What to do when your Michigan tenant stops paying rent

According to the US Census, there are 10 million Americans behind on their rent payments. And if you own a rental property then you have probably experienced a nonpaying tenant. Not only can it be frustrating but it can turn your once asset into a liability. COVID amplified this problem and though things are starting to get back on track, landlords along with tenants are still feeling the fallout. With our own city of Detroit ranking #10 in the nation for evictions, it’s important to know what Michigan programs are out there to take advantage of when your Michigan tenant falls behind on rent.

1.Take advantage of Michigan Programs in place to support people facing eviction

The current state of Michigan Eviction Moratorium

Michigan suspended evictions from March 2020 to July 2020. Currently, only the Centers for Disease Control and Prevention (CDC) has a moratorium that is effective Friday, September 4th 2021 thru July 31st, 2021. This is intended to be the final extension of the moratorium regarding evictions.

COVID Emergency Rental Assistance (CERA)

If you are having trouble with your Michigan tenant not paying rent then you should check this program out. Michigan Housing Development Authority (MSHDA) has federal dollars to help landlord and tenants who are having difficulty paying rent in wake of COVID. Michigan Michigan landlords or tenants alike can apply for this program. Service agencies communicate the status of application via email. There are a lot of Michigan landlords and tenants applying for this program, so it is important to get this application in as soon as possible. To receive funds, it can take months.

Who is eligible? Renters who have income less than 80% of Area Median Income (AMI) and who have faced hardship/ job loss from the COVID virus. Application

Michigan Utility Bill Assistance

Rent is one problem but before then tenants must keep the lights on and the water running. If your Michigan tenant is having difficulty paying their utility bills, then this is a good program for them. Tenants can apply online by clicking the link above and applying to take advantage of this program. Having dealt with tenants and getting their power turned back on, I can tell you that they are usually more than willing to assist when a tenant is going through a hardship there are countless programs and grants that assist people who need to keep the lights on.

Since march 2021, over 20,000 Michiganders have applied for these grants and they continue to be a viable source of relief for both tenants and landlords alike.

2. Eviction process:

Evicting a tenant can be a nightmare and at the same time a major relief. It can protect the property from damage, stop further frustrations and get landlords back on track to having a tenant that can pay the monthly rent. It can be beneficial to tenants as well by getting them into a housing that is more consistent with their income. It’s difficult not to be frustrated when months pass by with no check. Here are some ways to migrate any further losses to your rental asset.

Understand your Michigan eviction laws:

Michigan evictions follow strict guidelines and knowing your ordinances can put you ahead of the game. It is important to know that before you evict a tenant, you have a legal ground to stand on. This applies to the state level as well as the city of Michigan level.

Landlords will need to know the legal reasons you can evict a tenant, the proper notice of eviction, security deposits, subleases, and more. As important, landlords need to know the rights of their tenants too.

Plan before the eviction:

Most Michigan landlords have experienced a difficult renter one even on who caused damage to the home. It is important to prepare for these inevitable circumstances by preparing before a renter signs a lease and you hand over the keys. Always have a certificate of occupancy, strong lease agreement and large enough security deposit to cover reasonable damage to the property.  It’s always encouraged for landlords to invest into a property manager. Though, they come with a price tag. There is a value in not having to deal with the tenants directly and having a third part handle background checks, rent collection, repairs and evictions. Having a good property manager is sure to pay dividends in the long run.

3. Sell your house fast with a cash as is offer:

With the Michigan housing inventory shortage at an all-time high, it is the most forgiving time to sell a property with a nonpaying tenant or a home that needs a lot of work. Prior to the COVID housing bubble, this would plumet your Michigan house value and investors would seek more desirable properties elsewhere. Sometimes, landlords would have to invest money into the property to get a decent price tag. However, with the new standards, buyers anticipate problems with tenants paying for rent, a house that needs to be up to code, or needs major repairs.

COVID hardships and evictions effected tenants and they affect landlords too. The important thing to remember is that you as a Michigan landlord has options. If you would like us to assess your property and get you a no obligation all cash offer, then give us a call at Anderson Home Paths. We will be happy to answer any questions about anything listed above or about your property.

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