Except that people who own have a choice; they could be renters instead if they wished. Renters often have no other way to get a roof over their heads.
It is rather hard for me to get worked up about major apartment chains going belly-up. If they failed to insure themselves we have bankruptcy courts to clean up the mess.
The landlord has to pay his mortgage. No compassion for him? They live for free, he goes into hock? Or are all landlords just rich bastards that can afford it?
Here in Canada there are similar concerns about both the landlord and the tenant. The situation was partially alleviated by federal legislation that allows anyone with a mortgage, whether a landlord or individual homeowner, to defer mortgage payments for up to six months. Not sure of all the details but I presume that the term of your mortgage would be correspondingly extended by six months. At the provincial level, no-eviction laws have similarly been passed. Besides being sensibly compassionate, it’s also important because the last thing we need is homeless shelters being packed to the rafters and becoming a major source of COVID-19 spread.
At the same time the feds have considerably loosened the rules on EI (unemployment insurance) payments so that far more people now qualify.
Maybe the landlords should have set aside some money for a rainy day and not bought that $5 latte or splurged on avocado toast.
A question already answered:
This. I think we should do our best to prevent anyone from being turned out into the street in this crisis, whether they’re a landlord or a renter. Equal compassion for all.
OK, let’s say they didn’t ban evictions and use my rather modest apartment building as an example:
We have 20 units in this building. Two are currently vacant. Of the people in the remaining 18 exactly two have jobs right now: myself, and they guy who works in the medical testing lab. OK, so the rest of those folks now have no income. The landlord boots them out. The company now has 16 empty units in a 20 unit building and exactly 2 paying tenants. You think that couldn’t also bankrupt them?
Rent relief for the tenants, mortgage relief for the landlords. I can’t see any other way to make this work. Yes, it’s a mess. What’s the alternative?
In normal times, rental properties are a contract between two parties with rewards and risks for both.
Yes, if you don’t pay your rent your landlord can evict you.
When the landlord can’t keep the properties up he has to refund your rent and security deposit - which is what happened a couple years ago when the building I was living in had problems that made it unlivable. The landlord, without being asked, came over and handed me a refund for the portion of the month I had paid when he could not keep up his end of the contract. None of it was his fault, but nonetheless he could not keep up his end of the bargain.
These are not normal times.
If my current landlord evicts everyone in the building currently without a job… what then? Where is the company going to find people WITH jobs to fill those units?
Unoccupied buildings deteriorate. They are also more vulnerable to looters than occupied buildings, and if you start mass evictions then there WILL be looters and squatters.
To MY mind if the two parties to the rental contract can work out a compromise for this difficult times that mind up being of benefit - or at least less harmful - to BOTH parties in the end.
As the old adage goes - if you owe the bank $1,00,000 you have a problem. If you owe the bank $100,000,000 the bank has a problem.
These are not ordinary times. The banks are staring down thousands of landlords with commercial mortgages that won’t be able to make their payments because their tenants are unable to pay. It isn’t the tenants that have the problem. The banks are the ones with the problem. Nobody wins by evicting tenants. Nobody wins by foreclosing mortgages. There are no prospective tenants waiting to take over the lease, and there are no prospective new landlords waiting to buy distressed property.
As an Canada, here in Oz there is a six month hiatus on business loans. This is probably only the start. Nobody anywhere should be considering closing down existing commercial relationships because of delinquency. It will just run up the chain and make things worse for everyone. How this is managed is going to be interesting to see. You can pretty much ignore money theory of any kind for now. For all useful purposes the money world will run with a stopped clock. The next few weeks will stop it. How it is restarted without the money world going into fits is going to be the really interesting bit.
In Indiana, there has been an extension on property taxes. There won’t be penalties for paying them all in November. It normally is that there is a payment due in May & and payment due in Nov, but there is no movement to seize your property for non-payment of the May tax until you do not pay it as well as the Nov payment by the Nov due date; HOWEVER, there are of course, interest and late fees for not paying until Nov. The status now is that if you don’t pay the full amount until Nov, there will not be late fees or interest; it is all still due in Nov, though, as of this writing.
I got a message from my landlord that non-payment of April rent will not result in an eviction. The rent will still be owed, but without the usual late fees or interest. They “will work with” tenants to collect whatever is in arrears when people are back to work. Nothing has been said about May rent.
I assume that “will work with” means that they will accept payments instead of demanding the entire amount out of your first paycheck once you are back at work.
I live in a complex where lots of people live paycheck to paycheck, but do at least have credit cards as a way of getting through a month. Pretty much everyone here has at least one steady wage earner living in the unit, and many have two. So it should be that while a ton of people are probably getting laid off, and many are having to take leave or request work-at-home options because children are off school, people who are off work are eligible for unemployment, and no one is already in arrears going into this situation.
So, not at the very bottom of trying to get by, but still below the 50th percentile. Maybe the 25th percentile. The rent exception is probably a huge help to a lot of people.
Personally, we’re going to pay it on time. We decided we’re going to use savings to keep up with our bills. We opened a second savings account, and divided our liquid assets (basically, all our ready cash savings) in half, and have half in one account, and half in the other. We are going to use one account to keep our checking (really, debit) account replenished when we don’t have enough coming in. One we will not touch, unless we have a medical emergency, like if one of use actually catches this thing, and we have a 20% copay on an ICU stay. If we use up the savings account that is for replenishing checking, THEN we start taking advantage of the electric company not cutting people off for non-payment, and any other offers of no-interest arrears we have, like not paying the rent. We also move to credit cards. We have $20,000 available on 7 different cards put together. If we max them out, we will declare bankruptcy.
Honestly, though, if this went on long enough that we used half our savings, and maxed out our credit cards, we’re talking almost 2 years from now. By that time, we will be living under a whole different paradigm, I’m sure. There probably won’t be bankruptcies, collectors, and private property, landlords, and who knows what will happen with the power grid? Everyone might have some kind of manure-burning generator.
I doubt it will go on that long.
That’s a good idea. I haven’t heard anything about lay-offs from my tenants, but one of the largest employers around here - Toyota - has announced a 2-week shutdown and rumors are flying that where I work might do the same next week. I’ve got enough set aside to cover a few months, so I’ll do the same for April and see what May will look like.
The article I linked to says that one reason for the suspension of evictions is to reduce the number of people who have to appear in court, thereby reducing social interaction.
My father-in-law had several rental properties while he was still alive. Whenever a tenant would give him some sob story about not being able to pay rent he would say “you need 2 things to live, food and shelter. I provide the shelter so you better make it a priority to pay or somebody else will be providing your shelter”. He would then suggest canceling the cable TV, selling their fancy car for something more affordable, basic cell phone and not a fancy smartphone, stop eating out, etc… Gee…the tenant wasn’t quite as “poor” as they thought they were if they cut out all the extras.
Either the tenant made rent or my FIL considered it their 30 day notice.
I think there are people out there who would rather live on the street than give up their smartphones.
Not me, I sold my smart phone for avocado toast.
Okay. That’s fair…to everyone except the company that lent the landlord money to buy the home. They go without income for six months. But, again, hey they are rich bastards so THEY can afford it.
I don’t like the class warfare that is implicit in modern democracies. Sure, nobody should be made homeless by this crisis. But to say to tenants you cannot be evicted just keeps passing the harm up the next rung to the landlords and then the banks.
If there is a bailout, it should be from the government, not passed on to another private party. If I borrowed money from a bank to buy a house and then rented to a tenant, we didn’t engage in some sort of feudal caste system where each has responsibilities to the next person down line.
Sure people are suffering, but it makes no sense to pass off the suffering to someone else an violates every rule of fairness and equality in a democracy.
Maybe the renters should have set aside some money for a rainy day instead of getting a new tattoo or buying another pack of smokes. If you want to play stereotypes, then we can do that.
And when he had no tenants, did he get mercy from the bank?
That’s awesome. You’re doing your namesake proud.
When one of my uncles lived in Chicago, he owned a bunch of brownstones he used to rent. He renovated most of them so that the stories were separate units. The basement would be a studio, more or less, and the second floor would be pretty nice. If there was a third floor, it would be a one-bedroom, with a kitchen area.
A lot of the people in the studio apartments were renting dirt cheap, because they did all the yard work and outside cleaning, and if there were any common areas, cleaning of those.
When people gave him a sob story, he’d ask “How much can you pay?” and he’d bargain with them, because getting something was usually better than what it cost him to file bankruptcy. He tell them they still owed, but take what they could come up with. He had people who never paid on time, but always paid up by the middle of the month, so he just let them ride. He had people who faithfully paid on time for years, so when they had a sob story, he was a lot more inclined to listen, and to let them lapse a couple of months. He had people who were always just a little short, but were ideal tenants-- neat, never complained, made very minor repairs themselves, and no one ever complained about them. If they always seemed to be $25 short, he’d reduce their rent by $25, and see if they could meet that every month.
In other words, he didn’t have an overriding principle-- he dealt with every case as it came up as sui generis.
He’s sometimes a jerk in some ways, but I think he must have been a pretty good landlord.
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Unlike most people who don’t heed advice from financial advisors he had an “emergency” fund to cover times when there was no income.
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The cost of wear and tear on property doesn’t exist when nobody is living there.
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He wouldn’t be liable for unpaid utilities from his tenant 'cause if they can’t afford to pay rent they are probably not paying their utilities.
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He charged affordable rental rates, $400.00 for a 2 bedroom house as an example, so he had people who willing to pay his rates if somebody else wasn’t.
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The properties were bought and paid for before he was retired as income for when he was retired so the bank had no concern if it wasn’t rented.
My point was that housing SHOULD be a priority but many people think there are more important things in life like cable TV, cigarettes, etc…
Under these circumstances the landlord might not have to pay his mortgage.
I’m a tenant but keep finding myself on the side of the landlords. My rent has gone up with inflation (and so has my pay), and most of the tenants where I live are on “fixed income” that goes up with inflation. Every year they protest and waste time over the inevitable at-inflation rent increase. (It’s rent-controlled. Places without rent control here can literally double your rent with three months’ notice. Tenants at such places should be protesting!)
Start eviction procedures immediately. You should not have waited months. You also want to get a move on, in case New Jersey makes that impossible for several more months.