We are now about four weeks into the COVID-19 crisis here in New Jersey and across the country. I hope you’re all healthy and safe.
Today, we’re talking about how landlords are collecting rent from tenants. It’s important to balance the ability of landlords to collect rent with the sensitivity we need to show to tenants who are having trouble keeping up with those rental payments because of unemployment issues and other financial problems that are related to this crisis.
Eviction Moratorium and Rent Collection
A few weeks ago, Governor Murphy signed Executive Order 106, which restricts the ability of landlords to remove their tenants from a property for not paying rent. It does not restrict people from filing evictions. So, there’s some interplay between that eviction restriction and how you can still collect rent.
We represent a number of property management companies, and this crisis has caused us to change our collection methods a bit. We’re using a softer tone when we ask tenants why rent hasn’t been paid. Even before this pandemic, many of our property management clients had what we call frequent fliers – people who wouldn’t pay rent and needed to be chased down every month.
For a lot of clients, the collection rate hasn’t changed too much. It’s about the same now as it was before the pandemic started. That may change with the May rents, however.
Revised Pay or Quit Letter
The letter we’re now sending to tenants notifies the residents that they haven’t paid rent. It says that if the tenant cannot pay it, they need to call their property manager to discuss their specific situation in more detail.
In this letter, we also include some of the resources available to tenants who may be struggling. This is the revised Pay or Quit letter. Pay or Quit letters go out on a regular basis when rents aren’t paid after between five and eight days, depending on the property management company we’re working with.
Even under normal circumstances, when we’re filing evictions and going to court, we always try to come up with a Consent Order to Pay with the delinquent tenants. That’s far more favorable to landlords who want to keep a tenant in place and not start all over to find new tenants.
Our goal is still the same: to work with residents to get the rent paid.
Filing for Evictions After May
Governor Murphy’s Executive Order does not allow evictions for 60 days, but it does not prevent filing for those evictions.
We are suggesting to our landlord and investor clients that they do file for eviction after the May rent is due and not paid. We’ll see what’s happening from that point forward. If you get your filing in place, at least you’re waiting in line for the courts to reopen and the process to start.
Even during this long period of time, we recommend you do everything you can to work out a deal with your tenants. You’re practicing better customer relations when you try and work something out. Avoiding eviction is better for you and your landlords. We have a long way to go, and we need to work together. Be practical.
Our overall picture is this: be sympathetic to your tenants while keeping in mind that your landlords have to pay their mortgages, too. We’re all going to get through this together. Be healthy and hang in there.
If you have any questions about the challenges your New Jersey property management company may be facing during this crisis, please contact us at Robert A. Gleaner, P.C. We help with all real estate legal issues, including lease agreements, evictions, and habitability issues.