The pandemic has been difficult on landlords but it nevertheless highlights the importance of working with tenants who, because of job loss, were incapable of paying rent on time and finding solutions.
Chris Graham, co-owner Shoreline Property Management, says his firm managed to get ahead of the problem and still had a 93% collection rate, down from 98% pre-pandemic, at the peak of its tenants’ job losses.
“We got ahead of things a little bit here,” he said. “We sent a letter out to all of our tenants saying this will be an issue and ‘We understand that you may be out of a job and it might be more difficult to pay, so give us a call because we’re all in this together.’ That sparked a lot of contacts.”
Shoreline—whose owners run Palm Tree Investments, which invests in the multifamily sector—frequently reached out to municipal government agencies across the Ontario jurisdictions in which it has rental properties—Barrie, Wasaga Beach, Midland, Brighton, Trenton, Belleville and Kingston—inquiring about programs to help tenants. The company established payment plans for its tenants, which were staggered for the most part.
“Some would dip into savings, but there was a lag time between the issue we were going through and CERB [Canada Emergency Response Benefit] kicking in and giving people the money they needed to get by, and that lag time was the highest anxiety-inducing side of it,” Graham said. “If it was a couple of hundred bucks bi-weekly, great; we still need to make sure we get caught up, though, but we weren’t going to start chasing down our tenants. Instead, we worked with them.”
Shoreline was sympathetic to the plight of its tenants who were unable to pay their rents, but it had its own mortgages to pay. Thankfully, Graham says, mortgage deferrals were lifelines of sorts.
Hayth Property Management’s Randy Hayer says that dealing with tenants during the pandemic required compassion and a gentle touch. Complicating matters is that many tenants were reluctant to allow visitors into their apartments because, at the inception of the pandemic, few understood how dangerous COVID-19 actually was.
“We haven’t seen anything like this in modern times; everyone was learning on the fly,” Hayer said. “The property owners we had as clients were mostly understanding so long as they received some payment because they didn’t want to risk defaulting on their mortgage payments. They reduced rent in many cases.”
Property management companies typically refer to tenants who don’t pay rent to collections agencies, often after a single missed payment, but Hayer says that unusual times call for different approaches.
“We dealt with students a lot and they usually had nowhere else to live. We’d break up their payments into instalments over the year for the months that they missed. We’re human and we understand their plight because we have families ourselves, so we didn’t want to put people in impossible situations. We made sure the tenants were on board with our plans. It’s important to set people up for success, not failure.”