Rent not received, now what?
If a rent payment is not received, you can kindly inquire why the payment was not forthcoming. We fully expect there will be “silent tenants” who do not unilaterally contact the landlord and evade communication, perhaps out of embarrassment and humility.
Some tenants, unfortunately, will be emboldened by the moratorium, falsely thinking that the public health crisis removes any obligation to pay rent. It is this small minority of tenants who may prove problematic.
Other communicative renters will engage in a heart-to-heart conversation with their landlord about a genuine hardship, and we urge some empathy and flexibility in these situations.We suggest the following protocol to guide you.
Once the tenant communicates difficulty in paying the rent because of the economic fallout, the landlord must respond in a proactive, but compassionate way.
This may be an awkward conversation, but the tenant should be asked for supporting documents or other objective information. Some of you have been wondering what is sufficient documentation, and we urge some discretion during this time of need. If you have any questions on what substantiates a financial impact, please contact our offices on a case-by-case basis.
Bornstein Law has always been adamant that landlords should document all correspondence with tenants, and this is all the more important in a state of turmoil.
After the tenant furnishes documents that substantiate a hardship, Bornstein Law strongly recommends that everything is condensed in a Rent Forbearance Agreement.
A moratorium does not erase a tenant’s obligation to pay rent, but may give some latitude to postpone payments. This has to all be buttoned up, however, in a formalized agreement.
We have a template here
Of course, our firm is available to tailor agreements based on the unique circumstances of your business.