Homeowners, Renters and Commercial Tenants Are Not Necessarily Created (Treated) Equal In The Coronavirus Crisis!

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For individuals with a mortgage on a house or for those who are renting their current home, some level of immediate temporary relief is being offered by the powers that be!

And, the same type of relief is available to most consumers for credit card debt and auto loans. This, in recognition of the fact that financial hardship for many millions of American households due to the coronavirus crisis is very, very real!

And while this assistance for individuals is not necessarily automatic, there are steps that can be taken to receive it.

For some commercial tenants, however, as you will read in the memo below patience concerning rent that is due is not necessarily going to be in the cards.

This lack of empathy for the players in a sector that is among the hardest hit in the coronavirus shutdown, may very well backfire badly as stores may have no choice but to shutdown permanently, leading to a domino effect of closures.

After all, malls need open stores to drive traffic.

Options for Individuals

Mortgage holders: Contact your loan servicer right now if you think you can’t make your April payment. Fannie Mae and Freddie Mac have already said they are suspending foreclosures on mortgages they guarantee for 60 days. (Source)

Renters: Although various jurisdictions have temporarily halted evictions, you should still call your landlord to explore your options. Often when people can’t pay they retreat and fail to communicate. That’s sure to make things worse when the eviction freezes are lifted. Keep in mind that even if your landlord is able to get a forbearance for their mortgage, you’ll likely have to catch up on the missed rent payments later. (Source)

Credit Cards: If you contact your credit card issuer, you may be able to delay your upcoming payments. But you need to get in touch because payment waivers are not automatic. (Source)

Auto Payments: If your finances have been affected by COVID-19, your auto loan lender may offer payment or debt relief, such as deferred payments or waived late fees. We’ve collected information from many major lenders so you can find out what help they may be offering and how to get it. (Source)

March 25th Letter to a Retail Tenants of a Mall Owned by a REIT (real estate investment trust)!

The overall point of the note that was sent below is that the mall operator has its own bills to pay, and therefore cannot cut the tenants any slack concerning rent.

Smart move, or a shortsighted look at a situation that will only get worse as stores will have to close?

Dear Tenant,

We hope this letter finds you and your loved ones safe and healthy.

As the COVID-19 pandemic has led to the closure of many stores or otherwise impacted the operations of our Tenants, we have naturally had numerous inquiries from Tenants regarding their ongoing obligation to pay rent and charges owing under their leases.

Landlord’s obligation to pay its lenders, utility companies, insurance companies and the like, to ensure the safety and security of the building and maintain the appropriate level of operations, remains. The rental income that we receive from Tenants is essential in order to meet these obligations. All Tenants will be expected to meet their Lease obligations. Further, Tenants are encouraged to look to their business interruption insurance policies to assist in making the Tenant whole.

This letter is without prejudice to any other rights and remedies Landlord has under the Lease, at law or in equity, all of which are expressly reserved.

As we move through this unprecedented time, it is our hope that by being diligent we will all be able to return to normal business operations and continue our successful relationship.

Sincerely,

(Source)