By Bob Sanders

NH Business Review

April Fools’ Day is no laughing matter for New Hampshire landlords, who are discovering that many checks are not in the mail and are not coming soon – and there is very little they can do about it because eviction is no longer an option.

And some are asking the state and federal governments what can be done about it.

On March 16, Gov. Chris Sununu ordered a halt to all evictions, foreclosures and utility shutoffs, but made it clear that everyone was still obligated to pay. However, many tenants can’t pay, or think they don’t have to.

“The day he issued that order, I get 45 calls that they are not going to pay the rent because the governor said they didn’t have to. It’s a total misinterpretation,” said Manchester developer Dick Anagnost, who owns several residential and commercial buildings in New Hampshire. After reaching out to his tenant he learned that nearly 40% of his residential tenants wouldn’t be paying their rent and about half of his 150 commercial tenants.

Other landlords have told Nick Norman, a lobbyist with the Apartment Association of New Hampshire, a similar story.

“Personally, I think most tenants are good tenants and will try to pay something or work out payment plans, but there are going to be bad players that purposely won’t pay their rent and attempt to live there for free. Not across the board, but for landlords, there is a strain. Landlords are nervous waiting to see what happens in the first week of April,” he said.

‘A terrible time for most people’

In late March, the group sent an email to the governor asking for help, perhaps to curtail his order to help them when it comes to late fees on their mortgage and tax payments.

“Honestly, I think the governor had good intentions,” said Mike Bunie, a Manchester landlord with 149 units who helped write the letter to Sununu. “He was just trying to prevent people getting booted out. But it was done so quickly, it led to unintended consequences. It could have a cascading effect on us and our debtors.”

Some of those demands seem “reasonable”, said Elliot Berry, a tenant advocate with New Hampshire Legal Assistance, though he said that there has to be some give in this public health emergency.

“It’s a terrible time for most people, but the poorer you are the more terrible it is,” he said. “Every link is stressed. But we are sympathetic for what the landlords are experiencing and would support any measure that will helps them without hurting others more we would support.”

Closed courts

One of the many suggestions from landlords is to limit the eviction order solely to nonpayment of rent.

“Under this order, we can’t evict people for dealing drugs, for battering people, for fire hazards, for noises and disturbing their neighbors,” Bunie said.

The federal moratorium on evictions (which is just for federally subsidized housing), and some other stays are limited to nonpayment, Norman noted.

Norman is also asking that evictions be allowed to proceed, but that the writ of possession – the last step of eviction that allows the sheriff to physically remove the tenants – to be halted instead. The reason is that before they get to the last step, state law requires that landlords and tenants work out a payment plan, which if the tenant follows “would mean that the landlord got something.”

Landlords also are asking for a grandfather clause, allowing evictions that were begun for nonpayment before the governor’s order, or before the pandemic crisis hit.

“I have one tenant who hadn’t paid rent in three months,” said Bunie. “I can’t get this tenant out now, and we were on the one-yard line.”

Berry said that such requests are fair, though may not be possible during this public health crisis.

For one, the courts are not open for most proceedings, including landlord-tenant. He also thought that even if the courts could proceed, some evictions shouldn’t, such as evicting tenants so you can sell the building.

“That’s not going to cut it in this crisis,” Berry said.

Homelessness concerns

Another organization, Housing Action NH, also has mixed feelings about the landlords’ demands.

“Most of our members our landlords,” said Director Elissa Margolin. But right now, she added, the organization’s top priority is dealing with the homeless population, and it would oppose anything that would increase it.

“You can’t stay at home if you don’t have a home,” she said.

Another thing that landlords are asking for, and tenant advocates support, is some help for tenants in paying their bills. Most tenants are already getting help – increased and extended unemployment benefits with expanded eligibility – for those who lost their jobs as well as a $1,200-per-adult federal check (and $500 per child) for anyone who filed taxes. But it may take a little time for that money to get into tenants’ bank accounts, and besides, not everyone will put the cash toward rent, perhaps having more pressing expenses, especially considering they don’t have to worry about evictions.

The state did create a $2 million fund to help tenants with emergency rent, said Margolin. It is similar to the Low Income Home Energy Assistance Program, or LIHEAP, program for utility bills, with the money going directly to landlords. But the fund is not up and running yet.

While some banks and mortgage companies are waiving some late fees, Norman would like to see them all waived.

The federal government is considering such a program for federally backed mortgages, but Norman noted that most loans to multifamily landlords are private commercial loans.

Landlords would also like to see a state order requiring, or at least allowing, municipalities to waive interest and late fees on property taxes.

Barry supported these measures, but only if late fees are waived for tenants as well.

All this is well and good, said Bunie, but landlords have other expenses, like insurance and maintenance.

Indeed, said Anagnost, he has found that maintenance expenses are increasing in the coronavirus crisis. People used to be at work 10 hours a day.

“With shelter in place, things are getting a lot more use, they are taking a beating, toilets overflowing and such. We seem to be getting calls every day,” said Anagnost.

Federal help

Commercial tenants that are affected require less maintenance, but they are invoking a standard lease in their clause that allows them to get off the hook when it comes to rent when their business is shut down because of a national emergency.

Unfortunately, he said, insurers are denying landlord claims that the virus should be included in such claims.

Anagnost said he is extending commercial tenants’ leases so that he can get paid on the back end, “but you still have to pay.”

The federal government may provide some relief here too, said Rick Blais, a landlord advocate who also works with nonprofit housing organizations.

The first wave of emergency federal help in the crisis created a maximum $2 million emergency Small Business Administration loan with a fixed rate of 3.76% that you don’t have to pay back for 30 years.

The latest package from Congress offers forgivable loans, not just to employers that keep on or rehire staff but businesses that have unpaid rent and incur other expenses due to the crisis. The details and rules of that program have yet to be revealed.

The important thing, Blais said, is to communicate and pay what you can until the aid starts flowing.

“There is a big misnomer out there that you don’t have to pay rent,” Blais said. “You have to pay, but most landlords will be willing to work with you. If you don’t have enough for the mortgage you need to talk about this.”

Indeed, there is concern from both landlord and tenant advocates of tenants who think they don’t have to pay and then find themselves with a large debt when the eviction order lifts.

Before the crisis hit, there were already very high eviction rates because of rising rents.

“We want to avoid a second homeless surge,” aid Margolin. “We are trying to avoid that tragedy.”

Norman said it would have helped if Sununu kept landlords more in the loop before issuing the eviction order.

“What concerns us the most is that they are putting out these emergency orders without consulting people that it affects,” he said.

On Tuesday evening, the governor’s office said it was planning to meet with Norman later this week and added,

“We are currently exploring all options as to how the state can help landlords during this unprecedented public health emergency, and expect there will be further action down the line while still helping to ensure that no one loses their home or place of business as a result of Covid-19.”

These articles are being shared by partners in The Granite State News Collaborative. For more information visit collaborativenh.org.