Home » OPINION » Columns » PHIL HARDWICK — Mass evictions can be avoided if landlords and tenants communicate

PHIL HARDWICK — Mass evictions can be avoided if landlords and tenants communicate


The month of reckoning is at hand for many landlords and tenants. Big decisions will have to be made. Landlords will have to decide whether to evict or not, and tenants will have to decide whether or not to pay rent. Government at all levels has stepped in to make the decisions for many. For others, there are many factors to consider.

Because of the rapidly-changing situation, landlords and tenants should make themselves aware of laws, rules, and regulations regarding evictions as they may be superseded by comments in this column. Nevertheless, these remarks should be considered as a general guideline on the handling of evictions.

Landlords and tenants may first want to check the CARES Act. It applies to properties that are subject to a federally-backed mortgage loan from Fannie Mae, Freddie Mac or the federal government. It also covers properties that participate in government assistance programs, including but not limited to: housing choice voucher programs, Section 8 project-based rental assistance, rural housing programs and the low-income housing tax credit program. A good summary can be found on the National Housing Law Project website at:

Nationally, almost half of residential renters rent from individual landlords who own from one to 10 properties. According to various news reports, many of the landlords are saying that they haven’t heard from their tenants even though they have attempted to get in touch with them. Many tenants are simply afraid because they have lost their jobs and do not have adequate income to pay rent or they are choosing not to pay rent out of fear. That is a mistake.

Renters who live in multifamily developments, i.e. apartments, apparently will make April payments as normal. According to the National Multifamily Housing Council (NMHC), 91.5 percent of professionally managed apartment households made a full or partial rent payment by April 26 in its survey of 11.5 million units of professionally managed apartment units across the country, up 2.8 percentage points from April 19.

Regardless of what type of housing they live in, tenants who cannot pay their rent should contact their landlords and be upfront with their situation and why they cannot pay. In California, there is even a form on the Attorney General’s website for tenants to complete and mail to their landlords.

Tenants should be honest and resist using misleading or frivolous tactics. Once upon a time, I heard a get-rich-quick promoter tell people how to handle creditors if debtors were behind on their bills. He said borrowers should tell the creditors that they were behind on their bills and couldn’t make all their monthly payments. Tell the creditor, he said, that all the borrower’s bills had been placed in a fishbowl and that each one would be pulled out and paid in the order that it was pulled out. If the creditor was not willing to work with the borrower, then the borrower would not put their bill in the fishbowl. That’s cute, but risky and not recommended.

Landlords should handle delinquent tenants on a case-by-case basis. Although it is tempting to adopt a one-size-fits-all plan such a strategy will probably result in more defaults and evictions. Landlords will have to weigh any and all factors before making a decision to evict.

Real estate is not a so-called perfect market. However, it does respond well to supply and demand over time. Mass evictions would have an effect on the market. The life cycle of mass residential evictions might look something like this:

The tenant can’t pay and is evicted;
The landlord/owner can’t pay the mortgage;
The mortgage servicer can’t pay the property taxes and the insurance;
The lender forecloses on the loan and takes ownership of the now-vacant property;
There is an oversupply of vacant properties;
Rents are lowered, resulting in lower property values;
Investors begin buying foreclosed properties at bargain rates.
Vacant properties are back on the market, with new owners.

Most of the guidance mentioned above applies to commercial tenants as well. Hardest hit is the retail industry, which pays a lot of rent to commercial landlords.

Best case scenario: We get through this by working together. Worst case scenario: Homelessness increases, commercial spaces become vacant, landlords and investors/lenders declare bankruptcy.

As difficult as it may be, it’s time to communicate.

» PHIL HARDWICK is a regular Mississippi Business Journal columnist. His email address is phil@philhardwick.com.


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About Ross Reily

Ross Reily is editor of the Mississippi Business Journal. He is a husband to an amazing wife, dad to 3 crazy kids and 2 dogs. He is also a fan of the Delta State Fighting Okra and the Boston Red Sox.