Tenants not paying rent and applied for Covid Rental Assistance

[Cathy S.]

Not sure if anyone has any advice on this situation / is in a similar one.

I have inherited tenants and they were great about paying rent since I got my property. They paid on time for about 4 months. Then they told me on the first of this month that one of them was in between jobs for a bit during Covid, and so they wanted to apply to the Covid rental assistance program for the city of San Diego

Essentially this Covid rental assistance program provides 80% of the past due rent and directly deposits it to me if their application is approved and I sign off on it. I would have to sign and say I am willing to forfeit the remaining 20%. However the tenants said that if / when approved, they would cover the remaining amount.

I called the city and they said they’re super backed up - it’ll take them maybe 2-3 months to review the application. This whole situation seems a bit weird. I have no proof but I feel like they are trying to tap into the “free money” from the government. Their lease ended end of April and they resigned a 1 year lease for May. They also started this application in April (I got notified), so they had been planning this for at least 2 months.

What does everyone think I do about this? There’s actually nothing I can do until the city reviews the application. This could drag onto September.

Thanks for reading!

[Dan H.]

Due to the current county rules passed by the board of supervisors (No. 101724), I think you have few options:

• accept 80% rental assistance (and maybe get the extra 20% from the tenant)
• Hold out for full rent, but possibly/probably collect nothing.
  

What you cannot do at this time is evict the tenant for non payment.

I would accept the 80% rental assistance and hope the tenant makes good on their offer to pay the 20% shortage. If they choose not to, there is nothing you can legally do as you agreed to accept 80% as payment in full.

The people who make the rules that comprise the rental assistance do not understand how poor the cash flow is on most San Diego units. Most San Diego units do not have positive cash flow of 20% of the rent (they may have negative cash flow of 20% of the rent).  80% of rent results in many LL losing money on their rental.  

Good luck