Evictions During COVID-19: Landlords' Rights and Options When Tenants Can’t Pay Rent

Tips, resources, and advice for landlords whose tenants aren't able to pay the rent due to the coronavirus outbreak.

By , Attorney UC Berkeley School of Law
Updated 1/05/2022

Many renters are facing financial challenges resulting from coronavirus-related business shut-downs, furloughs, layoffs, and stay-at-home orders. The longer this crisis goes on, the more likely it is that many will not be able to pay their rent. When renters default on rent, landlords suffer, and might not be able to meet their own financial obligations, such as making the mortgage payments on the rental property.

Here are some suggestions about how landlords can mitigate the financial impact of tenant defaults during the COVID-19 outbreak.

Terminations and Evictions

Under normal circumstances, when tenants don't pay rent, landlords have the option of terminating the tenancy (by serving the tenant with either a pay rent or quit notice or an unconditional quit notice, depending on the applicable laws). When tenants don't pay the rent or move out by the deadline given in the notice, landlords can then file an eviction lawsuit to have the tenants physically removed from the rental.

However, health and safety concerns due to COVID-19 have led many states, cities, counties, and courts to place moratoriums on evictions. The scope of these temporary bans on evictions varies greatly: some have banned any and all action relating to evictions, while others simply postpone hearings on evictions until the court can arrange a hearing via telephone or video.

If you are a landlord in an area with an eviction moratorium, you might still be able to file eviction papers with the court, but your case might not be heard for a while. However, even if there are no bans in place, evicting tenants who can't pay the rent due to the coronavirus crisis probably shouldn't be your first recourse. Aside from optics (you don't want to get a reputation as the ruthless landlord who booted tenants out of their home in the middle of a stay-at-home order), if you remove tenants right now, you're going to be faced with having to disinfect the rental, advertise the rental, screen new prospective tenants (of which there might be very few), sign a new lease or rental agreement, and get the new tenants moved in—all while taking measures to abide by emergency guidelines and health and safety measures.

Consider the following options instead.

Evaluate Your Personal Financial Situation

Take a moment to evaluate your own finances. As dire as it sounds, it might be time to take stock of what could happen in a worst-case scenario. Most landlords have likely considered the situation where tenants don't pay rent, as this can happen at any time. But there's no denying that this is a different situation—what will happen if your tenants can't pay for a long time, and your options for finding new (paying) tenants are slim?

Your assessment of how this worst-case scenario will affect your ability to pay your mortgage (if any) and your personal bills will inform how you respond when your tenants can't pay their rent.

  • If your financial situation looks grim: If your ability to pay the mortgage on your rental property hinges on month-to-month rental income, you should take actions to prevent your own default This includes options discussed below, such as contacting your lender and proactively seeking arrangements with tenants that allow them to make at least partial payments.
  • If you have a few months' reserves: If your personal reserves or financial position won't feel too much of a pinch if tenants aren't able to pay rent for a while, you still might have to make some compromises to retain good tenants. If you have tenants who have previously been reliable and are simply finding it hard to make ends meet currently, do what you can to take some pressure off them—see the discussion below about working out a temporary solution with tenants.

Try to Work Out a Temporary Solution With Tenants

Depending on how desperately you need to receive income from your rental, you have a few options for working with tenants who aren't able to pay rent because of COVID-19. Consider the following possible arrangements.

  • Forgive rent. If your situation allows for it, you could waive rent for a month, with an agreement to revisit the payment arrangement on a certain date. A landlord in Bakersfield recently did this for his tenants.
  • Postpone rent. You could offer to postpone rent payments for a month, with an agreement that it will be repaid. Your repayment arrangement could state that the rent owed could be spread out over time, paid all at once, or paid when (if) a stimulus check
  • Reduce rent. If you can, consider dropping the rent temporarily to a level that enables you to meet your obligations but forgoes profit for the time being. For example, if you normally collect $1200 a month, but your mortgage is $900 a month, you could temporarily drop rent to $900 to make sure you at least don't get in trouble with your lender.

Before deciding to make any of these adjustments, try talking to your tenants. Ask them straight out what they think they can make work. If you're able to accommodate their suggestions, chances are higher that they will do everything they can to hold up their end of the bargain. Be sure to put any agreements in writing, preferably as an addendum to your current lease or rental agreement that includes all details of the arrangement.

Look for Outside Assistance

Even if you think you can float a month or two without rental income, you still might want to consider taking some measures now to protect your position in the event that the coronavirus crisis lasts longer than your cushion can handle. If you're already feeling the pinch, take these actions immediately.

Attend to Your Mortgage

At this point in the COVID-19 crisis, most private lenders are willing to work with borrowers to ensure that they don't lose their homes. Call your lender directly and ask what steps it is taking to assist borrowers who can't meet their mortgage obligations due to the coronavirus pandemic.

Look Into Property Tax Breaks

Some states and counties are extending the deadline for paying property taxes, or cancelling late fees and interest. Check your county's tax assessor's website to see if this is an option where your property is located.

Seek a Loan

Consider seeking a loan from family, friends, or private lenders. The U.S. Small Business Administration might be another source of assistance—its disaster loan assistance web page has a wealth of information. You can also contact your regular bank or credit union and inquire about what assistance it can offer.

Research Options for Your Renters

Some areas are beginning to offer rent vouchers or emergency funds to renters in need. For example, the Pennsylvania Apartment Association is collecting donations for funds to give to renters who can't pay rent. Currently, renters' needs are getting a lot more attention in the press than landlords' needs, and there are already a lot more resources being made available for renters. It's in your best interest to research these options and bring them to your renters' attention—do what you can to help your tenants pay you.

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