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  • Deferred payments

    Two customers have just called about this. The first was Monday asking for a (make that 3) nope 4 people now.as I am typing. The second asked about rent forgiveness as he lost job and is sick. I told him we are still not sure what we are going to do. He asked about discounts, I told him he is already 5 bucks under the going rate. What are we all going to do. Deferment and add a %age to future rent? The only issue with that is do we Over lock that tenant? What about the tenant that does not pay and moves out after deferment? We all have to pay our bills after this. I don't want to get burned.
    Joe Krezdorn
    DAK Self Storage
    Leesport, PA 19533
    www.dakselfstorage.com

  • #2
    We have decided to turn off all of our fees during this time. We will still lock out and send payment reminders, but as of right now, we aren't going to start the lien process on any units until at least May 1st.

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    • #3
      We are doing the same as SimplySpace . I'm hoping if we show empathy during this time, customers will be more at ease and continue to rent with us. We will have to over-lock units until rent is caught up, but no additional fees at this time.

      Charlotte

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      • #4
        I just turned off lates and pre lien.
        I am still going to lock unit when report prints daily. Hopefully these can be turned back on May 1st.
        Lien letter I print each manually so I think I will wait until July to even schedule a sale. Hopefully this will be long enough.
        Joe Krezdorn
        DAK Self Storage
        Leesport, PA 19533
        www.dakselfstorage.com

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        • #5
          We're freezing all late fees etc . They can still pay but regular rent continues to accrue for now.
          Even duct-tape can't fix stupid. But it can muffle the noises.

          WA State

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          • #6
            This is a tough situation and tough times. Our state storage association got the governor to list us as an essential business - which I agree with. We have many business tenants and some are doctor offices with medical files in the units.

            Some of their recommendations are a moratorium on auctions and rent increases and the waiving of late fee's, etc. We are not doing rent forgiveness but are planning to allow deferment (I have not heard for how long). They also recommend allowing business tenants access with non-payment. The problem with deferment is if the tenant can ever catch up and do you allow access during that time and like you mentioned, possibly get burned.

            I had a tenant (dentist) who moved out last week because he knew times were going to be tough for him and he did not need the extra expense of storage. Another tenant owns multiple restaurant locations, he spent the last 3 days (before the 1st) moving and condensing - moved out of a 10X20, 10X15 and 10X10 and condensed into his 10X30 unit. I really appreciate these forward looking tenants.

            Unfortunately, the burden to be creative will fall on the self storage operators and owners.

            There is no crystal ball that will provide the right answers but we can try and look to the other side. Many tenants are living paycheck to paycheck when they have a job. Hopefully, the next 30 days will provide the break to slow the virus (there will still be more cases and deaths) and the curve will start to flatten and maybe start to decrease. Some people will not have worked for 45 days or longer and hopefully there is a job to go back to. They have deferred apartment rent or home mortgage payments, car, credit card, etc. Now even before the virus crisis self storage rent was way down on the list of payment priorities, unless they ran a business out of the unit or needed access everyday. The tenant can not go back in time and make up those lost wages - they are gone forever and with the financial burden ahead it does not look go for the self storage operator. So we have to ask ourselves, as operators and owners, what can we do. Do we forgive April rent with the condition that the tenant vacate by mid-month or end of the month? So we can free up that unit for any future rental. Do we defer rent payments, allow access to certain types of tenants, with the hope of getting full payment in the future? How long do we allow the deferred payments to continue? Is it a combination of various actions on our part?

            Obviously, some tenants will take advantage of the current crisis, however we can not toss every tenant who asks about rent forgiveness or rent deferment into the bushel of bad apple's.

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            • #7

              So we have to ask ourselves, as operators and owners, what can we do. Do we forgive April rent with the condition that the tenant vacate by mid-month or end of the month? So we can free up that unit for any future rental. Do we defer rent payments, allow access to certain types of tenants, with the hope of getting full payment in the future? How long do we allow the deferred payments to continue? Is it a combination of various actions on our part?


              Our company has waived 2 months of late fees OR 1 late fee and 1 Pre-Lien fee. They are also focused on retaining current tenants rather than getting new ones, so in an effort to do that they are offering any tenant who asks ( NOTE I said they have to ask, we are not just throwing it out there) They can receive up to 4 months at 1/2 off their current rate. No deferment. It's an aggressive approach but I think its smart, especially since it could mean the difference of some money coming in vs. no money coming in for those who would have moved out otherwise.
              You Laugh, I laugh. You cry, I cry. You take my coffee...may God have mercy on your soul....

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              • #8
                Please keep in mind that with the stimulus package, any person that was working and are now unemployed can get unemployment and the waiting week(s) are being waved and that all the unemployed get the max amount allowed by the state plus $600 a week more from the federal government, thru the stimulus package, so in some states that tenant is getting as much as or more than $1000 a week. Make all decisions based off of that. I have not had any tenants call in with their concerns about all this and when they do I will tell them it is a case by case basis and up to the owner.
                "Never let the inmates run the asylum!"

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                • #9
                  I just want to caution you all; if three months goes by and you're waiving all late fees for now... do NOT go immediately into sending a lien or auction letter down the line. Do the process from the beginning, late letter, PLN and Lien, then do necessary auctions.
                  Gina 6k
                  twitter.com/GinaSixKudo
                  VM: Four-Oh-Eight- Seven-Eight-Oh-Eight-Oh-Seven-Nine
                  [email protected]



                  You only live once, but if you do it right, once is enough!
                  I am not an attorney, just an experienced manager who is willing to share what I have learned. Your thoughts, practices or opinions may vary and neither of us may be right.

                  Comment


                  • #10
                    Gina6k, I said the same thing to my wife this morning. When lates are turned back on that we will start with the late fees and so on.
                    Strange time indeed!
                    Joe Krezdorn
                    DAK Self Storage
                    Leesport, PA 19533
                    www.dakselfstorage.com

                    Comment


                    • #11
                      Originally posted by pacnwstorage View Post
                      Please keep in mind that with the stimulus package, any person that was working and are now unemployed can get unemployment and the waiting week(s) are being waved and that all the unemployed get the max amount allowed by the state plus $600 a week more from the federal government, thru the stimulus package, so in some states that tenant is getting as much as or more than $1000 a week. Make all decisions based off of that. I have not had any tenants call in with their concerns about all this and when they do I will tell them it is a case by case basis and up to the owner.
                      I would be weary to base it off assuming $1000 a week. I don't want to put my managers in a situation to where they get to decide if someone is or isn't worthy of having their fees waived because of perceived social status.

                      We haven't announced to all our customers that we are turning off the fees and people are paying on-time as usual. As you said before, its the frequent fliers that my managers might not want to help as much, but in our area, that is possibly exactly who needs it to buy food for their families now that their kids aren't getting school breakfast and lunch.

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                      • #12
                        Originally posted by SimplySpace View Post

                        I would be weary to base it off assuming $1000 a week. I don't want to put my managers in a situation to where they get to decide if someone is or isn't worthy of having their fees waived because of perceived social status.

                        We haven't announced to all our customers that we are turning off the fees and people are paying on-time as usual. As you said before, its the frequent fliers that my managers might not want to help as much, but in our area, that is possibly exactly who needs it to buy food for their families now that their kids aren't getting school breakfast and lunch.
                        It's definitely a slippery slope and potential lawsuits based on discrimination in one form or another. There's a reason for sticking to standards and policies. A one time judgment call on a tough situation is one thing, picking and choosing who gets a fee waived based on who is your biggest pain is definitely a no go. Same rules for all and thank you for realizing some of your customers may be truly struggling just to survive. And welcome to the forum!
                        Gina 6k
                        twitter.com/GinaSixKudo
                        VM: Four-Oh-Eight- Seven-Eight-Oh-Eight-Oh-Seven-Nine
                        [email protected]



                        You only live once, but if you do it right, once is enough!
                        I am not an attorney, just an experienced manager who is willing to share what I have learned. Your thoughts, practices or opinions may vary and neither of us may be right.

                        Comment


                        • #13
                          Originally posted by SimplySpace View Post

                          I would be weary to base it off assuming $1000 a week. I don't want to put my managers in a situation to where they get to decide if someone is or isn't worthy of having their fees waived because of perceived social status.

                          We haven't announced to all our customers that we are turning off the fees and people are paying on-time as usual. As you said before, its the frequent fliers that my managers might not want to help as much, but in our area, that is possibly exactly who needs it to buy food for their families now that their kids aren't getting school breakfast and lunch.
                          I am not talking about social status. I am talking about unemployed people, whether they are managers of a CPA firm or a burger flipper. The max unemployment for each state varies. here in Oregon it was $420 a month and now with the $600 from the feds that is $1020. That is a week as well. The only tenants that I would not ever credit are my frequent fliers. I would likely credit 99% of the others, if they ask. As I stated before it is up to the owner. If he says credit them all, then I will. I am just saying that I recommend that it should be approached as a case by case decision and not a blanket credit of fees. Some may disagree, but I do have a heart. I feel bad for lots of people but I am going to be smart enough to not make a blanket decision, unless the owner says to. As has been stated earlier, once you go there, it is hard to turn it around. There has to be some ground rules, IMO.
                          "Never let the inmates run the asylum!"

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                          • #14
                            No calls and no plans to waive any late fees. I am not having any auctions (I have no one even close now anyway) and not going through with a planned rate increase for current tenants until this is over.

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                            • #15
                              We will be addressing client concerns on a case-by-case basis, but there will be no "blanket" waiving of rent or fees. So far there have not been that many clients that have come forward, but we are expecting that there will be some. Don't forget, the government will be issuing the stimulus checks within the next few weeks! This isn't intended as "free money" to go have fun with — it is to get people by so they can meet their obligations (rent, utilities, etc.). There is also additional assistance coming for those people who are getting unemployment benefits. So the money is coming, it's just delayed at the moment. Our intention is to retain as many clients as possible during these uncertain times, and we are being understanding of their situation while still holding them accountable to their storage unit lease.

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