The Eviction ban has been lifted. What does it mean for you? In my area the government imposed a ban on evictions for folks that lost income due to the COVID 19 pandemic. The purpose of the ban was to allow people time to receive government benefits and work out payment arrangements with landlords. Then the tenancy offices pretty much shut down. They were being very selective about which eviction cases they would handle. The residential tenancy office went to handling these limited cases electronically and by phone.
It is now three months later and the residential eviction ban in my area as well as in many other areas has being lifted. This causing an already overburdened residential tenancy office to be back logged. I cannot say for certain how many eviction notices will be served, but it will likely be in the thousands.
Many anti-poverty groups from coast to coast are asking for leniency from landlords and help from governments to avoid a possibility of a massive homeless problem.
Here are links to articles about the topic:
Thousands of Nova Scotians Face Eviction Proceedings as Ban Ends
Residential eviction ban ends in N.S., concerns loom for tenants, landlords
Access Nova Scotia centres reopen to walk-ins
Residential tenants anxious about what comes next after eviction bans end
U.S. looking at “a tsunami of evictions” as moratoriums expire
U.S. cities temporarily ban evictions as coronavirus outbreak worsens
We are all dealing with a worldwide pandemic. This has not occurred in modern times, so nobody really knows what the right or wrong thing to do is.
We may not be all in the same boat, but we are all in this together. That means compassion, common sense, and compromise will need to be involved as we navigate our way through uncharted waters.
Many large landlords will handle the problem systematically by submitting all the required eviction documentation to the residential tenancy offices. They may work out payment plans on individual basis, and depending on building locations, they will determine how flexible they will be with the tenant in arrears. The larger landlords can also likely weather the storm better.
To many small landlords the virus is causing serious financial hardship, and not having rental revenue is simply not a viable option for them.
No matter what size the landlord mortgages, property tax, utilities, repairs and maintenance all need to be paid. The landlord business is often stereotyped as a cash rich business, when in reality it is a very thin margin high expense business.
Then you have tenants that simply cannot pay due to a loss of income. Many of these people have families. lets face it, the travel, tourism and hospitality business has been decimated by this virus. An estimated 2 million Canadians and an estimated 39 million Americans are laid off.
On top of that in our area when the government announced the ban on evictions, some people heard that as an opportunity to not pay rent.
Many areas in Canada and the USA were facing a housing crisis before the pandemic. This has now been amplified by massive unemployment, fear of leaving the home, government mandated business shut downs, and now budget cuts by governments.
The residential property business is unique. It is a critical essential service, but it is also a business. The areas the properties are located rely on the property tax to support the government. The businesses in the area rely on the residents to provide a work force and pay taxes. Both the government, Community groups like ACORN, and landlord groups like IPOANS agree that the government needs to help.
Haligonia.ca asked representatives from both these organizations their thoughts on the situation (Full article here)
Kevin Russell (Executive director of IPOANS) seems to agree that it will take government intervention to help tenants and landlords get caught up on rent. Kevin estimates the financial impact on local landlords has been approximately 12.5 Million (Source Halifaxtoday.ca and Haligonia.ca)
Darryl King (Member of ACORN NS, which is an independent national organization of low and moderate income families) said:
“We’re all being affected by COVID-19, especially those of us who are on low- to moderate-incomes. We need support from the provincial government to address these issues and not face the horrors of being evicted from their homes and being put on the streets.” (Source Haligonia.ca)
Many tenants and landlords have been or are going to be affected by this pandemic. That can mean many things, from homelessness to financial ruin. I came up with some ideas that may help your situation.
What can tenants do:
Communicate with your landlord and make a plan: The reality is most landlords buy rental properties as a way to fund there retirement, they usually work regular jobs. Many cannot afford to carry the cost of the building without rental revenue.
If you cannot pay and do not see anyway possible to pay, own it, and make a plan. The eviction process is going to be a long one, so if you have a way to leave or get other support to pay, be upfront. Make a deal. You may not be delivering good news, however, bad news delivered in a positive way, can have great results.
If your income has not been affected by the pandemic, pay your rent. I have heard from landlords saying that even tenants that have not had their income negatively affected by the pandemic, look at it as a way to just not pay rent.
If you need to leave and are just going to do a mid-night move, be respectful of the space. Leave it clean, without a bunch of junk in it. Then let your landlord know. Are they going to be happy? That is unlikely, but they will appreciate the notice, which may help with their decision to take the case to the tenancy board or court.
The bottomline is that if you can pay, then pay, if you cannot pay, communicate with your landlord / property manager.
What can landlords do:
Communicate with your tenants: If you have a tenant that works for an industry like travel, tourism, and restaurants, check in with them. Get ahead of the possibility of the rent not being paid. Step out of your comfort zone. You may need to negotiate a deal, and the conversation might be awkward.
Forgive one month of rent: This is always controversial when I bring it up. If someone has been a great tenant up until COVID, this could be your opportunity to help someone out of a tough spot. Maybe they are only going to be laid off for a short period of time. If this is the case, forgiving one months rent may pay off in the long term, rather than having a tenant agree to a rent deferral plan, that they will likely not be able to follow through on. I am not saying this is the best option, but definitely something for smaller landlords to consider.
Cash for Keys: (You will need to check with your local rules and laws to make sure this is legal in your area.) Basically it is how it sounds. The eviction process can be long, and usually when you get control of the unit it is damaged, full of garbage, and not ready to show. What you can do to avoid this process works like this. Offer the tenant cash with a specified move out date. Make a condition that the unit needs to be completely cleaned out. It can be a win / win for both.
Rent deferral: Talk to your tenant about a rent deferral plan. This could be a 6 – 8 month plan where you spread the missed rent over that period of time.
Accept the cost of doing business: When you are in the residential property business, all sorts of curve balls get thrown your way, usually it involves some sort of capital expense. The pandemic has negatively affected the income of many people around the world. If you end up with some lost revenue, and have to do some evictions, stay calm, cool and collected, and chalk it up to the cost of doing business during COVID times.
Ask for a mortgage deferral: If you are not going to have enough money to pay your mortgage, contact your lender and ask for a mortgage deferral. Many lenders are ok with doing this during these crazy times.
Until next time,
Design your landlord experience,
Michael P Currie
Landlord by Design
Disclaimer: Above advice is for entertainment only. Seek help from a professional before you execute on any of the ideas presented in this post.
For a manual, plus some wild stories on property management, you can get our book on Amazon.
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