FAYETTEVILLE -- The rent is due for a lot of people struggling financially because of layoffs, furloughs and business closings caused by covid-19. That's a problem for tenants, landlords and property managers.
The first of April was the first time since the coronavirus outbreak turned the economy on its head that past due notices could be headed to the mailboxes of thousands in Northwest Arkansas and millions around the country.
A roof over the head is one of the basic needs in life, but more than 10 million applied for unemployment benefits during the past two weeks, according to the U.S. Department of Labor.
The unemployment rate for March jumped to 4.4% from a 50-year low of 3.5%. Last month's losses were likely larger because the government surveyed employers before the heaviest layoffs hit in the past two weeks.
Many state and local governments around the country are putting evictions on hold while renters await unemployment money and their federal recovery checks.
Gov. Asa Hutchinson said recently he's not inclined to order a moratorium on evictions, because state courts are closed to all but essential proceedings and landlords he's talked with are willing to work with tenants.
"So, when I see a need for it, we will do it. But, right now, there is a practical moratorium, so I think there's a good accommodation between the landlords and the tenants to work through this," Hutchinson said Thursday.
Sweetser Properties, which has 820 apartments, some houses and condos and more than 2,000 tenants in Northwest Arkansas, is willing to work with cash-strapped tenants as long as they're making an effort to pay, according to Bert Morris, who handles much of the rent collection and bookkeeping.
So far, few have actually asked for help, she said.
Morris' biggest issue last week was the number of people who were paying their rent. Because the Sweetser offices are closed to the public, a lot of tenants were calling in to pay with bank cards, swamping office staff.
"It's amazing. There's a lot more of them than I really expected because so many of our tenants are servers and they're about the first ones that got laid off," Morris said. "And, a lot of them have called and told me, to the effect of, I have this month's rent, but what if I'm late next month? I explain to them that that's perfectly all right, if you just let me know, and, there'll be no late fees."
Lindsey Management, considered the largest property management firm of multifamily housing in the state, including about 13,000 units in Northwest Arkansas, declined to field specific questions Friday but released a statement from James "Lyndy" Lindsey, chief executive officer.
"In an effort to assist those residents that have lost their jobs due to the impact of the coronavirus, the apartment communities will allow more time to pay rent without charging late fees," according to the statement. "We hope the best for all of America during this trying time."
Jerry Allred, owner and operator of Allred Property Management for more than 30 years, said he's still trying to get a handle on what's happening on both sides of the issue. Allred manages and maintains some 550 houses and condos in Benton and Washington counties on behalf of landlords, many of whom live out of state.
"It's almost an hour-by-hour, just wait-and-see. We're going to give everybody extra time if they need it," Allred said of renters. "As long as they have taken some steps to get some federal help, then we're going to work with them until there's nothing else we can do."
There are about 75,000 renter-occupied housing units in Washington and Benton counties, which includes apartments and single-family homes, according to the Northwest Arkansas Regional Planning Commission.
Benton County had 32,833 renter-occupied housing units, that's 32.8% of all housing units in the county, according to Mervin Jebaraj, director of the Center for Business and Economic Research at the University of Arkansas.
In Fayetteville, where university students skew the numbers higher, 2018 census data showed 42,140 renter-occupied units, which represented 46.8% of all housing units in the county, according to Jebaraj.
Allred said renters may think they don't have to pay rent because the federal government put a hold on evictions until the end of April as part of the recent stimulus package for tenants in properties that are part of government programs or that have a federally backed mortgage loan.
"Some of the tenants are thinking that, because we can't evict for 120 days, that there's not rent accruing. That just isn't the case," Allred said. "It's still going to be due."
Allred said he received some rent payments Wednesday but also had a number of calls from people asking for more time. Allred said he expects his business to take a pretty good financial hit before it's all over.
"We're a fee-management company. We charge all these owners a fee to manage and take care of their property," he said. "If the tenant doesn't pay their rent, then we don't get our fees to pay our staff, and then the owner doesn't get the balance to make his mortgage payments. So, if the tenant doesn't pay the rent, it trickles down quickly."
Allred said the consensus right now seems to be to try to survive and deal with the collateral damage later.
"From my perspective, it's better to get what we can to help us get through this and then kind of see where it all comes out," he said. "But, if somebody gets three months behind on their rent, they'll never get caught up."
There are two ways to get evicted in Arkansas: civil eviction and criminal eviction.
Arkansas is the only state with a criminal eviction statute. When a tenant is occupying a property and refusing to pay rent, the tenant is committing a crime in Arkansas by stealing from the landlord. That's considered a civil matter in all other states.
Allred said he seldom uses the criminal version because civil eviction generally takes less time than criminal eviction. Civil eviction enables the landlord to begin the eviction due to any significant breach of the lease or rental agreement and allows the collection of back rent, attorney fees, damages to property and the pursuit of other civil remedies.
Washington County Circuit Judge John Threet said evictions aren't considered "essential proceedings" under the Arkansas Supreme Court's recent order limiting most in-person court proceedings during the pandemic. He added most civil evictions don't require a hearing anyway because most aren't contested.
"The Supreme Court didn't suspend the law on evictions," Threet said. "But, if the defendant doesn't respond and doesn't file an answer, then that would be default and no hearing is required."
Washington County Circuit Clerk Kyle Sylvester said last week civil evictions continue to be filed in his office, but he hadn't yet seen a noticeable spike.
• Arkansas is the only state in the country where landlords don’t have to provide a habitable dwelling. Landlords are also not required to make repairs, unless it’s stated in the lease. Renters cannot withhold rent for any reason.
• Leases can be long and filled with confusing legal jargon. Be sure to read a lease completely before signing. Make sure you’ll be able to stay at the residence for the duration of the lease — usually the only way to get out of a lease is active military duty.
• Most landlords collect a security deposit to cover damages outside of normal wear and tear for when you occupy the residence. If a landlord owns six or more properties, the security deposit cannot exceed two months’ rent. Renters are entitled to get their deposit back within 60 days of the lease ending, minus any amount subtracted for repairs. Renters must receive a list of the repairs done and costs.
Source: Legal Aid of Arkansas/UA Off-Campus Student Services
Eviction in Arkansas
• Civil eviction, also known as unlawful detainer, is the default method to reclaim possession of property if a tenant is violating the rental agreement. Civil eviction starts with a three-day notice to vacate. If the tenant doesn’t vacate, the landlord files a lawsuit seeking an eviction order or writ of possession, plus a judgment for the amount owed. The tenant has five days to respond and explain why he shouldn’t be evicted. If the tenant fails to respond, the landlord receives a writ of possession to be served by the sheriff to evict the tenant. Civil eviction allows the landlord to collect damages caused by breach of the lease, court costs and attorney fees. It also allows the landlord to garnish wages or take other steps.
• Criminal eviction begins with a 10-day notice to vacate and an affidavit by the landlord that prosecutors use to issue a warrant of arrest for the tenant. The charge is a misdemeanor. After the warrant is served, a court date is set, a hearing is held and the tenant enters a plea. The only defenses are that the rent was paid or that the tenant moved out. A guilty plea generally results in a judge ordering the tenant to vacate by a certain date.
Source: NWA Democrat-Gazette
NW News on 04/07/2020
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