Tenants, landlords arrange payment options during COVID-19 eviction ban
As some tenants face financial difficulties due to COVID-19, a number of local landlords and property managers have worked with many of them to decrease or defer rent payments, creating a more complex situation in the near future for some.
On March 27, Gov. Gavin Newsom issued an executive order banning the eviction of any tenant for nonpayment of rent, as long as they were either unavailable to work as a direct or indirect result of COVID-19, experienced a layoff or other decrease in income due to the state of emergency, or missed work to care for a child whose school had closed. The order’s effects were set to expire May 31, but have since been extended through July 28.
According to the original order, “minimizing evictions during this period is critical to reducing the spread of COVID-19 in vulnerable populations by allowing all residents to stay home or at their place of residence.”
Landlords and property management companies in Nevada County have offered a variety of solutions in order to keep tenants in their homes per the governor’s executive order.
Jill Spalliero, branch manager at Select Property Management, said that tenants in need of payment deferment had been able to obtain it by filling out a form provided by the management company and maintaining communication with them regarding their financial situation.
“Most of the tenants we are managing have either caught up all the way on rent or almost have,” said Spalliero. “There are only a couple that are still affected.”
Grass Roots Property Management has a similar situation.
“For some, we have done a rent reduction for April, May, and June. Others have deferred their payments and will resume on a scheduled payment plan, and still others have done both,” said Stacy Corralejo, a property manager at Grass Roots Property Management.
Corralejo said the management company “doesn’t have a lot” of renters currently in need of repayment plans. She emphasized that each renter’s plan is unique to their circumstances, and the property owner’s.
Craig Adachi, owner of Collins Property Management, echoed this observation, saying, “Some owners are asking for half of the rent and forgiving the rest, asking that the renter pay what they can, or setting up a delayed payment plan.”
According to Adachi, decreased and delayed rent payments have driven landlords to consider their options as well, including selling their homes.
“The other option is communicating with their lenders, some of whom have programs for putting these payments on the back end of the loan,” said Adachi. “They will still have to make the payments, but it will be much later on.”
According to a notice published by the California Business, Consumer Services and Housing Agency, over 200 banks and credit unions have committed to providing 90 days of payment forbearance on mortgages.
Homeowners are encouraged by the agency to reach out to their lenders to learn more about their mortgage assistance options if they are in need of help. In addition, these entities have committed not to report COVID-19-related mortgage assistance to credit reporting agencies, protecting the credit scores of borrowers.
According to Dick Law, head of the management team at Paul Law Property Management, one of the biggest challenges in his role throughout the COVID-19 crisis has been ensuring that all tenants understand what the executive order entails — in particular, that the moratorium on eviction involves a deferment of payment and not forgiveness, although some individual landlords may choose to forgive rent payments.
“When we got into this, it was all changing on a daily basis,” said Law. “We now have guidelines, but are nearing the end of that grace period, and will have to address the issue.”
Law said the management company has had tenants in need fill out a form created by the California Association of Realtors, in which a plan for future payment is delineated.
The form asks for reason and verification of inability to pay rent, and allows a choice to make either a lump sum payment directly following the expiration of the executive order, or a plan of monthly installments totaling the amount owed. The default period for installments is six months, but the form allows for an alternate amount of time to be written in.
Echoing the situation of other management companies, Law said it is “very much a minority of people that are having difficulty paying rent.”
“It is a difficult situation for some, but I was surprised at how many people were OK. I was expecting the worst and it wasn’t that way,” said Law, adding that most owners have been highly open to collaborating with tenants on a solution that works for everyone.
Victoria Penate is a staff writer for The Union.
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The current level of active construction in western Nevada County is normal for this time of year, according to Barbara Bashall, government affairs manager with the Nevada County Contractors’ Association.