes to law the on evictions. Check back here for updates.

    Information for landlords

    There are two new changes to eviction law. The first is the Centers for Disease Control (CDC) partial moratorium (ban) on evictions. The second is a court administrative order.

    CDC Eviction Moratorium

    The CDC moratorium protects tenants until March 31, 2021. It only covers evictions for nonpayment of rent - other kinds of evictions (such as nuisance or a lease violation) are still allowed. The CDC moratorium was originally set to expire on December 31, 2020, but the protections were extended by Congress under the Consolidated Appropriations Act, 2021, and further extended by another order from the CDC.

    Protection under the moratorium is not automatic. Tenants must sign a declaration and give it to you. If you receive a signed declaration from your tenant, you cannot take any action to remove them for nonpayment of rent until April 1, 2021. Sample declarations are below:

    • English declaration - PDF
    • Declaración en español (Spanish declaration) - PDF

    The moratorium does not forgive rent. Late fees and penalties can still accrue during the moratorium. There is a Housing Assistance Program that lets you apply for rental assistance on behalf of your tenants. More information is available from the Utah Department of Workforce Services.

    Good luck

  • Rental Property Investor · UT · Member since 2014 · 127 posts · 68 votes
    5y

    @Rossi Rose - I did see the laws you mentioned while doing some investigative research yesterday, thank you for mentioning them. It does state that I can apply for the rental assistance on behalf of the tenant but that would require assistance from the tenant as the application asks for some personal financial information. We are planning to try to make contact again Monday, and if she doesn't cooperate, then we will send a pay or vacate notice.

    Thank you for your input!!

  • Investor · Virginia Beach, VA · Member since 2020 · 9 posts · 9 votes
    5y

    Sounds like a good plan. Yes, you are right -  Applying on the behalf of the tenant will require cooperation and this way will allow her to stay longer and still  not cooperate. I would send her pay or vacate notice, like you said.

    I am in Virginia and here is really bad - the notice is 14 days, mandatory payment plan for owners of 4 or more units, another 14 days after tenants not paying per the plan, it is really hard. 

    It was 5 days notice before COVID. 

    Good luck , 

    Rossi  

  • Rental Property Investor · UT · Member since 2014 · 127 posts · 68 votes
    5y

    Oh wow.. I'm so sorry it's so difficult in Virginia. Thank you for all the input and I wish you good luck as well, take care!

  • Broker · Logan, UT · Member since 2013 · 1k+ posts · 1k+ votes
    5y

    There's rent assistance in Utah.  Get your tenant signed up ASAP.

    https://rentrelief.utah.gov/

  • Rental Property Investor · UT · Member since 2014 · 127 posts · 68 votes
    5y

    @William - Yes, I've informed her that she needs to apply for the assistance but she has blown it off for over a week now and then stopped responding to us. I've read that I can facilitate this process, but it requires a lot of personal financial information that they will need to fill out on the application. I can only do so much without cooperation from her. 

  • Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    5y

    Oh, this must be tough dealing with all these issues from your deployment. 

    One approach is to offer her "cash" for keys, and the cash could be like she can leave right now and not pay the last month's rent but you will keep her deposit. 

    The rationale behind this is you won't suffer any more losses so that you can get an agent to help you place another tenant asap. 

  • Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
    5y

    There are landlords that have had non paying tenants for almost a year.  Non paying tenants are damaging to landlords.

    I am sympathetic to covid related tenant defaults and I work with them.  If they do not communicate you have to eventually remove them.   

    In the meantime, continue to try to communicate.  I have offered rent discounts if they work with me.  I have offered cash for keys for them to move.

    But if they won't communicate, they are becoming an adversary.  In this case, start the eviction process as soon as possible.  Which in many parts of the country is not for awhile....

  • Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    5y

    I've found that in most cases a pay or quit notice as the first step of an eviction process is magical for people finding money. I'd definitely post the property per your local/state laws and get the process started.

  • Rental Property Investor · UT · Member since 2014 · 127 posts · 68 votes
    5y

    @Brian Ploszay - I have worked up one last email that I will send her Monday morning, if she doesn't respond back same day, she will find a pay or vacate notice on her door. We told her we would work with her then she went silent on us, so strange to ask the landlord for help then ignore them. Thanks for the advice!

    @John Teachout - If it comes down to us serving her a notice, I hope it works that magic you speak of. Thank you, Sir!

  • Rental Property Investor · UT · Member since 2014 · 127 posts · 68 votes
    5y

    @Ola Dantis - Thank you for the advice Sir, I appreciate it. If it comes down to an eviction I will absolutely try cash for keys. I've heard all about it in all the BP books I've read and is a good option and less messy. I am sending her one last email to try to re-establish communication before I serve her with a notice, hoping for a response.

  • Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
    5y

    @Dan Gustavson    Make sure that you do everything by the books.  In my region, we have to give "5 day notices,"  in a legal format.   And deliver it in person.   A vacate notice on a door would not be considered a legal notice by the court.

  • Rental Property Investor · Concord, GA · Member since 2015 · 3k+ posts · 3k+ votes
    5y
    Originally posted by @Brian Ploszay:

    @Dan Gustavson    Make sure that you do everything by the books.  In my region, we have to give "5 day notices,"  in a legal format.   And deliver it in person.   A vacate notice on a door would not be considered a legal notice by the court.

     It would be unusual for a notice to require in person delivery. Even the court system uses tack and mail for property and court related situations. If a person always refused to answer the door, does that mean they can never be evicted? I'm betting there's another acceptable method. What's important is that it be delivered by an acceptable method per the local/state laws. If that's the way it is in Chicago, I wouldn't want to invest there.

  • Investor · Chicago, IL · Member since 2009 · 1k+ posts · 1k+ votes
    5y

    @John Teachout    That is indeed the way it is in Chicago.  If you can't deliver it in person, then you have to hire a "process server"  which doesn't call that much.  If he fails to deliver, then you can proceed to court.

    Luckily, I don't have many evictions.  Avoiding them is a big part of my business plan;  they are expensive.

    Anyway, my point in this thread was for him to understand the process for an eviction.  Even easier states have their required process.

  • Rental Property Investor · UT · Member since 2014 · 127 posts · 68 votes
    5y

    I have researched Utah laws for serving and it states anyone over the age of 18 can serve the tenant by certified mail, in person, or by posting it on the door if noone answers.

  • Rental Property Investor · UT · Member since 2014 · 127 posts · 68 votes
    5y

    Hey everyone - **update** After a stern but professional email that I sent to her she is now communicating and has applied for the rental assistance, we hope to have answers soon on the amount. Appreciate all of your guidance and input, love this community!

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