Landlords and tenants alike are in uncharted territory when it comes to dealing with a pandemic crisis. Unemployment is rising every day and many tenants and landlords are wondering how they will pay their bills in coming months. You may have read anecdotes in the media about tenants who are kicked to the curb by unscrupulous landlords or perhaps stories about landlords that are being taken advantage of by tenants who don’t want to pay rent even though they can. What is really going on?
To get a better understanding of where landlords stand, the American Apartment Owners Association (AAOA) put out a nationwide survey to its members and received 1,024 responses to four important questions, here are the findings.
Most Landlords Are Willing to Work with Tenants
Some cities and states have already enacted rent deferral or eviction moratoriums to help keep tenants affected by COVID-19 housed. As time goes on, we expect to see more legislation addressing this important issue. However, even if legislation has not been passed where their rental is located, many landlords understand they may need to work with tenants who are in need.
67% of landlords responded they would consider offering tenants a rent deferment if they need it.
Notably, the first day of the survey 66% responded yes, but the last day of the survey over 80% responded yes. It appears as time goes on, more landlords are willing to defer rent. You can see this trend below:
More Than Half of Tenants Are Unable to Pay Rent
With rent due just a week ago, many of AAOA’s landlords were confronted with the reality that many tenants are unable to pay April rent and this will likely continue for the next coming months. 54% of landlords said they had tenants tell them they are unable to pay rent April 1st because of coronavirus-related job or income loss.
This comes as no surprise considering 40% of American adults have less than $400 in emergency cash according to the Federal Reserve’s report on the economic well-being of U.S. households. It will be a challenge to collect rent with so many renters living paycheck to paycheck.
Most Landlords Do Not Feel Prepared If a Tenant Gets Infected
Although the CDC has issued clear guidelines to help stop spread of disease, containing the COVID-19 in a crowded apartment building can be complicated. In a recent coronavirus Q&A webinar hosted by AAOA, many members asked questions related to how to clean common areas, prepare a vacant unit, and keep unruly tenants from violating social distancing rules. Not surprisingly, 64% of landlords do not feel prepared if one of their tenants catches the coronavirus.
Attorney guest speaker Steven Friedman suggested providing a coronavirus notice to tenants, using local law enforcement, and keeping written records of exact cleaning procedures to reduce liability.
Landlords Are Most Concerned About Tenants Not Being Able to Pay Rent
Landlords are bracing themselves for nonpayment of rent and secondly, not being able to pay their own mortgages. These two related concerns ranked highest in the American Apartment Owners Association’s survey, followed by not being able to evict problematic tenants and the virus spreading. Although some landlords may be able to make ends meet to pay the mortgage, this isn’t something many can do long term. AAOA members have voiced concerns about not being able to collect back rent even after economic circumstances improve.
As we approach the second week of April, it is clear most landlords are eager to work with tenants on rent payments, especially if they can receive mortgage assistance. Landlord and tenant sentiment is expected to evolve as we approach the height of the coronavirus pandemic and we predict cooperation among both parties will increase. Although we cannot know how long the effects of COVID-19 will last, landlords are preparing. Staying informed regarding changes in eviction procedures, rent deferment legislation, and health recommendations is the best course of action.