Crazy and unknown times are still prevailing. Because of the moratorium ordered by the Center for Disease Control (strange I know) I have had a client halt his search for an investment property, a flip that was supposed to be a rental is now being listed for sale and another couple is still looking for their duplex although not as aggressively. In today's post I am only going to offer facts and not my opinion on the order. We can chat opinions offline. I will, however, offer this opinion-do not be afraid to own or buy rental property because of the moratorium. It comes with a lot of fine print and the courts are still hearing evictions. For your tenant not to be evicted these are the key points your tenant must prove to the court of law (and you):
1. Tenant must have sought government and agency assistance to help pay rent.
2. Tenant does not earn more than $99,000 or double for a couple.
3. Tenant must be making effort to make the most payment they can make.
4. Tenant must prove they cannot pay rent due to loss of job due to Covid or medical bills due to Covid.
5. If the tenant must leave your property, he/she must prove they would be homeless or would be moving into close, shared living quarters.
6. Tenant understands rent must be paid and this is not forgiveness. Most landlords will file judgement on tenant for money owed.
7. Tenant understands on December 31 all rent is due in full, including late fees or landlord can evict you.
8. If tenant lies on any of these points, they are subject to perjury charges.
9. If tenant certifies these points are true, they must fill out and sign a declaration and provide to the landlord.
This is the moratorium in a nutshell. It was created by the CDC to keep folks out of shelters and out of large group living situations. Currently there are many landlords throughout the country suing the government over this order. As landlords we have many responsibilities. Please do not think you can buy rental property and simply collect your cash every month and not think about the people who are living in your home. Well I guess you can think this way if you choose but there is such a thing as karma, and it catches up (trust me I have seen it in the investment world and it is not pretty). We must put people first and then money. As I discussed in another post, talk to your tenants and build a relationship and offer options when things are tough (credit cards are a good one, options for rental assistance, payment plans). You do not have to be best friends or Facebook buddies, but you should have some sort of relationship. This, of course, is my opinion and what has worked best for me.
If I can ever do anything for you, please reach out. I love talking all things investment real estate, tenant successes and failures, and everything in between.