Guidance on the Government Shutdown
As an industry, it is important that we work together during this difficult time to help those residents affected by the government shutdown.
Four weeks into a rigid government shutdown, federal employees may begin to experience difficulties meeting the conditions of your lease. Luckily, the National Apartment Association has released the following guidance and suggested resident communications to assist you in working with individuals affected by the government shutdown.
Please be advised, the language of this memorandum is broad and may be subject to change depending on circumstance. We encourage you to contact your Landlord-Tenant Attorney with any questions or concerns you may have regarding this issue.
To: (property manager)
From: (management company)
Re: Guidance on Government Shutdown and Possible Resident Issues
As you are probably aware, the U.S. Government entered a partial shutdown at midnight on Saturday, Dec. 22. The shutdown is now in its fourth week and almost 800,000 people are either furloughed or working without pay. Though apartment owners and operators cannot allow impacted residents to live rent-free, this situation is unique and the apartment industry is committed to working with residents to bridge this difficult period.
As the shutdown continues it is important to be prepared to assist any residents who are government employees and may have difficulty in meeting their financial obligations. The federal Office of Personnel Management has provided draft communications for federal employees to use with creditors, mortgage companies and landlords requesting a reduction in their monthly payments.
A few things to bear in mind when working with federal employees who are residents and impacted by the partial federal shutdown:
*The length of the partial federal government shutdown is completely unknown and dependent on political factors outside the control of impacted federal employees. Whatever arrangement you make with impacted residents should acknowledge this unknown.
*Traditionally, federal employees impacted by a shutdown receive lost back pay at some point once the government reopens.
*There are numerous options for owner/operators to use in working with impacted residents. Waiving late fees and accepting partial payments during the period of the shutdown can be helpful to residents in the short-term with full payment expected once the federal government reopens and workers have received their back pay.
*It is important to document all agreements or arrangements with impacted residents in writing. NAA has prepared the following letter to assist in drafting a written record of agreements.
If you have any questions or need further assistance, please contact (Mgmt Co. Name).
XXXX, XX XXXXX
Thank you for contacting us regarding the temporary partial federal government shutdown. We realize that during the shutdown, as an affected individual, your income has been furloughed, and you may experience difficulties meeting the conditions of your lease.
We understand the extenuating and impermanent nature of these difficulties, and pursuant to our conversation with you, we are prepared to offer the following options to protect your residency in good standing:
- Provide for a reduced monthly payment of $XX, which defers $XX of your usual full monthly payment of $XX. The deferment will be repaid over XX extra monthly payments of $XX, which will bring you current as of [Month] [Year].
- Offer a split-pay option, where you pay half of your rent on the 1st of each month and the other half on the 15th.
- Forgo fees for late payment pursuant to [section X] of the lease during the time when you are unable to return to work.
We appreciate your initiative, and your directness in contacting us regarding this matter. We greatly value having you as a resident and look forward to a timely resolution of this situation. Please maintain close communication with your point of contact, [name], as the situation progresses regarding your income.
Thank you again for reaching out to us, and please don’t hesitate to contact [name] with any questions regarding this arrangement, or if we can be of any further assistance.