During the first efforts to mitigate the COVID-19 crisis, many city and state governments issued eviction moratoriums meant to grant renters peace of mind. However, in the rush to protect renters from eviction during a health crisis, property owners were left behind. Mom-and-pop landlords have especially suffered. Many will not benefit from most of the CARES act tax breaks for rental corporations. As a result, some Portland landlords may find themselves in similar financial straits to unemployed tenants, but without as many government resources to get back on their feet.
With the crisis sure to stretch past the summer, landlords must act quickly to prepare for an uncertain future. Luckily, there are resources available for property owners struggling with a lack of income. At Rent Portland Homes by Darla Andrew, we feel the plight of property owners struggling in these unprecedented times. Here are a few resources and suggestions we recommend for weathering the challenges of COVID-19.
How the Moratorium Affects Portland Landlords
Portland’s eviction moratorium will last until at least September 30. During this time, tenants cannot be evicted for nonpayment of rent. They also do not need to prove they cannot pay. However, the moratorium does not prevent evictions for any other lawful purpose. If you have cause to evict a tenant for an issue other than nonpayment of rent, you should familiarize yourself with Portland’s specific eviction laws.
The repayment grace period begins October 1, 2020, and lasts six months until March 1, 2021. During this period, tenants will need to keep up with the current month’s rent while repaying any missed rent they owe. Landlords are not allowed to charge late fees during the moratorium.
Start By Working With Tenants
A good starting point before seeking out other financial aid is to use what tools you have available. Depending on your lease, you may be able to use existing deposits to cover missed rents. By handling each tenant’s situation on an individual basis, you can work out a system that benefits both of you.
Use the Security Deposit
Unless your leasing agreement specifies otherwise, you can put the tenant’s security deposit towards unpaid rent. Remember, Portland City Code 30.01.087 changed how you can collect and handle security deposits, so make sure you’re aware of the new regulations. If you received the last month’s rent when the tenant moved in, you can also use that money to cover unpaid rent. Remember that you must deliver an accounting of what parts of the security deposit and last month’s rent were taken and what they were used for within 31 days of the tenant moving out.
Work Out A New System
However, the security deposit and last months’ rent will likely only cover a month or so of missed income. With the effects of COVID-19 stretching far into the future, long-term solutions offer more protection. Working out a system of partial payments while tenants get back on their feet can help cushion the financial blow of unpaid rent. It may also help your tenant chip away at their financial obligations before they need to start paying them off. You can also set up a rent deferral agreement with tenants who may be a good fit.
Communication is Key
As it always is with renting, keeping an open dialogue with tenants is the best way to ensure a productive partnership. Each tenant’s situation will be different, and so tailoring a solution to each of their needs will help you find a system that works. In these strange times, a little sympathy can go a long way. Cutting your tenant some slack when you can afford to may help stop them from getting overwhelmed—and thus put them in a better position to pay off the rent they owe in the coming months. You may also wish to direct your tenant to rent assistance resources.
COVID-19 Resources for Portland Landlords
The rent moratorium may get a lot of press, but there are also measures to ease the burden on landlords struggling to pay their mortgages. Under the CARES Act, lenders cannot foreclose your property before August 31, 2020. Those with GSE-backed mortgages can also request forbearance for 180 days if they can prove financial hardship. Portland landlords with Freddie Mac or Fannie Mae loans may have the ability to reduce or suspend payments for up to twelve months.
House Bill 4204 prohibits lenders from foreclosing a property through September 30. Lenders cannot collect any fees or penalties, impose punitive interest, or garnish income during this time. They must also provide their borrowers with written notice of their rights under HB 4204.
In March, The Federal National Mortgage Association offered a 90-day mortgage forbearance to multifamily property owners with Enterprise loans, as long as they did not evict any tenants for nonpayment of rent during that period. With the length of forbearance recently extended, those with existing agreements can apply to extend them for an additional three months. Borrowers who participate in this program must provide tenants with flexibility in paying back rents owed.
Open communication is as important with your lender as it is with your tenants. If you’re facing financial difficulties or unable to pay your mortgage, reach out to your lender and talk about your options. Many lenders are offering different solutions based on the needs of their borrowers. Start by seeing what they can offer you.
Have The Experts On Your Side
The Portland rental market has seen dramatic changes this year. If you’re looking for someone to watch out for your rental property through the ups and downs of the modern world, look no farther than Rent Portland Homes by Darla Andrew. We handle all the details of managing your property to ensure that it remains profitable and in top condition. You’ll never need to worry about juggling evictions or new legal ordinances. Focus on yourself and those closest to you during these unprecedented times, and trust us to take care of everything else. For more information, call or text us at (503) 515-3170 or fill out the contact page on our website.