Landlords, we all feel the same fear. Whether you want to believe it or not, your tenants have the same fear too. Nobody wished for this pandemic to happen. Why don’t we all take a step back and reassess ourselves, others, and the situation? Avoid disputes by giving great advice regarding tenant payment plans.
How can I make sure my tenant pays for their rent?
- Suggest Obtaining Government Assistance
- Pay a Small Portion via Credit Card
- Recommend Canadian Emergency Student Benefit
Suggest Obtaining Government Assistance
In light of unprecedented events, the government ensures everyone’s welfare is maintained. In response to the temporary or permanent lay off of some employees by several companies due to the pandemic, the Canadian Government offered the CERB or the Canada Emergency Response Benefit.
So what is this CERB and how can it benefit you as a landlord and your valued tenants? The CERB gives financial support or temporary income support to employed and self-employed Canadians who were directly affected by the pandemic.
Canadians eligible to obtain the support can receive $2,000 for a 4-week duration. If their situation persists, then they would have to re-apply. Of course, there’s a limit. Applying for support may only take up to 16 weeks in total. One more thing you have to note, the CERB is taxable.
Make sure to let your tenant know of these so that they can arrange and plan their next steps. Finally, you must let your tenants know that CERB is a temporary replacement for Employee Insurance Benefits or ERB.
Pay a Small Portion via Credit Card
Swipe now or pay later, or should we say Square now and pay later? Square or Squareup is a secure credit card processor that allows customers to pay for products or services. As a landlord, you can ask your tenants to pay a small portion of the rent via their credit card using Squareup.
It is an American financial service that offers online mobile payment to support online merchants and service providers. Yes, you are not an online merchant but since everything became digital during the pandemic, you can set up a Square account and be smarter in collecting rent by offering tenant payment plans.
Recommend Canadian Emergency Student Benefits
Last but not least on the list of possible tenant payment plans is the CESB. If your tenants are students, collecting rent can make you feel really horrible but we understand that landlording is a business and not a charity. Take things on hand calmly, you can recommend your dear tenants to apply for the Canadian Emergency Student Benefit (CESB) through the Canada Revenue Agency (CRA).
Do your own research regarding the CESB, once you have all the information, sit down with your student tenants, and inform them regarding the government benefit. There is a checklist that will tell you who is eligible to apply for the CESB.
Pro Tip: Here’s What You Should Not Tell Your Tenants
Don’t tell your tenants you are giving them a permanent reduction instead you can say you are giving them rent credit. Between you and the tenant, you can create an agreement in the form of a document or a contract. This is to legally put your agreement into the paper.
The document does not need to be too long. No one wants to read a 10-page agreement that states your intention over and over again. Make it precise and straight to the point. If you are unsure of how to write one, you can ask a professional real estate investor for some tips.
Make sure you mention the particular tenant payment plan they opted to pay you. You can use this for future reference and to your advantage.
Don’t let any crisis or pandemic bring your business down. You’re a landlord for a reason and its because you have the skills to negotiate to make sure everyone walks away happy. If this pandemic offsets your business, get advice. It is better to have a professional’s point of view compared to taking everything at hand.
If you still wish to learn, watch Michael talk about Landlording during this pandemic.
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