We’ve combed through shared templates and guidance from Property Managers, Property Management Vendors, and Outsiders to help Property Managers respond to the evolving COVID-19 outbreak.
This guide is designed to give you specific, tactical actions you can take right now to mitigate the spread of virus, set expectations with various parties, and better prepare for what’s to come.
What you’ll find:
This playbook has guides, checklists, and templates to help you:
- Adapt your day to day practices
- Set expectations and provide assurance with various parties
- Maintain business continuity
- Better prepare for what’s to come
Have a useful checklist, script, template, or playbook? Send it to us at email@example.com and we’ll add it to the general resources section! This is a live blog that will be continuously updated to evolve to the circumstances.
IF YOU JUST WANT THE CHECKLIST (in an easier to use format), DOWNLOAD HERE.
New Considerations Since 3/16/20:
- Exploring the SBA Loan Program to weather the storm and cover payroll
- Pushing lease extensions for soon to expire leases. Tenants don’t want to move right now. Best for tenants, owners, and your company.
- The importance of documenting: owner rent exceptions & employee time off to cover your bases and benefit from tax credits, respectively.
- NARPM, suggested legislative action (fill out form, available in general resources)
Changes to Day to Day Practices
Dealing with late payments
A recent poll shows that already, 18% of employees have been laid off or have had work hours reduced. Additionally, the Fed’s move to push $700B into assets signals one very unfortunate, yet inevitable thing: a recession of some sort is coming. Late payments will come with that.
This is a shit situation, and there’s a lot to think about here:
- In the end, the person that’s paying you and that you represent from a professional standpoint is the owner. They have mortgages to pay and could easily lose work themselves.
- In many instances, it will be easier to work with the tenant on a payment plan than it will be to evict.
- If your management fees are reliant on you collecting rent, consider quickly amending your agreement to make sure you’re still getting paid for the work you’ll be doing.
- Every person has a story, and every person is a person. We need to all fight to remember that to keep some humanity involved in this crazy time.
- Check your business insurance to see if you are covered for rent loss in this event, and if so, what you’ll need to do to ensure you can make claims
- Advise owners to check their rent guarantee insurance (if applicable) and whether or not they’re covered if tenants default on rent
- It might not make sense to proactively reach out to tenants on this, but be sure to create a process that will allow you to respond to late payments: all tenants still must be treated the same. Have your process ready.
- Consider temporarily waiving late fees
- Consider creating payment plans
- Consider offering to add a roommate to lease without additional fee
- Consider allowing to break lease without lease-break fee
- Consider allowing to pay rent via credit card without fee
- Consider allowing to remove parking/storage unit from lease without paying fee
- Have a process and document that process so you’re not caught off guard.
- Prepare your owners for what’s to come (see templates below for owner communication)
- Get any owner exceptions in writing -- don’t let an over the phone conversation come back to bite you
- Review your management agreement. If fees are reliant on rent collection, consider amending.
Depending on where you are, the technology you’ve adopted, and a number of other factors, your team will have a different approach.
As small businesses, if even 2 or 3 of our employees are affected, we’re out a substantial portion of our staff. It’s important to keep them safe to maintain business continuity.
Here are some ways that you can adapt your office/work processes to to maintain business continuity:
- If you don’t think you’ll make payroll, if that may be a risk, or if you want to capitalize on low to no interest rate loans, it may be worth further examining the SBA loan program
- If you’ve moved most things online, strongly considering moving to a WFH environment in the interim, especially if you’re in a hotspot
- If you decide to maintain an in-office approach, practice in-office social distancing and proper office hygiene: move desks further apart
- If one person gets sick, it could devastate your office.
- Work will be more limited in the short term, look at how you can effectively use this time to drive business value
- Talk to your banker about the SBA loan program to cover up to 6 weeks of payroll and/or go to SBA directly (assuming your area has been deemed a disaster area) for a longer term loan
- Determine if you can transition your team to remote work
- Everyone already knows to order wash hands, hand sanitizer, etc, but here’s a check to make sure you’ve done it
- Establish a process around what an employee should do if they show symptoms or have come into contact with someone who is showing symptoms. Make sure it’s explicitly established.
- Evaluate skill sets, newly freed up time, and opportunities for the two. There is opportunity to drive business value even though there may be fewer tasks in the short term.
Amidst the outbreak, tenants, vendors, and employees may be worrisome about interacting with others. General guidance is to limit contact unless absolutely necessary.
Here are some ways that you can adapt your maintenance process to ensure property protection while limiting COVID-19 exposure:
- Limit maintenance to emergencies only
- Postpone mid-tenancy inspections or temporarily consider having tenants perform them for you
- Collect non-essential maintenance orders and plan for a further date. A logjam is coming, so eventually you’ll want to try to distribute evenly.
- For PMs with in house maintenance teams, this will be tricky. Understand what other work they may be able to do right now.
- At move-out, ensure proper disinfection process has been executed
- Determine which maintenance requests are essential, including mid-tenancy inspections
- Notify tenants that only essential maintenance requests will be fulfilled, others will be postponed (see below for tenant communication templates)
- Notify owners that only essential maintenance requests will be fulfilled, others will be postponed and of the actions you’re taking to ensure the property will still be secured
- Establish move-out disinfecting process
- (if applicable) Review in house maintenance staff skill set, capacity, and maintenance related work that needs to be done. Reorient time aggressively and explicitly to ensure you leverage your human resources in a productive way
Depending on the market you operate in and the types of properties you manage, you may have seen a sharp drop off in prospective tenants, no dropoff at all, or even an increase in tenants looking to move before things get worse.
In any case, it’s likely that all markets will converge to a single point: fewer people will be looking to tour properties.
Here are some ways that you can adapt your showing process to increase lead flow while limiting COVID-19 exposure:
- Limit in person showings to 1:1. Stop group showings.
- Capture a video walkthrough of the property to allow prospective renters to see the property virtually
- Use self showings
- Perform FaceTime showings
- Right now, people don’t want to move; try to avoid move-outs now more than ever.
- Try to extend your soon to expire leases as soon as possible.
- Determine how you’ll adapt your showing process, likely looking to an option above.
- If you opt for in person showings, make sure to have a communication process with prospects, having them confirm they are symptom free.
- Consider stopping all occupied unit showings; update relevant parties accordingly.
- Ensure you have a disinfection process in place once showings are complete and move-in is ready.
- Proactively communicate to your owners that, because of circumstances, they may see a decrease in interested renters and this may lead to longer time on market (see owner communication below where it’s included in a template)
- If you’re moving away from in person showings, make sure to add a “site unseen” addendum to your lease so the lead can’t flip flop.
Priority #1, as is typical: keep your owners happy and confident that they’re using the right Property Manager. Now more than ever, it’s important to both take proactive steps and proactively communicate so there are no surprises days, weeks, or months from now.
Here are some things to think about as you communicate with your owners:
- Assure your owners that you are fully available and are prepared to respond to the outbreak.
- Discuss proactive steps you’re taking, in particular how it might affect them.
- Set expectations, especially as it relates to rent payments.
- Inform owners that things are changing by the minute and more updates will come (continue to send updates).
- Add local updates as applicable.
Templates/Actual Letters Sent:
- Letter by Randy Huntley from Property Management Advisors offers candor, showing that many PMs are still getting a better grasp as to what’s going on, but they’re making proactive changes and continuing to learn. He presents questions that a number of PMs have been asking across the industry and summarizes his company’s actions: Download it here.
- Allegiant Management Group updates their clients with how they’re proceeding given the circumstances, setting expectations as to what will and will not happen, how they’ll continue to support owners during this time, and relevant local updates. View it here.
- (EDITOR’S PICK) Amanda Whitson, Director of Property Management at Coldwell Banker Premier assures owners that their team is available, sets expectations that some tenants may come upon times where they won’t be able to pay and to prepare accordingly, and notest hat non-essential maintenance and inspections will be postponed View it here.
Tenants will have varying experiences. The key focus here is to update tenants on day to day practices that will affect them.
Here are some things to think about as you communicate with your tenants:
- Update tenants on the things that will affect them, like changes to maintenance protocol, office availability, occupied showings, etc.
- Todd Ortscheid of GTL Real Estate recommends not pointing tenants towards charities or other funds that can help them at this time -- that may result in backlash. Rather than proactively notify, we recommend having a process in place that will allow you to respond to inbound notices of late payments.
- On an ongoing basis, as things continue to evolve, keep tenants in the loop as to any changes that might affect them.
- Reassure tenants that when your team will be interacting with them, they’ll be doing so in a safe way.
Templates/Actual Letters Sent:
- (EDITOR’S PICK) Allegiant Management Group updates their tenants as to what’s going on, how things may change from a process standpoint (inspection, maintenance, showings) and provides local updates View it here.
- Morgan Detvay at Rental Management One updates tenants on changes to their day to day interactions (contacting the PM, maintenance requests, changes to available payment methods) Download it here.
- Amanda Whitson, Director of Property Management at Coldwell Banker Premier assures tenants that their team will be fully available, makes notes about day to day changes around maintenance, inspections, rent payment methods, and requests to be notified if anyone has been infected or has been in contact with an infected person. View it here.
- (EDITOR’S PICK) Preston Walls of Wall’s Property Management offers his residents a way to help ease some of the financial burden in a very diplomatic way: View it here.
All Party Communications
Templates/Actual Letters Sent:
- Lyons Property Management reassures Owners, Tenants, and Vendors that they will be available, and updates them on their day to day changes View it here.
- (EDITOR’S PICK) Brian Dodd of Sparrow Realty & Rentals updates all of his relevant parties, letting them know of day to day changes Download it here.
For the most part, the above was taken from the sources below.
- NARPM Legislative call to action
- The Property Management Mastermind Facebook Group is the best place for ongoing discussion. Brad Larsen and Matthew Whittaker will also be hosting a daily event on the page to discuss updates.
- NARPM Statement & Position
- NAR Realtor Guide
- Jo-Anne Oliveri, Global PM consultant posts these slides to help you consider every angle
- IREM Pandemic Response
- Matthew Whitaker (gkhouses), Duke Dodson (Dodson Property Management) and Adam Wonus (Atrium Property Management) discuss how they are dealing with the outbreak, in this video
- COVID-19 related legal forms form Harry Heist
- Marc Cunningham: should you evict a tenant during the Coronavirus event.
What Showdigs is Doing to Respond:
- Suspending occupied unit showings via our Agent Network until March 31st
- Suspending mid-tenancy inspections via our Agent Network until March 31st
- Released new FaceTime Tour support via our Agent Network
- Suspending group showings; 1:1 showings only.
See all details at our live blog here: https://www.showdigs.com/post/covid-19-response