The coronavirus pandemic continues to sweep through the country. Many experts are saying that it will change the economy permanently. According to recent research and data, a large portion of the job losses is permanent. The coronavirus recession might turn into a depression that will last much longer than most people are willing to admit. The unemployment rate is likely closer to 25% than 14.7%.
With massive unemployment in Philadelphia, many tenants are not able to pay their rent. This is a problem for Philadelphia’s many landlords. Even the most understanding landlords have their own bills to pay. Landlords throughout Philadelphia are worried about making their own payments and many are unsure about the best way to handle their tenants. If your tenant has refused to pay rent, you are probably wondering what you should do now.
Renters Across Philadelphia are Not Paying Their Rent on Time
Nearly a third of all Americans did not pay their rent on time in April, according to the National Multifamily Housing Council. More than 1.5 million people in Pennsylvania have filed for unemployment compensation as a result of the governor closing down all nonessential businesses to help stop the spread of COVID-19.
Eviction Proceedings are on Hold Through July 10 in Philadelphia
Due to a state moratorium, all eviction proceedings in Pennsylvania are currently on hold until at least July 10th. The federal CARES Act has prohibited evictions of renters in federally subsidized housing until July 25th. Additionally, if you have a federally backed mortgage on your properties, you will not be able to evict your tenants through July. Should landlords try to evict tenants unlawfully, tenants will be able to file a police report.
Pennsylvania Renters Must Still Pay Their Rent
The Pennsylvania Attorney General’s Office has stated that tenants must still pay their rent as long as their rental contracts are still valid. Additionally, rent payments are still due even though the Pennsylvania government has put a stop on eviction proceedings throughout the state.
What Happens if My Tenant Stopped Paying Rent?
If your tenant stops paying rent, you cannot currently start an eviction proceeding. You can, however, still do the following:
- Charge tenant late fees
- Report late or missing payments to credit agencies
- Raise rent for tenants
- Issue notices of eviction
What About the Current Rent Strike?
Landlords throughout Pennsylvania are worried about rent strikes. The Philadelphia Tenant Union started calling for citywide collective rent strikes beginning on May 1. This organization is striving to connect tenants who all rent from the same landlord. They are encouraging groups of tenants to make collective demands such as rent reductions of their landlords. Together, they plan to withhold rent as a collective bargaining strategy to push landlords to lower their rent. The organization and others like it are pooling money to create a task force to prevent evictions in Philadelphia.
Should I Make Accommodations as a Landlord?
Community legal services in Philadelphia are suggesting that tenants reach out to their landlords and request a reduction in rent. Should landlords make an exception to their rent policies or make accommodation? At Abramson & Denenberg, P.C., we recommend speaking to a Philadelphia landlord/tenant lawyer as soon as possible.
Do not put any accommodations or lowered rent in writing before an attorney reviews the document on your behalf. You might unwittingly hurt your own interests long-term as you attempt to help your tenant or tenants. At Abramson & Denenberg, P.C., we can review your entire legal situation and advise you while keeping all of the recent developments in mind.
The Pennsylvania Government is Attempting to Extend Renter Protections
The Pennsylvania Attorney General Josh Shapiro is asking a consortium of landlords, property owners, and lenders to extend the prohibition of eviction proceedings after Pennsylvania courts re-open. Additionally, some Pennsylvania legislatures have proposed a state-ordered mortgage and rent freeze.
Tips for Philadelphia Landlords During the COVID-19 Outbreak
Pennsylvania landlords are in an incredibly challenging place. They are not allowed to begin any new eviction proceedings until at least July 15th. Courts are preparing to re-open, but probably will not be fully operational until at least the middle of July. A letter from Attorney General Josh Shapiro urged landlords to do the following:
- Waive late fees for residents that have provided documentation of their financial hardship or loss of employment that is related to COVID-19.
- Help tenants identify and access resources through community programs and governments
- Create payment plans for their tenants, including those with outstanding eviction balances, and put that plan in writing
At the same time, landlords also have mortgages to pay. Many, if not most landlords, rely on rental income to pay their own bills.
Obtaining Rent Guarantee Insurance for Landlords
Between 8 and 10 million landlords in the United State manage their own properties. Most of them are concerned that their tenants will become unable to pay the rent. Some companies have addressed the concerns of landlords by offering rent guarantee insurance.
The number one concern of tenants is what will happen when their tenants stop paying rent and they cannot pay for their own mortgage. With rent guarantee insurance, landlords can file an insurance claim that will cover between six weeks and six months of missing rent per year. Every policy covers a single lease agreement.
Contact Our Experienced Philadelphia Landlord/Tenant Lawyers
Before signing any agreements with your tenants or entering into negotiations, it is important to speak with an experienced landlord/tenant law attorney. At Abramson & Denenberg, P.C., our experienced legal team has extensive experience representing the best interests of Philadelphia landlords.
If you are a landlord and you are concerned about your renters not paying rent, we can help advise you. Even though you cannot begin eviction proceedings at the current moment, you can still take steps to protect yourself and your property interests. Contact our law firm today to schedule your initial consultation.