NAA Releases Guidance for Rental Property Owners Whose Tenants are Impacted by Government Shutdown
In follow up to our Guidance Memo distributed last week, NAA would like to provide you with FAQs and sample Eviction Holdoff Agreement. We hope this guidance information is useful to you as make operational decisions while this partial federal government shutdown persists.
Please note the following pertaining to the Sample Eviction Holdoff Agreement:
We, the National Apartment Association (“NAA”), provide the attached Eviction Holdoff Agreement only as a sample agreement. This agreement has not been reviewed or approved by legal counsel for use in your jurisdiction. To the maximum extent allowed by state law and/or local ordinance, you agree to release from liability and waive your right to sue NAA, their employees, officers, volunteers and agents (collectively “NAA”) from any and all claims resulting in any economic damages and losses you may suffer or which may result from your use of this agreement. We strongly encourage you to have your local legal counsel review this agreement for compliance with state and local law before you put it to use in your operations.
As always, we are available for any questions you may have. Please contact Senior Vice President of Government Affairs Greg Brown or Senior Vice President of Industry Operations Amy Groff.
Guidance for Rental Property Owners/Managers
On January 3rd, the National Apartment Association released the following information: "the National Apartment Association has prepared the following guidance and resident communications to assist you in working with residents who are affected by the partial government shutdown.
We believe it is important as an industry to help residents who are federal government employees in this difficult time, so that they may stay in their homes. This is only suggested action, adaptable for your use as you wish."
Sample Memorandum to Property Managers:
To: (property manager)
From: (management company)
Re: Guidance on Government Shutdown and Possible Resident Issues
As you are probably aware, the U.S. Government entered a partial shutdown at midnight on Saturday, Dec. 22. The shutdown is now in its second week and almost 800,000 people are either furloughed or working without pay. Though apartment owners and operators cannot allow impacted residents to live rent-free, this situation is unique and the apartment industry is committed to working with residents to bridge this difficult period.
As the shutdown continues it is important to be prepared to assist any residents who are government employees and may have difficulty in meeting their financial obligations. The federal Office of Personnel Management has provided draft communications for federal employees to use with creditors, mortgage companies and landlords requesting a reduction in their monthly payments.
A few things to bear in mind when working with federal employees who are residents and impacted by the partial federal shutdown:
*The length of the partial federal government shutdown is completely unknown and dependent on political factors outside the control of impacted federal employees. Whatever arrangement you make with impacted residents should acknowledge this unknown.
*Traditionally, federal employees impacted by a shutdown receive lost back pay at some point once the government reopens.
*There are numerous options for owner/operators to use in working with impacted residents. Waiving late fees and accepting partial payments during the period of the shutdown can be helpful to residents in the short-term with full payment expected once the federal government reopens and workers have received their back pay.
*It is important to document all agreements or arrangements with impacted residents in writing. NAA has prepared the following letter to assist in drafting a written record of agreements.
If you have any questions or need further assistance, please contact (Mgmt Co. Name).
Sample Letter to Resident:
XXXX, XX XXXXX
Thank you for contacting us regarding the temporary partial federal government shutdown. We realize that during the shutdown, as an affected individual, your income has been furloughed, and you may experience difficulties meeting the conditions of your lease.
We understand the extenuating and impermanent nature of these difficulties, and pursuant to our conversation with you, we are prepared to offer the following options to protect your residency in good standing:
- Provide for a reduced monthly payment of $XX, which defers $XX of your usual full monthly payment of $XX. The deferment will be repaid over XX extra monthly payments of $XX, which will bring you current as of [Month] [Year].
- Offer a split-pay option, where you pay half of your rent on the 1st of each month and the other half on the 15th.
- Forgo fees for late payment pursuant to [section X] of the lease during the time when you are unable to return to work.
We appreciate your initiative, and your directness in contacting us regarding this matter. We greatly value having you as a resident and look forward to a timely resolution of this situation. Please maintain close communication with your point of contact, [name], as the situation progresses regarding your income.
Thank you again for reaching out to us, and please don’t hesitate to contact [name] with any questions regarding this arrangement, or if we can be of any further assistance.