San Rafael–It has been three weeks now since April 1 and judging from the feedback I’ve received from Marin County landlords, there are many cases of nonpaying tenants across the county. Most have been lay offs or furloughs from service industry workers (restaurants, bars, offices) and others have been business owners who own buildings with leased retail spaces and tenants that have been forced to close their doors due to the shelter in place order.
By now, you have probably heard from the tenants that cannot pay and hopefully you have worked out terms for a deferred payment and the future collection of the back rent. Since we are coming up to the second month of this crisis on May 1 I would expect that there will be a wave of new tenants that have been laid off and haven’t yet received unemployment compensation. The State of California is three weeks behind awarding compensation to the 3.2 million workers who have applied.
Enclosed is a form recently issued by the California Association of Realtors that you can use or modify to get an agreement in writing from your tenants. Be sure you sign and date the agreement should you need to produce that in court if you end up going to court to resolve the issue of deferred rent.
If you have a complicated issue with a retail tenant, such as a restaurant or bar, consult with a local real estate attorney to decide how to approach the subject of rent, back rent, or operating expenses that may be part of tenant’s lease. I would recommend contacting on of two local attorneys that are active in counseling landlords right now. They are David Hellman in San Rafael and Len Rifkind of the Rifkind Law Group in San Rafael.
Going forward after the shelter in place is lifted, expect that it will take several months before the full economic effects of the crisis have hit. But be prepared for a “new” normal that will look nothing like the booming economy we have been used to for the past decade.