How Property Managers Are Helping Residents Stay ‘Right-Side-Up’ on Rent
L
ate fees and eviction filings can
lead to stress for renters and turnover
in apartment communities.
Some in the industry are flipping
the script.
Victoria Cowart knows eviction. As a girl
she was evicted several times with her
family because they didn’t have enough
money to cover rent. Once, they wound
up homeless and had to live with relatives
for a time.
Now, Cowart is vice president of property
management for Darby Development
Company, which oversees 14 rental
properties in North and South Carolina.
After seeing a presentation about veteran
homelessness at a conference, she
wanted to come up with a way her company
could use its portfolio to help prevent
homelessness by enabling families
to stay in their apartments. Inspired by
microlenders like Kiva, which lends small
amounts to people in need around the
world, and with the blessing of several of
Darby’s property owners, she launched
an interest-free loan program. Her company’s
property managers can offer the
loans to residents who are habitually
behind on rent payments but otherwise
responsible members of their apartment
communities.
“These are folks who just got flipped upside
down in their payments because of
an emergency,” she said. Common difficulties
that put people in this situation
include having an illness in the family
and needing car repairs. Stuck in a rut
they can’t get out of on their own, they
rack up late fees and the administrative
and court costs of eviction proceedings,
which properties generally pass on to
customers.
“My experience is when residents get into
a cycle of delinquency, they never break
free,” Cowart said. Whether these people
vacate on their own or are evicted for failing
to pay, they often leave behind a balance
that property owners can’t recoup.
Lending a hand
In South Carolina, Cowart said, apartment
owners can file for eviction starting
on the sixth of the months. Even when an
eviction filing does not lead to an actual
eviction — which is the case most of the
time — the process is stressful for residents,
particularly children, and strains
their relationships with their property
managers, Cowart said.
“You file in case they don’t pay, but you
hope they will be able to,” she said.
“Twenty-five days of the month you’re
in an adversarial relationship with a customer
you value. It’s a bad place to be.”
Her three-year-old micro-lending program
aims to help families avoid stress,
save money rather than pay late fees and
court costs, and feel confident they can
stay in their apartment homes. Participants
can also build a better rental history
that can help them find a new place
down the line.
Property managers identify residents who
qualify for the program, which means
they have had at least three eviction filings
yet comply with their lease terms
and have steady income. If the residents
agree to participate, they sign a major
change addendum, receive a loan-credit
for the current month’s rent (which they
missed paying on time) and pay the next
month’s rent, along with the first $100 interest-free
installment toward paying off
their loan. Each subsequent month, they
must pay their rent on time, with $100
added, until they’ve paid off the loan.
Cowart said that last year across Darby
communities, 20 people enrolled in the
program. Of those, nine paid off their
loans. Nine are still making payments.
Only two left the property with balances.
Building trust
Mark Hurley, president of Highland Commercial
Properties, which owns 2,370
apartment homes in Texas, has also been
inspired to help residents stay in their
homes. His company decided two years
ago to eliminate all administrative and
court costs for residents facing eviction
filings at his properties. In San Antonio,
where many of Highland’s properties are,
it costs $146 to file an eviction notice and
$255 for a writ, for a total of $401, Hurley
said. That amount is hard to bear for his
mainly low-income customers; average
rent for his apartment homes is $750.
In addition to Highland’s elimination of
charges for eviction proceedings, any
staff member of the company can decide
to waive the $65 late fee for a customer
in a given month. And property managers
can work with residents to create
payment plans that enable them to stay
in place.
Highland saw a 10 percent reduction in
evictions from 2017 to 2018, Hurley said.
“I think it’s a smarter business plan to not
be adversarial with the people who live
in your community,” he said. “If you show
people that you’re working with them,
you’re eating the eviction fee and it costs
you money, you’re building trust with
customers and that builds loyalty over
time. It builds your reputation. It builds
trust with employees, too. It’s telling people,
‘You should stay here.’ You’re happier,
employees are happier, and customers
are happier. They’re staying longer.”
That saves money for property managers.
Hurley estimates that re-renting an
apartment costs his company $2,000 to
$3,000, including loss of rent.
“Getting to know your residents is also
important,” he said. “Listening to them,
finding out what are the reasons they’re
not able to pay rent. There’s no one solution
to this problem.”
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