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What to do if your tenants stop paying the rent during COVID?

Published On: February 26th, 2021Categories: Landlord-Tenant

As you must know by now, Governor Murphy signed an order stopping evictions for the foreseeable future, with few exceptions. There was no requirement that the tenant be facing a covid-related financial crisis. There was no relief for landlords, who still have to pay their taxes, mortgage, insurance and other costs even if their tenants don’t pay them. In my view this was an unconstitutional taking, of massive proportions, with no subtlety or thoughtfulness. It was taking a sledgehammer to a situation that needed a scalpel. Tenants win, anyone who owns rental property loses, plain and simple.

So if you are a landlord with just a simple non-payment eviction, or any other type that doesn’t fall into one of the “emergency” categories, what can you do?

  • 1. File an eviction complaint to get in line. First, understand that even if trials are not being held, for now you can still file a landlord-tenant eviction complaint and get a docket number*. You absolutely should file as soon as possible! The courts will open eventually, and when they do, they will start in docket number order. The oldest cases will almost certainly be heard first, so you need to file ASAP to get in line. As it stands at this writing, there have been no trials in a year. So it is likely there will be a 1 year backlog if the courts re-opened today. If you file now, you will hopefully only have to wait a year for a trial. If you wait 2 months, you will be waiting a year and two months at least. So file now and get in line.
  • 2. Filing an eviction has consequences for tenants. The harder the governor and courts make it to evict bad tenants, is the harder it becomes for any tenants to find an apartment. I have countless landlord clients who are leaving apartments vacant because they don’t want to risk having a nightmare tenant and no way of getting them out through the courts. Many more are renting, they have to pay the bills after all, but they are EXTREMELY careful about who they rent to. If they make a bad decision on choosing a tenant, it could cost them literally years of lost rent. Tens of thousands of dollars. The most basic thing these landlords do to protect themselves is background checks on the tenants, for prior evictions. If a tenant has didn’t pay their last landlord, why would they pay their new one? Tenants know this, and most would rather work something out amicably than have an eviction case filed against them. Some don’t care of course, but many do.
  • 3. File a civil complaint (lawsuit) against the tenant. Civil trials are being held. You can sue a tenant for up to $15k yourself using this pro-se packet from the judiciary. If the amount they owe is more, or if the months are adding up and will soon exceed $15k, you would need to file in law division. Some tenants are not collectible now, but a judgment lasts 20 years and can be renewed another 20 years. If you know where they work or have bank accounts, or if you can find out, you can collect now. Or you can just docket it in Trenton and sit back, it will remain a judgment on their record for a long time. They won’t be able to buy or sell property without satisfying that judgment, it won’t be good for their credit, and anyone who searches their name in the judiciary website will see the lawsuit and judgment against them. You might just get paid eventually, but even if not, there are consequences to a tenant having a money judgment in their name.
  • 4. Consider a buy-out. Just do the math, how many months of lost rent do you expect to have, and use that to come up with a buy-out number that would work for you. Sometimes a tenant will take a chunk of change and move, rather than having evictions and civil suits filed against them. You really want to be represented by an attorney for these as they are legally tricky. A major thing to remember is that any buy-out agreement you reach with the tenant is in practice unenforceable. So the tenant cannot get any money prior to handing over the keys, or you are risking they take the money and still don’t leave. So cash for keys is the way to go, and if they need money for their next landlord, make the payment directly to that new landlord so it never touches the tenant’s hands.
  • 5. DO NOT resort to self-help. If you change the locks or turn off the electricity or take other action to try and get the tenant to move outside of the courts, this is almost certain to backfire. Legal services represents tenants for free, and will happily file an order to show cause against you to get the tenant back in or restore services quickly. Landlords don’t get free attorneys, and you will have other costs including possibly violations issued by the municipality. Go through the courts, that is all you can do, and if you are as frustrated as most of my clients are about the eviction moratorium CALL YOUR ELECTED REPRESENTATIVES AND LET THEM KNOW!

* There is a pending bill that would stop even the filing of complaints, and Murphy has promised to sign it but so far it has not yet passed both houses and has been stalled since April 2020. Hopefully it won’t get the support it needs.

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