When the first of the month came, Katrice Gill couldn’t make rent.
The part-time, in-home health aide and single mother usually has no trouble paying the $200 monthly contribution to her Section 8 subsidized rent, plus utilities. But with schools closed, she’s home with her four young kids, and the grocery bill has ballooned.
Gill, 32, said she tried to call her landlord, but didn’t get a call back. Then, on April 7, the landlord sent an email with the subject line in all caps: PAST DUE NOTICE.
With the message came an added charge: she was assessed a late fee of $91, nearly 45 percent of what she usually pays in rent.
“I’m just really stressed out,” she said. “It’s unbearable. You just don’t know what’s going to come next.”
Gill does know she can’t be evicted right now. Gov. Andy Beshear last month ordered an eviction moratorium during the COVID-19 pandemic, and court officials have suspended all eviction court proceedings until later this summer. But those orders don’t prevent late fees from piling up. What’s resulted is a new paradigm in the relationship between landlords and tenants: landlords have lost their tried and true enforcement mechanisms as many tenants can’t pay.
The late fees will increase the financial burden for renters who fell behind on payments and will face steep costs to stave off eviction when the pandemic ends. Roy Berwick, an attorney with Legal Aid, expects eviction courts to be flooded when the pandemic ends.
“It’s going to be a mess,” he said. “Back to back to back.”
Kentucky could see a surge of evictions after the moratorium expires because, so far, state leaders have not taken action regarding the accumulation of rental debt during the pandemic, according to an examination by Princeton University’s Eviction Lab of state-level COVID-19 responses. Last week, the Louisville Metro Council approved a measure that will allow Mayor Greg Fischer to spend $500,000 on rental assistance for local renters. The funds will be reserved for people earning up to 50 percent of the area median income.
Louisville landlords reported delinquency rates of about 25 percent in April, meaning a quarter of their tenants did not pay their April rent in full, said JD Carey, executive director of the Louisville Apartment Association. This is about five times higher than a year ago, Carey said, and he expects delinquency to worsen next month.
Roy Berwick, an attorney with the Legal Aid Society, said late fees are commonly used as a tool to entice tenants to pay up or pressure them to move out without the hassle of going to court.
“You’d think there would be some leniency during this pandemic,” he said.
The federal government is beginning to deliver promised stimulus checks, but experts say they’re just not enough to curtail the economic drop and stress that’ll stem from the pandemic.
Gill said she received her stimulus check. She didn’t use it to pay her late rent; instead, she bought groceries, and put the rest in savings. Without reliable income, she knows an unexpected cost can pop up at any time and she wants to be prepared.
“No one is ever going to get ahead,” she said. “We don’t want a lot of people going into survival mode, because that can be dangerous.”
‘Why would we want to add fees?’
Renters account for a third of the 1.7 million households in Kentucky, according to the U.S. Census. With many tenants out of work during the pandemic and struggling to pay the bills, landlords are taking a hit.
Carey, with the apartment association, hopes the influx of stimulus checks will help tenants be able to pay rents — which he stressed are still due, even though evictions are paused. But he is still recommending that landlords try to help tenants who are struggling to make the rent by waiving late fees and working out payment plans.
He believes most landlords are heeding that recommendation, and he encouraged tenants to stay in contact with their landlords if they are having financial difficulty.
“If they are struggling to get their rent paid, why would we want to add fees?” he asked. “The best practice is to work with your tenants.”
Tommy Floyd is doing just that. Floyd is the co-founder of the Denton Floyd Management Group, which manages about 3,800 units throughout the Louisville, Southern Indiana and Lexington area.
Floyd said his company has nixed late fees during the pandemic and is telling tenants to pay what they can.
“We’re going to work through this and we don’t want people to have to worry about having a roof over their heads,” he said.
Floyd’s company is large enough that they can continue with operations even as delinquency rates rise. Not all landlords are as lucky, he said, and many depend on timely payments from tenants to make their own mortgages.
And even Floyd’s company could struggle if the economy stays dormant through the summer. The company is constructing about 600 units and they try to add about 1,000 new units each year.
Some of these builds are financed with city-backed loans. As municipal revenues plummet, Floyd worries what that could mean for already low housing stocks.
“It’s a big deal,” he said. “We’re taking it week by week.”
During Moratorium, Debt Accumulates
Gill moved into her home along the southside of the California neighborhood about three years ago, after being displaced from the Beecher Terrace public housing complex.
“I wish everyday I was back in Beecher,” she said. There, despite the complex’s troubled reputation, maintenance was more dependable and she felt safer taking her kids outside to play.
With her kids home from school, Gill is thankful for the added family time and the ability to provide them more hands-on instruction. But she worries about the months ahead — if the rent and late fees keep piling up, she is afraid of being evicted when the moratorium lifts.
When the pandemic ends and courts resume, Berwick said judges will likely not enforce any late fees being levied against tenants. But failure to pay is reason for removal, and judges are required to uphold the law.
He and other advocates stress that tenants should keep paying their rent, if they can. If they cannot, stay in contact with your landlord. With few exceptions, evictions are not allowed under the current moratorium. A handful of Kentucky landlords have sought to evict tenants through a waiver offered by state officials, but those evictions are limited to situations involving allegations of dangerous criminal activity or threats to public health. Any other attempt to evict a tenant is illegal, and Berwick said tenants experiencing such should call the police.
Berwick expects most landlords understand or at least accept the need for a moratorium.
He said when late fees are added, they’re usually small daily charges, rather than the large, lump fee Gill received.
An employee with the company that manages Gill’s property, who declined to give her name, said the late fees are automatically charged on accounts that are past due. Due to the pandemic, the fees will be removed once rent is paid in full, she said.
For many tenants, though, it’s not clear just when that will be — or how high the bills will get.
Gill knows landlords depend on rents to survive, but she said she pays on time every month and was angry to see the late fee added on to her bill. Now, her anxiety keeps her up at night. Her friends have noticed the change in her mood. Stress encompasses her.
“What are we supposed to do?” she said. “Everyone is suffering.”
Contact Jacob Ryan at email@example.com.