What Tenants Need to Know About Collections Post COVID-19

At the best of times, tenants and landlords get into disputes. That’s why leases, tenancy laws and rental boards exist: to protect both parties in the event of a disagreement or a breach of rights.

People who regularly find themselves at either end of this relationship tend to experience a disagreement of this type at some point. The financial stakes are higher for large commercial properties, so tenant collection services or even legal battles are more likely to come into play in the case of such disputes.

For residential properties, the issue is usually small enough to be settled out of court. However, a big problem exists regarding residential rental disputes: tenants tend to be unaware of their rights concerning evictions at the best of times. In the middle of a pandemic, it gets even harder to keep track. In light of this issue, here’s some information on what’s currently happening between renters and landlords during the ongoing COVID-19 pandemic.

How Things Changed During the COVID-19 Pandemic

When the entire globe faces a severe health crisis, the pressures confronting those who own and lease property can escalate quickly. While preventing the spread of the virus has always remained at the front lines of fighting COVID-19, it is unavoidable that money remains the pertinent issue between landlords and tenants.

When your tenants are unable to find work, collecting rent task can be a challenge. Given that so many people lost their jobs during the pandemic, the potential for tenant debt increased dramatically. In the case of all unpaid bills, the problem may be avoidable for a short amount of time, but eventually, the time for collection is inevitable. At this point, landlords themselves start to face their financial uncertainties.

If you’re currently worried about staying afloat as a landlord during the pandemic as regulations begin to wind down, get in touch with our team at Summit A*R to find out how we can help work out a compassionate solution regarding collections.

Past Regulations

Usually, the only way a tenant can be granted the right to forego money they owe in rental fees stipulated by a rental agreement without facing eviction is to demonstrate that their landlord has failed to uphold the terms of the lease in a substantial way.

At the beginning of the COVID-19 pandemic, regulations protecting tenants that could no longer afford to pay their rent from being evicted only existed sporadically across the United States. Whether or not you might be protected from being evicted depended on your ZIP code.  

That changed on September 1^st, 2020, when the Centers for Disease Control and Prevention (C.D.C.) issued a national moratorium on evictions. This regulation was later carried forward in a series of extensions.

Present Regulations

On August 3^rd, 2021, the C.D.C. enacted another moratorium on evictions in counties that contain a high number of cases of COVID-19 due to the claim that evicting tenants due to failure to pay their rent could be harmful to public health. This ban was supposed to remain in effect until October 3^rd, 2021, but recently things changed.

The most recent news to break regarding tenants and landlords regarding the pandemic has been that the U.S. supreme court recently rejected the Biden administration’s efforts to enact an eviction ban.

The good news for renters is that they may qualify for financial assistance from any of the 493 programs offering federal money for renters on a state-by-state basis. In at least five states, renters remain safe from evictions. Currently:

• Illinois’s eviction ban will remain in effect until September 19^th.
• California’s ban will continue until September 30^th.
• In New Jersey and D. C., the eviction ban will continue until January 2022. 
• New Mexico has not yet provided a date for the end of their evictions ban.

Future Regulations

Since the rise and fall of waves during the pandemic have been challenging to predict, significantly since these numbers varied greatly by location, it is impossible to say what unexpected changes are yet to come.

Furthermore, while landlords can apply for mortgage payment deferral programs, this also equates to compiling debts. As such, a prolonged eviction ban would come at the expense of landlords, and this resolution would only cause an even more disastrous chain of economic problems.

It is likely that landlords that are not receiving any payment, which they may have graciously delayed, will seek to collect as soon as possible. Suppose they are not able to come to a suitable resolution with their tenants. In that case, the solution may be to get in touch with the best collection agency for landlords to get help resolving the matter in a way that does not further jeopardize their landlord/tenant relations.

What Collections Look Like Today

Now that vaccination rollout has reached a significant portion of the eligible population, the number of COVID-19 cases has dropped significantly among those who are fully vaccinated. Consequently, the time has come to consider debt collection after Coronavirus as a rapidly approaching reality.

Now that the eviction ban is no longer in place, landlords may be tempted to threaten eviction to cajole residential tenants into paying their debts. The problem with this tactic is that when tenants who accrue a substantial amount of debt from past rent get evicted or move out, it becomes increasingly difficult to collect those amounts without additional help.

The result is that landlords lose both their tenants and the money they are owed. However, when you work with our trained and experienced team at Summit A*R, you’ll have recourse to much better options.

The Need for Compassion and Understanding

The worst landlord collection mistakes usually occur when landlords believe they are entitled to use intimidation tactics to collect their rent. Not only is this course of action often counter-productive, but it also guarantees that an otherwise welcome tenant will never rent from that person again. In a worst-case scenario, such actions can lead to breaking the law, charges or even needless injuries.

At Summit A*R, we believe in a P.H.D. (Preserve Human Dignity) Philosophy. That means that we ensure debt resolution will be approached in a matter that is sensitive to the reality that unforeseen crises like the COVID-19 pandemic can happen at any time.

Commercial Versus Residential Collections

When the world is not experiencing a health crisis, landlords commonly make use of our tenant collection capabilities to resolve unpaid debts. Commercial collections do not differ significantly from residential collections since, in both cases, landlords are owed a debt that requires compassionate resolution.

While the cost of leasing commercial space might be higher, business owners are people who have also faced enormous difficulties during the pandemic. That’s why the best solution to commercial debt recovery is to contact our team at Summit A*R for assistance.

Given that our team is trained to resolve debt resolution without threats, there’s no reason to wait until the eviction ban ends to get started. If you’re a landlord facing uncertainty due to a lack of residential income, please get in touch with us to get started on a solution.