The past year has been very difficult for American businesses. Due to lockdowns and social distancing restrictions, many businesses have seen greatly reduced income or had to shut down completely. All of this has had a trickle down effect on the rental industry. Widespread business losses have caused massive unemployment or underemployment. This has left many people with limited income to pay their rent and other expenses. Federal and local governments have placed limitations on how landlords can collect on past due rent and whether or not they can evict for non-payment. However, as a landlord and a business owner, you have responsibilities as well. So how can you strike a balance between being a compassionate landlord and keeping your own business afloat. Here are a few tips.
Understand Legal Limitations
Regulations and legal limits on rental collections and evictions are constantly changing. It’s important to know what your limits and responsibilities are before creating a plan of action. Last fall, the FDA issued the Temporary Halt in Residential Evictions to Prevent the Further Spread of COVID-19 order, which placed a moratorium on residential evictions. This order was originally set to expire the day after Christmas, 2020, but was extended on December 27 through the end of January. It could be extended again when the Biden administration takes office on January 20. In addition to this order at the federal level, there could be other state and local limitations that you should consider. Your attorney or accountant are great sources of information about your local regulations.
Even though there is an eviction moratorium, it doesn’t necessarily apply to all tenants. They still have to demonstrate that they are unable to pay and have been unable to obtain assistance to pay. They may also be required to make partial payments or demonstrate that they would become homeless or have to move into a communal living space like a shelter. It’s important that you maintain contact with your tenants to make sure they meet the requirements of the moratorium. If you are choosing to be flexible with your tenants outside those requirements, it’s even more important to stay in contact. Tenants need to be assured that you are concerned for their well-being, but also not lose sight of their responsibilities when their situation changes.
Taking Advantage of Government Aid
One way that tenants may be able to get caught up on their rent is from emergency government assistance. So far, the federal government has only issued two payments of $1,200 and $600 per person with additional amounts for children. Additionally, extra unemployment benefits have been extended with the new stimulus package passed at the end of December. While many Americans have found these payments to be lacking in what they need to make ends meet, they still should help them make good faith payments toward past due balances. There are also loans and grants available to help businesses cover expenses while income is low.
Work With A Reputable Collection Agency
“Collections” doesn’t have to be a bad word in these current circumstances. A professional collection agency like Southwest Recovery can help you navigate legal restrictions and regulations. We can also take over communication with your tenants and give you the free time you need to manage the other aspects of your business. Best of all, we treat your customers like you would, with the same respect and kindness that you would.
We’re ready to get to work on collecting your past due rent and putting your business back on the right track. Give us a call today to get started!