In response to hundreds of thousands of Californians losing their jobs due to coronavirus, California governor Gavin Newsom issued an executive order that authorizes local governments to halt evictions through May 31st.

The executive order is sure to provide renters with some relief because, with the first of the month just a day away, it’s likely that landlords in California are going to start finding out tomorrow that most of their tenants will be either late paying rent, or unable to pay it at all.

Recognizing that landlords run businesses too, the governor’s executive order does not prohibit landlords or property management companies from collecting back rent.

“People shouldn’t lose or be forced out of their home because of the spread of COVID-19,” said Governor Newsom. “Over the next few weeks, everyone will have to make sacrifices – but a place to live shouldn’t be one of them. I strongly encourage cities and counties to take up this authority to protect Californians.”  – Governor Newsom

Will The Executive Order Be Extended?

 The big question that most landlords and tenants want to know is will the governor extend California’s moratorium on evictions through May 31st? The answer to this question is too soon to tell since most counties across California are still dealing with Coronavirus and the cases seem to be growing by the day, but there is a general hope within the state that cases will have declined significantly by May 1st so that the state can get back to normal well before May 31st.

What Should Owners Do In The Meantime If Their Tenants Are Late Paying Rent?

Coronavirus is a once-in-a-lifetime catastrophe that affected everyone in the world in some way, especially in California.

With the average owner having bills, mortgage payments and other expenses related to their rental properties that they have to pay every month, owners want to know what is the next step that they should take if their tenants inform them that they are unable to pay the rent next month?

The answer to this question is not an easy one. The most productive thing that every landlord should do right now is to reach out to their tenants to find out if they are currently working and most important all if they will be able to pay their rents or not.

If a tenant is unable to pay their rent, a landlord should work out an agreement with he tenant that they will pay some of the money right now while deferring the remaining balance that’s owed over 12 months. This strategy will enable the landlord to collect money now that they can use towards paying their mortgage and other expenses related to the rental property.

Let’s say it’s a tenant is unable to pay anything towards their rent, in this case, if the owner doesn’t have any cash reserves to help him get through the period that the tenant is unable to pay their rent, the owner should contact their lender to find out if they qualify for forbearance so that they can avoid foreclosure.

Contact 36 North Property Management

To learn more about what’s happening with the rental market in California following the onset of coronavirus, or to speak with us about the property management services that we can offer you, contact us today by clicking here.