Even though we are still in the midst of ongoing health crisis, it is probably fair to say that there are few, if any, types of business relationships left that have not been affected. One of those is the landlord and tenant relationship. While many renters were either furloughed, or lost their jobs altogether, a federal program was put in place that deferred landlords from pursuing rent payments for several months. However, that program has now come to an end, and all deferred payments are now due.
Landlords may now continue collection activity against tenants, demanding that any and all rent payments be immediately brought current. While renters should have expected this request and been prepared, the fact remains that many of them did not, or simply were not able to due to job loss. It is now up to the landlord as to how they choose to handle the situation, and how aggressively.
The best course of action would be to address these situations in a manner that will remain mutually beneficial to all parties. In other words, if financially feasible, the landlord may work out a payment plan for the tenant. This way, the property stays occupied, and rental income continues for the landlord. Leases can be modified to extend the terms in order to add past due rents to the back end, or ongoing rent can be increased to spread the past due amounts out over the remaining lease term. However, landlords have taken a huge financial hit during these times as well, and some may simply not be able to work with tenants in this manner. This sets the stage for aggressive collection activity and possible litigation.
Clearly, not all tenants are going to be compliant in bringing rents current. Some may refuse to pay altogether. Since we are in such unprecedented times, there is not “status quo” for landlords to follow. The best advice for landlords who are navigating new territory is to consult with an attorney who can help you understand your rights, as well as assist you in making the most beneficial decision in handling past due rents.