Investors of rental property are in the business of making money. Whether on a small scale, like a residential property, or larger scale, as is the case in commercial leasing, landlords depend on consistent monthly rent payments in order to not only profit, but to cover their own financial obligations, such as mortgages, taxes, insurance, etc. COVID-19 is the underlying reason behind many missed rent payments these days, and it is affecting landlords at all levels.
For landlords who are renting out an individual property (such as a single-family home, condo, townhouse or 4-unit building), non-payment of rent can be a difficult situation, as they often know their tenants on a more personal level. Additionally, a smaller, residential landlord may not have a large cash reserve to cover the bills in the event of even one month of missed rent. Here are a few suggestions for landlords that are trying to maintain a relationship with their tenant while determining what their legal options are.
- Unemployment is at an all-time high due to COVID-19 so your tenant may want to pay their rent but is simply unable to, due to a job loss. If it is at all possible to work with them on a temporary reduction in rent or other payment options, such as forgiving a month of rent now while adding it to the end of the lease, it could give your tenant the break they need to keep up future payments.
- Check with your own mortgage company to see if there are any options for the same type of payment assistance.
- Be aware that a federal order was issued by the Centers for Disease Control and Prevention (CDC) on September 4, 2020 to temporarily halt residential evictions through December 31, 2020 in order to prevent the further spread of COVID-19. This order does not release your tenant from their obligations of the lease and rental terms, but it may be difficult to evict them if they stop paying. Our attorneys can help you understand what your eviction rights are and if there are options, even with the order in place.
COVID-19 has wreaked havoc on the businesses of our country. Restaurants and bars have been forced to close or operate in a greatly limited capacity. Consumers are spending less money so demand for services and goods has been diminished. Businesses of all types and sizes are suffering, and these commercial tenants are losing their ability to pay their rent. Commercial landlords need reliable legal guidance now more than ever.
- Tenants may look to invoke a force majeure clause if it was included in their lease agreement, which could excuse their requirement to pay rent. Determining if the COVID-19 pandemic affords the legal right to do so is a complicated issue, and you will definitely need the assistance of a qualified attorney to defend your position.
- If your tenant is showing good faith efforts to attempt to make rent payments, it is best to try to accommodate them if you can. Negotiating new payment terms can help keep a good tenant in your space. However, always consult with an attorney to ensure the new documents protect your interests and are properly prepared.
- Opting to evict a tenant due to non-payment of rent can take much longer than in the past. Courts are extremely backed up right now so landlords should be prepared to expect extended delays in the process.
The legal team at Churchill, Quinn, Richtman & Hamilton, Ltd has decades of experience helping our business clients succeed through difficult challenges. Now more than ever, business owners need help navigating the new legal issues that COVID-19 has presented. For guidance in a landlord-tenant dispute, contact our office at 847-223-1500 to schedule your consultation.