Avvo 1-on-1 is a new Avvo question-and-answer article series featuring candid interviews with attorneys in various specific fields of law. The goal of this series is to humanize intimidating law topics for the everyday person through stories, anecdotes, and other real-life experiences shared by attorneys.
Our next installment features Stephen Fishman, a divorce and family law attorney practicing in Illinois.
Fishman, a dedicated attorney and author, has written useful, authoritative, and recognized guides on business, taxation, and intellectual property matters for small businesses, entrepreneurs, independent contractors, and freelancers. He is the author of over 20 books and hundreds of articles and has been quoted in The New York Times, Wall Street Journal, Chicago Tribune, and many other publications. Among his books are Every Landlord’s Tax Deduction Guide, Deduct It! Lower Your Small Business Taxes, Tax Guide for Short-Term Rentals: Airbnb, HomeAway, VRBO and More, and Working for Yourself: Law and Taxes for Independent Contractors, Freelancers & Consultants.
What advice would you give landlords and property owners during this pandemic, with tenants unable to pay rent?
The best approach for most landlords is to work out a payment plan with tenants who are behind in their rent. Get it in writing (you can find a sample payment plan here: https://www.atg.wa.gov/landlord-tenant).
Evicting a tenant who is behind in rent may backfire because you might have great difficulty getting a new tenant.
If tenants are still unable to pay back-rent after the pandemic is over, will that lead to mass evictions? What is your opinion?
It’s quite possible we’ll see mass evictions when the various eviction moratoriums end. Hopefully, the federal and state governments will provide some sort of relief for landlords and tenants. Rent vouchers is one idea. Continuing expanded unemployment benefits would also help. It’s obviously unfair to expect landlords to bear the economic brunt of the pandemic.
Personally, how do you think the pandemic will affect the housing/renting market in the long run?
The pandemic will reduce economic growth for years to come, and increase unemployment. New construction of homes and apartments will also likely decline compared with pre-pandemic levels. The housing situation will even get worse in areas that already have housing shortages. In the long run, this should keep rents high, although there could be temporary declines in high-priced areas like San Francisco and New York City.
There may be a long-term exodus from crowded cities to the suburbs and rural areas, especially if more employers allow their employees to work from home permanently.
How do you anticipate Airbnb hosts will be affected during this pandemic, if they can’t pay rent on their property are they still able to rent it out to guests?
The pandemic has been devastating for Airbnb hosts. Bookings went down to almost nothing in the United States and throughout the world. Some hosts have abandoned short-term rentals and are converting their property to long-term rentals. Others are attempting to sell their property. Some may lose it through foreclosure.
Are there tax breaks or government resources available for Airbnb hosts/landlords?
Yes. Airbnb has established a $250 million fund to help hosts impacted by COVID-19 related cancellations. Many Airbnb hosts can also qualify for federal Paycheck Protection Program (PPP) loans. You can borrow up to 2.5 times what you earned each month in 2019 as a short-term host. All or part of the loan can be forgiven if certain requirements are met. Some hosts can also qualify for unemployment.
These are certainly unprecedented times; however, do you know of another situation that’s similar? If so, how do landlords/airbnb hosts survive that?
There has never been a situation like this in modern times. Landlords and Airbnb hosts have no established playbook to follow.
Is there a light at the end of the tunnel? How do you see this whole thing ending and how will the economy look (in your opinion)?
It all depends on when the pandemic ends. If an effective vaccine is rapidly developed, things could go back to more-or-less normal in a year or two. If not, who knows? It’s very hard to make predictions, especially about the future.