What To Do If Your Tenant Can't Pay Their Rent Due to COVID-19

Updated: Mar 25, 2020

BY: SCOTT HUNDEY


What Do You Do If Tenants Tell You They Can’t Pay Their Rent Because of COVID-19?

Fact: It’s suddenly a different world than we’re used to. People are scared.


Fact: Many people are not able to work due to self isolation and social distancing.


Fact: Some of these newly unemployed people are our tenants.


Fact: As a landlord, you WILL be approached by some tenants who tell you they are going to have trouble paying the rent.

What will we do? Here’s 7 tips from MVP Properties best practices:

1. Communicate. Speak to your tenants regularly. Listen Empathetically and try to understand their points of view. Tenants are people too. Some people view landlords as a greedy rich elite with a bank full of money and no bills. Here in Canada, that’s usually not the case. Most of the time a landlord is someone who has struggled and overextended themselves financially past the comfort point of the rest of us in order to buy that rental property which is attached to a long list of bills to pay and they must make personal sacrifices in order to keep that property running for their tenants. Sometimes a property can run into negative cashflow, and landlords can run out of their own resources quickly even in the best of times. If we are to change the perception of landlords, we need to first show our tenants that we care about them and the situation they are coping with. People don’t care how much you know until they know how much you care.

2. Educate your tenants. Help them understand that as difficult a time as it is now, the bills still need to be paid. Tenants don’t normally understand your business. They just assume you got relief already for your mortgage and all your expenses because of your higher financial IQ and will be pocketing all the rent as a bonus. But usually that’s not the case. They don’t normally know how similar we are to them and what issues and critical expenses a small business like yours has:

  • Maintenance fees, office and administrative costs, HOA payments, renovation and construction loan repayments, insurance, payroll, utilities, personal loan repayments. Maybe you used a private lender instead of a bank who can’t afford to offer relief during this time?

  • Some sources online might tell you otherwise, but when a landlord has to think about starting the eviction process, or selling a property or maybe moving back into it because she can’t afford to run it anymore, trust me, that’s bad news for the tenants, who could be forced to move on short notice.

  • Most landlords are not multi-national conglomerates - and only have 1 or 2 units - and many of them are struggling just as much as their tenants are, with consequences for both of them.

3. There are still consequences. Remember that when money is short and people are deciding which bills to pay, they usually decide to pay the ones with the biggest consequences first. The bill with the most consequence of not paying is the always the one that pays for the roof over our heads. Rent or Mortgage. And there is only one way to mitigate the consequences of that most important bill, and that’s by paying it on time. By doing this, tenants secure a roof over their heads, avoid late fees, avoid having the owner move in or sell the house out from under them, and in certain circumstances they might be able to take advantage of rent discounts if early and on-time discounts are part of the original lease agreement.

4. Be flexible with payment methods. Do you take credit cards? Paypal? The more options you give, the more chances you have of collecting the rent the best way - on-time and in-full.

5. Offer Help. Pick up groceries for your tenant, and find ways to let them know you care and are willing to work with them. Share links and resources for any relief programs that are offered by the government to help people pay their rent. These resources are available to your tenants and there may be amendments to shorten wait times during a crisis. The government has not, and will never say don’t pay your landlord. Now is the best time to develop strong relationships with good tenants.

6. If your tenants don’t pay, and you can’t collect the rent the best way, remember we are in uncharted waters during this pandemic. Be creative and compassionate. Do what you can with the options you have. If your tenants can prove they are unable to pay, work with them and come up with a fair and reasonable solution that works for everybody. Stay within the laws, and remember, it will all be over at some point in the near future. Government bans on evictions will be lifted and of course you should always make business decisions based on sound economics and past performance, as well as ethics. In the meantime, landlords need to do everything they can to protect their properties and the people who live in them.

7. Don’t panic, try to stay healthy and positive and do the simple things like eating healthy and trying to exercise a bit at home. Be mindful of your state of mind and do your best to make every interaction with your tenants a nice one. Put on a smile when you’re speaking on the phone. It actually will show through your voice on the other side. Heck, smile now, because you’ve got a plan, and everything’s going to be ok!

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