COVID-19 Tenant Payment Performance Update through July 2021

2021-08-12

COVID-19 Tenant Payment Performance Update through July 2021

We truly hope you appreciate our extra efforts to keep you informed about the COVID impact on tenant rent payment performance. There are a lot of issues outside of our control, but we want to communicate to keep you informed. Please send us any suggestions for what additional information you’d like to see.

Please be sure to share this with anyone you know interested in real estate investing or looking for a better property manager, so they can see what they are missing!

EVICTION MORATORIUM UPDATE

Another example of why you can’t trust the government. After the CDC stated they would NOT extend the Eviction Moratorium, and then letting it expire and get our hopes up, they smashed our hopes and extended it until October 3!

Last month we wrote, “We only hope political pressure doesn’t lead to them reneging on this” and that’s exactly what happened.

Lawsuits have been filed to challenge the CDC’s authority on this extension, so hopefully, the moratorium will end before October. 

One unsettling trend to keep an eye on is the growing “Housing is a Human Right” movement. We remember when there was a movement for “Clean Water is a Human Right” in Detroit when the city started shutting off water for those with unpaid bills. Fortunately, we haven’t heard any more about that in over 5 years. We hope this latest movement disappears also.

If you’re a client of ours, expect to get updates on approaching eviction hearings getting adjourned until AFTER October 3. We have no idea what will happen to these adjourned cases if the courts force the CDC to rescind the latest moratorium. Will they be prioritized to be scheduled earlier or will overworked court staff just leave them as scheduled?

GOVERNMENT AID FOR PAST DUE TO TENANTS

In the month of July, we received seven  COVID Emergency Rental Assistance (CERA) checks. Approvals are starting to occur faster also.

It’s taking us an incredible amount of time and resources though. Caseworkers are claiming they are not getting our submissions, forcing us to email the same application packages 2 or 3 times. We fully believe that they are using this as an excuse instead of admitting they are way behind on processing applications. 

Want an example of our government not properly thinking through their actions? Congress has appropriated almost $50 million for the CERA rent-relief program – but didn’t appropriate any funds to increase staffing at the agencies charged with approving applicants and distributing the $50 million! So far, less than 10% of the funds have been distributed since the $50 million was made available back in March.

DETROIT NOTE: Most CERA application caseworkers are only paying 80% of eligible funds if a property doesn’t have its Certificate of Compliance from the city. After months of warning our clients this could happen, many now want us to perform miracles and get their properties inspected and repaired ASAP. Has anyone not heard that there is a labor shortage in the USA? We’re doing our best, but please be reasonable with your expectations😊

RENT PAYMENT TRENDS 30-60-90+ Days Behind – thru July 30, 2021

We took over management of several properties in June and July, but somehow our 30/60/90/120 numbers stayed exactly the same – and yes, we double-checked our numbers.  

We were able to get rid of a few nonpaying tenants, but unfortunately, most tenants 90+ days behind are not cooperating with the CERA process and we don’t think they will until a judge issues an eviction judgment against them. Why won’t they take advantage of the government’s free rent money? Half are probably afraid of filling out the CERA application and disclosing their personal info, the other half want a power trip over their landlord.

Macomb County: Due to our continued efforts to collect rents and helped by the reception of some CERA funds, the statistics on tenants that paid Full, Partial, and Zero rents all improved.  Below you can see on the chart that the green line went up, while the yellow and red ones went down. Oakland County:  The same occurred with our Oakland County tenants, with improvements in all areas. If we can brag a little 97% of tenants paid their rent in full and only 3% paid nothing.

Oakland County:  The same occurred with our Oakland County tenants, with improvements in all areas. If we can brag a little 97% of tenants paid their rent in full and only 3% paid nothing.

Wayne County: Again, we were able to get improvements in all areas as shown below.

We’re a bit nervous about the improvements in rent payments shown above. We believe the majority of it was due to tenants worried about the Eviction Moratorium ending. With the latest extension, we hope the numbers don’t go negative, or at least not too negative.

FAVOR: If you have a property that has seen an improvement in rent delinquencies, please take a moment to give our Delinquencies & Evictions Department a compliment for all their hard work. They spend their days dealing with a lot of negativity from tenants (and some owners), so a bit of positive appreciation from you would go a long way to make their day!

CASH-FOR-KEYS:  If you’d like to explore getting rid of a tenant NOW versus waiting for the end of the Eviction Moratorium, contact us about paying delinquent tenants to move. Yes, it’s frustrating to have to do, but we’ll analyze the business case for you to determine if it makes sense. 

For those of you that have contacted us to explore Cash-for-Keys offers to nonpaying tenants, we hope you appreciate our well-thought-out procedure. We have had some outrageous requests from tenants, but our procedure is designed to account for that and protect you legally.

Again, please refer us to others you know interested in real estate investing or that are looking for a better property manager!

Image courtesy of Tima Miroshnichenko

 

 

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