Helping Tenants Weather New COVID-19 Restrictions

November 18, 2020

For months, landlords and property managers have been dealing with the fallout of an extended federal eviction moratorium, which doesn’t include a rental assistance program that could keep them solvent in the interim. Now that many states are moving toward more aggressive coronavirus restrictions, including the possibility of reinstituting lockdowns, commercial and residential tenants are facing a new round of economic hardship. But property managers can help them weather the storm using lessons learned in the early days of the pandemic.

At a session Tuesday called “How COVID-19 Has Affected Rent Abatement/Evictions” during the virtual 2020 REALTORS® Conference & Expo, property managers discussed actions they’ve taken to prop up their business and help tenants dealing with financial setback due to the virus.

“The lawmakers who put this eviction moratorium in place—their intentions were probably good,” said Barry Blanton, CPM, founding principal of Blanton Turner, a real estate management and consulting firm in Seattle. “But what they failed to realize was where that impact was going to land. They have to understand that rent payments cover more than the [landlord’s] mortgage. They cover jobs, property taxes, and building maintenance projects, too.”

In order to ensure tenants have the best chance of repaying missed rental payments, property managers need to counsel them through their financial setbacks, said Mindy Gronbeck, CPM, director of property management at Boise, Idaho-based Hawkins Companies. Gronbeck’s company works primarily with commercial tenants, such as retailers and restaurants, and she helped many of them navigate the process of applying for Payment Protection Program loans when they were forced to close earlier this year.

But she intentionally avoided offering extended rental deferment plans to tenants who asked for long-term financial relief. “We’re not going to make commitments six months or a year down the road when we don’t know how long this is going to last,” Gronbeck said. “We just keep saying, ‘We’ll continue to work with you.’”

She added that landlords and property managers should be flexible with lease terms to help commercial tenants continue to do business while abiding by state coronavirus restrictions. “A lot of our leases don’t allow designated parking spots,” she said. But her company was able to add addendums to certain leases, allowing restaurants to add outdoor seating in parking lots and designate spots for curbside pick-up customers.

Blanton, who works mostly with residential tenants, said open communication is of utmost importance when helping renters through hardship. “We approached this first with empathy and compassion,” he said. “We wanted people to know that we’re working with them and not against them.”

When tenants asked if they could enter a rental repayment plan, Blanton’s company specifically wrote a communication schedule into the agreements so they could keep in touch. “We didn’t want to have to chase people down,” Blanton added.

His company also created a COVID-19 task force, which was charged with tracking health and sanitation measures in each of the company’s buildings. “It’s not just about addressing tenants’ financial situations,” he said. “It’s also about how we’re going to maintain the buildings to keep tenants safe.”

A new economic stimulus that includes specific relief for property owners is badly needed to help landlords and property managers stay afloat, Blanton said. “If people aren’t paying their rent, one of two things happens at the end of this: There’s a pent-up demand for evictions, or renters are going to be on the hook for a rather large debt—and I would guess most people are going to have a very hard time paying back all the accrued debt.” Fortunately, he added, many associations in the housing industry have created a unified front to convey that message to the federal government and push for relief for property owners.