The current moment is a strange and dismaying one for people in all kinds of businesses – perhaps more accurately, it’s a strange time to be alive. In the past five months, the rapid spread of COVID-19 has accounted for hundreds of thousands of deaths and changed the way we go about our daily lives. Closures and cancellations of public events have put normalcy on pause indefinitely, and confusion abounds about how best to proceed.
Of course, things won’t stay this way forever, but in the meantime, let’s discuss what property managers can expect during the remainder of this time and advocate for the best ways they can respond.
What to Expect
From an internal standpoint, if you haven’t already, it’s crucial to take this pandemic seriously. Property management has remained designated an essential service by the City of Los Angeles, allowing our company to remain in business during the crisis. But I’ve encouraged all employees who live with somebody vulnerable to the virus to work from home indefinitely, and I have implemented a rotation to keep our in-office staff to a skeleton crew, with fewer than 10 team members per floor at all times and the rest working remotely.
Technologies like Zoom, Slack and Google Voice have allowed teams to uphold their standard of service to clients, and managers should make sure to maintain an open line of communication in order to let them know that the virus won’t keep you from honoring your duty.
Maintenance: Limit your maintenance team to emergency orders — this means no fixing blinds or squeaky cabinets at apartment complexes to limit unnecessary social contact — but continue to turn vacancies and carry out repairs that make units as safe a place as possible for tenants to ride out this trying time. Staying updated on CDC safety recommendations ca save lives, so study those.
Evictions: If the eviction moratorium has been extended, this measure will no doubt provide necessary protection to those whose livelihoods have disappeared in the mass shutdowns, precluding them from affording rent. However, it also opens the door for tenants whose income hasn’t changed to act in bad faith and neglect their rent simply because they can without immediate consequence. Property managers need to prepare for this and take what measures they can to deter it.
How to Respond to Unpaid Rent
Develop a plan and share it. I recommend implementing a repayment plan for tenants who can’t pay full rent on time because of lost income due to the pandemic. Since developing and tracking a custom plan for each tenant on a case-by-case basis simply isn’t feasible, it’s best to craft a plan with two or three options that can apply to your entire tenant base.
It’s perfectly legal to ask tenants who cease paying rent to provide some form of documentation of the fact that their payment stoppage is a result of the pandemic. This may come as an email from an employer informing them of decreased hours, or a formal announcement of closure. It’s likely that many of your tenants will gladly provide proof. You can also ask for documentation that they’ve applied for unemployment insurance, and a current bank statement is fair play as well. They likely had to include one to apply for their lease, so it’s not farfetched to ask for one now. They may of course refuse, but there’s no harm in asking.
Similarly, in reviewing new tenant applications, property managers should seek out proof of payment from the tenant to their current landlord for the last month’s rent. Sometimes, a ringing endorsement from their current landlord isn’t quite what it seems — as I’ve touched on before, I’ve seen landlords recommend tenants simply because they want to get rid of them. If an applicant applying to occupy one of your units can’t show that they’ve paid rent in recent months, it’s possible that they’ve neglected it in bad faith and have chosen to move now in order to avoid the consequences in the long term.
Most of all, I advocate that all people uncertain of how to weather these unprecedented times stay calm since worry for worry’s sake doesn’t help anybody — and remember not to let the state of things diminish our humanity toward one another. I encourage property managers to do everything in your power to continue serving clients and collecting rents without assuming the worst about tenants. And accordingly, I encourage tenants to understand that their rent is what allows property managers to maintain the quality of their environment. If we all do our part, we can ease the strain of this difficult time and come out of it improved.
David Crown is the C.E.O. of Los Angeles Property Management Group, and has over twenty-five years of experience managing all types of income properties. A hands-on leader who has managed properties in 16 states, Mr. Crown has been asked to serve as an expert witness in property management matters, and currently serves on the Forbes Real Estate Council. He can be reached directly at 323-433-5254.