When tenants have the inability to pay rent due to a demonstrated hardship related to the coronavirus, some documentation and protocols are in order.
As a public service, we provide complementary documents and suggestions on how to navigate these tumultuous times and properly engage in a conversation with renters who are impacted by the coronavirus outbreak.
To our concerned clients, partners, and friends tasked addressing the novel virus in rental units, 

Bornstein Law has fielded many requests by clients regarding the assertion of some tenants who say they cannot pay rent because of coronavirus-related hardships.

To be sure, the pandemic has impacted everyone, some more than others. Both landlords and tenants have mutual responsibilities during this crisis, and this balancing act should be approached with compassion and attorney guidance given your unique relationships and circumstances.

In this venue, however, we can provide a generalized framework and we will isolate San Francisco for the time being - if you fall outside those 49 square miles, we would expect similar protocols in other jurisdictions. 

In light of San Francisco’s moratorium on evictions in non-payment of rent cases, we recommend the following guidelines for landlords and property managers to follow when the tenant requests a rent deferral. 
Broaching a frank conversation with the tenant is your first and most compelling step.

Owners and property managers should engage in compassionate, but firm outreach efforts - communication is key to avoid any ambiguities with new rules and expectations.

We have a letter prepared that serves as a springboard.
SAMPLE RENT FORBEARANCE AGREEMENT

For informational purposes only.
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Managed chaos
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.
IN PARTING
THOUGHTS
Although the coronavisus has thrust our community of owners, property managers and real estate professionals into unknown territory, you can absolutely count on our continued and amplified guidance during uncertain times.

In response to the emergency, Bornstein Law is committed to providing the most timely information and will stay in touch. Certainly, feel free to preempt our updates by contacting our office with any questions or concerns.

This, too, shall pass, but until it does, please stay safe.