Landlords in the Los Angeles area are owed more than $1 billion in rent due to the pandemic, according to data compiled by the National Equity Atlas.

During the pandemic, many landlords in the National Equity Map Research Area in Los Angeles and Orange Counties have been forced to improvise to survive the pandemic moratorium on evictions.

Universe Holdings, a company that owns and manages more than 1,000 units in Los Angeles, formed a three-person task force early in the pandemic to collect rent from delinquent tenants, said Henry Manoucheri, the multifamily company’s chief executive , the company has a Century City office.

This working group is made up of managing agents already employed by Universe. Its job, Manoucheri said, is to tease out the new tenant regulations from different government agencies, as well as to understand the different circumstances of tenants claiming COVID hardship.

“Hundreds of tenants in arrears on rent. Most have money but want to take advantage of the moratorium. Emails, texts, door knocks, meetings and paper payment plans. We’ve had multiple cash acquisitions. At the same time, we maintain a great balance,” he said.

At the height of the pandemic, Manoucheri estimates that Universe collected 65% of rent on some of its buildings in Los Angeles. Recently, the collection rate of these buildings has increased to 83%. Across Universe’s 4,000-unit multifamily portfolio, which includes other Southern California counties as well as Florida and New Jersey, more than 96 percent of tenants are paying rent on time.

Being proactive is critical, Manoucheri says. “If we backed down, we wouldn’t exist today,” he noted.

Other landlords have been able to evict tenants who don’t pay during the pandemic. Ky Trang Ho said she evicted five tenants from a south Los Angeles home last year. Ho hosts private webinars for landlords dealing with evictions. She said landlords aren’t the only ones who must abide by strict city rules. Tenants, she said, “must submit monthly documentation that they were impacted by COVID when they failed to pay their rent.”

She was able to evict two tenants because they never applied for California’s housing is key rent relief program. When she filed eviction papers with three other South Los Angeles tenants, only one challenged her, but dropped the civil lawsuit and moved out in January. She sold the house in April for $1.2 million.

During the height of the pandemic, an estimated 18% of tenants in the 15,000 units managed by Moss & Co. did not pay rent, said Chris Gray, president of the Sherman Oaks-based company. Moss manages multi-family housing for independent owners.

Gray estimates his company was able to recoup more than $13 million in rent for its clients through government funding. After programs like the state’s Housing is Key relief program stopped accepting applications last year, Moss’ clients have $15 million in overdue rent.

To make up for the shortfall, many owners will cut back on services. “We have to be selective about our expenses. We have had to postpone or cancel common area and unit upgrades. In some cases, mom-and-pop owners are taking out loans to keep properties going. We are repairing big-ticket items because of these COVID policies, rather than replacing them,” Gray said.

Joe Goldstein, chief operating officer of Beverly Hills-based Concord Companies, owns and manages 4,000 units, 70 percent of which are in Los Angeles. He said 400 tenants have been unable to pay rent during the pandemic. Half of these tenants entered the eviction stage for a variety of reasons, including not receiving government relief.

“We’re going to have to go to court 200 times,” he said. “I really want to hire paralegals to handle the caseload.”

To save his staff from difficulties and costs in court, he tried to settle cases by having his district managers and accounts receivable staff put delinquent tenants into payment plans and sometimes forgive debts so paying tenants could move in. Goldstein said his firm avoids small claims court. He’s also concerned about upcoming municipal initiatives, such as the city of Los Angeles’ justifiable eviction rules, which increase protections for tenants.

“Just as tenants need to be protected from hostile landlords, so too must the hostile tenant situation be considered,” Goldstein said. “To be effective, we have no choice but to work with residents because blanket policies by local governments are often too slow.”

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