In this time of economic hardship, some landlords are going to have to get creative. Officials working for the city of Monterey, in its role as a landlord, are recommending a two-month rent deferral option for commercial tenants in order to help them ease shutdowns and slowdowns due to Covid-19.
The recommendation, which goes to City Council for consideration tomorrow, April 7, would allow tenants on city property to pay the rent for April and May in increments from August through November.
(The recommendation does come with this caveat on timing: "Should the shelter-in-place be prolonged, staff recommends that the City Council authorize the city manager to enact additional defer rent grace-periods based upon the development of the shelter-in-place orders up to 180 days," per a report to City Council.)
The city has already taken steps to halt most evictions for both residential and commercial tenants, in keeping with an executive order by Gov. Gavin Newsom.
Assuming the city does collect all rent due in the subsequent months, the projected loss would be $5,000 because of interest rates dropping. The total rent payments that could be deferred would be about $770,000 for the two-month period.
"We hope we are setting a good example for other commercial property owners," City Manager Hans Uslar said in a press briefing call.
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