How to Manage Non-Paying Tenants in Katy, Texas during the COVID-19 Pandemic
With the recent end to the federal eviction moratorium, more than 11 million Americans are behind on rent payments to their landlord. In Texas alone, 600,000 people are behind on rent as of August 2021.
The Texas Supreme Court ruled the CDC’s eviction moratorium unconstitutional in February 2021, and has been hearing eviction lawsuits ever since. Still, many Texas tenants, including tenants in Katy, are still not paying rent. Most of these tenants know the moratorium has ended, but are trying to buy more time by forcing their landlord to file an eviction lawsuit.
It’s hard to determine who legitimately can’t pay their rent
Unfortunately, non-paying tenants are a mix of people who legitimately have no income and others who are just trying to game the system to their advantage. It’s almost impossible to tell the difference unless you do some calling around to find out if your tenants are still employed. However, snooping around in your tenants’ personal lives can get you into hot water in the courtroom, so it’s not advisable.
Instead of trying to figure out if a tenant is lying, try the following ideas to mitigate the situation before it becomes a nightmare. You may not need to figure out who’s being honest if you can bring peace to your tenant relationships while you file for an eviction.
1. Don’t change your mind about evicting someone
The best way to manage a non-paying tenant is to proceed with an eviction. Even if you don’t want to put someone out on the street, you have to protect your property investment. Hopefully, they’ll have friends and family that can help, but either way, you have to put your foot down.
You’ve already lost enough money over the last year and possibly two. If you don’t evict a non-paying tenant, you’ll continue losing money while you struggle to recover your losses over the next decade. That is, if you can pay your past-due mortgage payments.
The sooner you get a paying tenant into your Katy property, the better. The moratorium has interfered with your property rights long enough. Now that it’s over, it’s time to take back control over your investments.
2. Document everything, even if you don’t think it’s relevant
Document everything, even if you don’t think it’s relevant to your eviction case. You’d be surprised to see what kind of information can support your case during an eviction hearing.
For example, if your tenant starts driving a new car, document that. There have been several reports from landlords across the U.S. stating that their non-paying tenants have started driving fancy cars and are seen bringing expensive items into their homes. One landlord saw his non-paying tenant buy three boats during the eviction moratorium.
If you can prove your tenants are spending money, but not paying rent, the judge or commissioner might take that into account when deciding your case.
3. Create a rent forgiveness opportunity
If you really want to help tenants avoid eviction, give them the opportunity to have their rent debt forgiven, in full or in part, on a monthly basis. This won’t work for tenants who are trying to get away with not paying rent, but it will work for some tenants who genuinely want to, but can’t pay their rent.
Ideas for tenants to ‘work off’ some or all of their rent:
- Have your tenant perform minor repairs and renovations around the property if they’re skilled. In most states, you don’t need to hire a licensed contractor to do work unless it’s electrical or plumbing.
- Trade for services. Does your tenant perform services you would buy? If so, ask if they’ll trade services. For example, if they’re a massage therapist, maybe they’ll be willing to trade a weekly massage for rent forgiveness.
- Ask your tenant to do a junk haul for you. Do you have junk around your property waiting for a trip to the dump? Ask your tenant to take your junk to the dump in exchange for some rent forgiveness.
Most tasks and exchanges won’t equal the same dollar amount as the rent, but it’s worth trying to work something out with your tenants. People are generally reasonable and many tenants will appreciate their landlord trying to work with them.
If they can pay partial rent, find ways to reduce their rent. Just make sure you write up a new lease amendment to document your agreement and keep accurate monthly records of your exchanges.
People who genuinely can’t pay rent probably feel terrible or embarrassed. If your tenants aren’t returning your phone calls, that could be why. By reaching out to your tenants with an opportunity to forgive their rent obligations, you’ll help them feel better about their situation, and they’ll feel more comfortable talking to you. You just might be able to create a win-win situation.
4. Stay calm and collected
No matter how heated your conversations get, and no matter what your tenants do or say, stay calm and collected during every interaction you have with them. Remember to record personal interactions whenever possible to prevent your tenant from making unfounded claims.
When you remain calm while your tenant is yelling or making threats, it will increase your chances of being seen as the credible witness in court. Establishing yourself as the credible witness is extremely important and can’t be taken for granted.
No matter how ‘cut and dried’ your case seems, a judge won’t automatically see it that way. Courts are notorious for leaning in favor of tenants, so you need to build as much credibility as possible.
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