Delinquency has not been as extensive as originally speculated, property manager says.
The impact of the suspension of evictions in Florida because of the COVID-19 pandemic hasn’t been as great anticipated, according to one Jacksonville property management company.
“Early on there was great concern that residents would not be able to meet their rent obligations. The rent delinquency has not been as bad as originally speculated, “ said Cynthia Haines, chief operating officer of WRH Realty Services Inc.
“It was reported that April would be dire for our industry. When that didn’t come to fruition, then they said May. Hopefully they continue to be wrong,” she said.
The company manages 17 multifamily communities in Northeast Florida comprising nearly 3,000 apartments.
Haines said property managers didn’t know what to expect when the economy was substantially shut down overnight in March to slow the spread of the coronavirus.
“Even a small decrease in total collections has a big impact on the available cash flow from property operations,” said Haines said.
WRH had less than 0.8% of its residents behind on their rent in March before businesses started closing and people began coming off their payrolls, but Haines said that soon began to change.
April delinquency was 2.1% and May ended at 3.8%, or about 120 of WRH’s 3,000 units. June held steady at 3.8%.
“The majority of our residents have paid their rent. Some have paid partial payments as stimulus or unemployment funds were received. Others have made formal payment plans to get caught up and a few residents have been nonresponsive,” Haines said.
While the delinquency rate remains relatively low, any loss of cash flow affects the day-to-day business for property managers.
According to the National Apartment Association, about 53% of rent collection income pays the mortgage and property taxes; about 27% is used for payroll, utilities and insurance; and about 10% is earmarked for capital expenditures such as repairs and improvements.
“Some of the ways that we have dealt with the lower cash flow was cutting back on capital projects and renovations. We made a decision early on to keep all of our employees regardless of offices being closed to the public and maintenance having to transition to emergency work orders only. We retrained our office teams to work in more of a virtual world and found other exterior maintenance projects to keep our maintenance teams busy over the last few months,” Haines said.
The suspension on evictions is set to expire July 1.
In an interview May 21 with the Jacksonville Daily Record, Mary DeVries, managing attorney at Clay County Legal Aid, said she advises people who are behind on their rent to talk to their landlord. If they have lost part or all of their income because of the pandemic, they should try to negotiate a temporary arrangement that can work for both parties.
That’s how WRH is proceeding with people who are having trouble paying their rent while meeting other monthly expenses.
“We have been committed to supporting our residents impacted by COVID-19 from the very beginning of the pandemic. We not only offered payment plans over the last few months to our residents affected, we waived late fees in April, May and June,” Haines said.
She said WRH has accepted partial payments and identified governmental and community resources to help ensure residents are aware of additional assistance programs available to them.
“The large majority of our residents have been in close communication with us but unfortunately, we do have a very small number of residents who have been nonresponsive and/or noncooperative. Hopefully, those individuals will contact us soon to avoid having to file on them when the moratorium expires,” Haines said.