Keeping Up with Regulations on Evictions and Collections

The pandemic continues to affect some multifamily renters’ ability (or willingness) to pay rent. But what can you do when regulations limit your options for collections and evictions?

In a recent webcast, Jay Parsons of RealPage interviewed three multifamily executives to learn how their companies are handling non-payment of rent in these tricky times.

Playing by the rules

In some cases, it’s hard to even know exactly what the latest regulations are covering collections and evictions. The regulations can differ not only per state but even in different counties in a state. Some moratoria are set to expire over the summer; in others, they extend over a longer period.

Maria Banks, President, and CEO of AMLI Property Management had this to say about the confusing situation:

“It is very challenging. I would say it’s almost a full-time job for a number of people. We are in nine different markets. Sometimes the county has different jurisdictional requirements, and sometimes a municipality’s regulations may differ from the county ones. The rules might affect whether you can charge month-to-month fees, when you can send an account to collections and when you can evict. Keeping up with it all is very time consuming and challenging.”

Tammy Freiling of Kairoi Residential says her company has been depending on their legal eagles. “We’re blessed to have an outstanding leader overseeing our legal and risk management group,” she says. “What I’d say to those who don’t have an internal resource is that there are a lot of very capable law firms out there with people dedicated to monitoring all of this.”

“Not all of the government websites are user-friendly,” she adds. “They don’t always update them promptly, and the information you need can be hard to locate. So it really does take someone devoting a lot of their time to keeping up with the regulations.”

Freiling says her legal department has partnered with a law firm that provides Kairoi with a “COVID order tracker.” “It lists every property in our portfolio, the city, state, and county jurisdictions it falls under, and what the resulting requirements are.”

Working with residents to avoid evictions

One theme that appeared consistently in the webcast is that these multifamily leaders are doing their best to work things out with residents rather than evict them or send them to collections after they leave with a balance owed.

“If somebody really has an inability to pay, we’re trying to find the right solution for both parties,” says Maria Banks. “We were using deferred payment plans for a while, but have started trying to back off from that. Where there’s no alternative, we are getting ready to stand in line with everyone else filing evictions by jurisdiction. But by working with lots of residents to come to an arrangement, we feel the backlog won’t be as extreme as we thought it might be early in the pandemic.”

Laurie Baker, an executive vice president at Camden, says it’s been much the same at her company: “If they want to live with us and work with us, we want to work with them,” she says. “The last thing we want to do after having built all this goodwill with residents, being there when they need us and even establishing a Resident Relief Fund, is turn around and evict them.”

But, she says, there are those residents who have simply “gone silent.” They’re not paying their rent or answering their doors, phone calls, or emails. “We’re having the most trouble with this in California and South Florida,” she says. “In these cases, you get back to the challenges of changing regulations. For example, Los Angeles recently enacted legislation that ties our hands in enforcing rent collection.”

Adjusting collections

Not surprisingly, there are more people than usual moving out of apartments with unpaid balances. So what are properties doing about this?

Maria Banks says that AMLI has modified its collections policy. Where previously they’d send an account with a specified balance to collections 30 days after move-out, it’s now been changed to 60 days. This, she says, gives the company more time to evaluate any restricting regulations.

Banks explains: “I was hoping early on that we’d be able to just send our collections to our collections partners and let them deal with the regulations, but we’ve seen that the onus is on us in certain jurisdictions where we can’t even send an account to collections in the first place and rely on their expertise.”

As of this posting, the future course of the pandemic continues to be unclear. And even if it subsides in one area, it is quite likely to rise in another – as is already happening. The situation is likely to keep property managers scrambling to put together strategies for collections and evictions as legislation evolves. Learn more by listening to the webcast by clicking here.