COVID-19 Tenant Payment Performance Update through March 2021
We truly hope you appreciate our extra efforts to keep you informed about the COVID impact on tenant 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!
CDC Eviction Moratorium: The bad news, on March 28, the CDC extended the Eviction Moratorium for 90 days, until June 30.
Some good news, a new Eviction Protection Declaration form better clarifies if a tenant is eligible or not for protection from eviction. Now, we just hope the courts abide by this form and allow evictions for unqualified tenants!
We are adding this to our standard process of trying to challenge judges with our proof that tenants are not following the CDC Affidavit requirements and thus should NOT be protected from eviction. While we are getting Possession Judgments, we hope we can also start getting Writs of Eviction to be able to hire bailiffs to remove these tenants.
GOVERNMENT AID FOR PAST DUE TENANTS
We’re told COVID Emergency Rental Assistance (CERA) funds are to be released within a week or two. You can click on the link to read more about the program, but it is supposed to be easier for tenants to qualify than the Eviction Diversion Program (EDP) was and will pay up to 12 months of back rent and 3 months of future rent, plus utilities.
The State of Michigan is supposed to receive $622,794,676 and Macomb County $26,026,830. These funds will be disbursed via the Michigan State Housing Department Authority (MSHDA) to local housing agencies as were the last round of funds.
We’ve already submitted over 28 CERA applications, so we can get our owner clients their money as quickly as possible. Unfortunately, we still have a number of tenants that refuse to cooperate. We already know many of these tenants will not qualify for CERA because they are actually working! They are just trying to take advantage of the eviction moratorium. We hope eviction judges start recognizing this problem and allow us to get rid of these bad apples.
DETROIT EVICTIONS TO REQUIRE CERTIFICATES OF COMPLIANCE (rental inspections)
No further updates on the 36th District Court requiring a valid Certificate of Compliance to prove that a rental property has been inspected and met city inspection requirements. So far, we’ve been getting Possession Judgments without these, but expect it to start being required. To date, the majority of our owner clients are allowing us to have their Detroit rental properties inspected, although the city’s BSEED department is behind on processing them. We’ve recently had tickets on several properties dismissed because we submitted everything required prior to the tickets being issued!
RENT PAYMENT TRENDS – thru March 31, 2021
We saw a slight uptick last month in the percentage of tenants less than 30 days behind on their rent. Looking at the graph below, you can see this number has stabilized at just under 80%. There was a significant decrease in tenants 30-60 days AND 60-90 behind in their rent! The only negative was a slight increase in those 90+ days behind – which again is due to a few tenants “giving up” on addressing their past due balance, despite all our efforts to work out reasonable payment plans with them.
Macomb County: The improving trend of tenants paying full rent continued in March, which we’d like to think is due to our tireless delinquency efforts. Further good news is that we hit zero on tenants paying partial rent and had almost a 50% drop in tenants paying no rent whatsoever! Overall, 94% paid full rent.
Oakland County: More good news as we saw a slight increase in tenants paying in full, with corresponding decreases in tenants paying partial and no rent. Overall, 95% paid full or partial rent.
Wayne County: The percentage of tenants paying full rent increased slightly and has been fairly stable for the last 5 months. The great news is that the number of tenants paying partial rent increased 300% and those paying nothing decreased by 40%! Overall, 84% paid full or partial rent.
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!
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!
Timeline of Eviction Announcements
March 10, 2020, Executive Order 2020-04: no end date. Declared a state of emergency across the state of Michigan until the COVID-19 threat resolved.
March 10, 2020, Executive Order 2020-19 end date of April 17, 2020.
Temporary suspension of all court-ordered hearings & evictions for nonpayment of rent.
March 23, 2020, Executive Order 2020-21 end date of April 13, 2020.Temporary suspension of all activities not necessary to sustain or protect life (includes real estate related).
April 7, 2020, Executive Order 2020-42 end date of April 30, 2020.Extension of temporary suspension of all activities not necessary to sustain or protect life (includes real estate related).
April 24, 2020, Executive Order 2020-59 end date of May 15, 2020.Extension of temporary suspension of all activities not necessary to sustain or protect life (includes real estate related).
May 1, 2020, Executive Order 2020-67 end date May 28, 2020. Declared a state of emergency across the state of Michigan until the COVID-19 threat resolved.
May 1, 2020, Executive Order 2020-70 end date May 15, 2020. Clarifies temporary suspension of all activities not necessary to sustain or protect life (includes real estate related).
May 15, 2020, Executive Order 2020-85 end date June 11, 2020. Clarifies temporary suspension of all activities not necessary to sustain or protect life (includes real estate related).
May 21, 2020, Executive Order 2020-97 no end date. It allows some businesses to partially reopen with required safeguards.
May 22, 2020, Executive Order 2020-99 extends the end date to June 19, 2020. Extends the COVID-19 State of Emergency until June 19, 2020.
June 1, 2020, Executive Order 2020-110
Allows most businesses to partially reopen with required safeguards by June 8, 2020.
June 5, 2020, Executive Order 2020-114
Allows all businesses to immediately reopen with required safeguards
June 11, 2020, Executive Order 2020-118, extended suspension until June 30th. Extension of temporary suspension of all court-ordered hearings & evictions for nonpayment of rent.
June 26, 2020, Executive Order 2020-134 , extended suspension until July 15, 2020.
Extension of temporary suspension of all court-ordered hearings & evictions for nonpayment of rent. Allows for rent payments by Eviction Diversion Program if the tenant can find such a program and qualify for it, but this would also extend suspension until July 30, 2020.
July 16, 2020 36th District Court Announcement, Eviction Moratorium until August 15, 2020. Pertains to Detroit eviction cases only.
September 4, 2020 CDC Declaration, Nationwide Eviction Moratorium until December 31, 2020. Nationwide suspension of evictions for nonpayment of rent if tenants sign a declaration form.
December 28, 2020 The Consolidated Appropriations Act 2021, extends the Eviction Moratorium until December 31, 2020. Nationwide suspension of evictions for nonpayment of rent if tenants sign a declaration form.
January 29, 2021 CDC Declaration, Nationwide Eviction Moratorium until March 31, 2021. Nationwide suspension of evictions for nonpayment of rent if tenants sign a declaration form.
Image courtesy of Karolina Grabowska