Owners of apartment and condo buildings with rental units are facing a tough time. Tenants are also unable to pay rent and various cities and counties have entered orders preventing residential evictions. We have put together some tips for building owners looking to recover payments and get help. Here are 4 steps that these building owners can and should be taking:
1. Immediately call your mortgage company to see if you can negotiate a forbearance
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Note about forbearance: try to negotiate that they will amortize the amount of forbearance into the principal at the backend of the loan. Many banks will agree to forbear for 3 months and then require a balloon payment (this can cause a default for the borrower).
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2. Inform yourself as to potential loans:
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If you have sizeable payroll, try to apply for the PPP program as soon as possible.
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Continue watching news to see if EIDL program receives new appropriations and if so, apply immediately.
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3. If tenants are not paying, communicate with them.
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Find out why not paying & get them to send you reason in writing with some sort of verification.
- Work to set up payment plans with tenants, as long as allowed by your city or municipality.
- Encourage partial payments (better than no payments) .
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Make sure to put in writing that any deal reached is only temporary during COVID-19 crisis while residential evictions are frozen, and not a modification or waiver of rights under the lease.
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4. Make sure tenants are applying for unemployment insurance and rent assistance
(e.g. https://wsvn.com/news/local/city-of-miami-approves-rental-utility-assistance-program-for-residents/).
