 With me today is Krista Stadler, broker in charge for AA Ocean Front Rentals and Sales. She's been here a few times and we're really good friends, so it's always a pleasure co-hosting with Krista. So let's get started. Hi Krista. Hi, so happy to be back with you. I know, it's been a while, but it's always fun. Yes. You too. It's always fun. Anything fun right now is good, so we'll try to make this as pleasant as possible, I guess. I know, I know. It's definitely an unprecedented time and we just don't know, we don't know from week to week or day to day how things are playing out, but a bit of good news. I heard today on the presidential briefing that scientists are really working hard to kind of figure this thing out and they've discussed three measures that may be taken that may have some bearing on just eliminating. And I don't want to say that to, until it's set in stone by the scientists, but they did bring it up today and one of them is sunlight, UV, right? And aren't we lucky to have plenty of that. So at some point, hopefully they'll tell us to go outside instead of staying inside. The good thing is, as well, the mayor's opening up the parks this week, so that's good. We'll be able to get out, you can't sunbathe or anything like that, but at least we'll be able to get out and exercise at the parks, if you will. That would be great. Another thing they talked about was rubbing alcohol and bleach. Supposedly bleach kind of kills the virus on the spot. So kind of keep those things in mind as the scientists continue to work on these things and hopefully they'll get it figured out. But if you're starting with good old mother nature, that's good for us being here in Hawaii because we're really close to the sun. Yeah. I'm very happy about that. Yeah. It's been here 21 years. I love the sunshine. Yeah. So I know you have some things you want to ask me about our business right now. Yeah. Yeah. So we can start there. What else is in the news is that the unemployment rate being 37% in Hawaii, it's the highest in the country. So I'm, you know, assuming at some point you've dealt with, you know, maybe some tenants are not able to pay their rent. And I'm just curious as to how your company in particular, AA Oceanfront, is handling, how are you handling those instances or if you're seeing them on a large scale? Yes. Yes, we're seeing them. Um, it was interesting because April rent as of the 10th of April, we had received 91% of rents due, which was extremely high considering the situation. Having said that, I am foreseeing and forecasting that may is not going to be the same situation. Folks were working through March and the majority of March and you know, probably already had funds set aside to pay the rent. Um, what we're doing is we have a very structured system in place done in a very compassionate and professional way with a lot of communication. Um, if we have a tenant that is expressing problems or foreseeing problems with paying all of the rent or a portion of the rent, we have, um, they communicate with me. I've decided to kind of take that on. I deal with the tenants and the owners. Um, we have a form that they complete just to gather some more information and we ask them to actually present what they're requesting. Are they requesting for their rent to be waived or a portion of it to be waived? There's a difference between it being waived and it being deferred. Um, if it's waived, that means they don't owe the money. So if the rent was $2,000 and the owner is going to waive 50%, then they only owe a thousand. If we're deferring it, um, all the rent is going to be deferred. Anyway, any payment not made is going to be deferred to a later date and it will still be due, but we're, we're letting the tenants, you know, kind of let us know the scenario of what's going on and I take that information. I communicate that to the owner. So it's all in a written format and then I asked the owner to review it and to communicate with me. A large majority of them will actually have a phone conversation with me. Um, and then put in writing what if they agree 100% to whatever the tenant is asking, or if they'll come back with maybe another, another proposal. Um, so that's basically what's happening. And right now I believe I have out of 300 units, 20 requests that have come in. So that's not too bad. Um, again, we're seeing more when we get to the April rent, but the owners have just been unbelievable. Just really amazing. Wonderful. So. Well, that's great. It sounds like you've been lucky in that regard. Um, but just to clear up any confusion, let's talk about, um, the, uh, current mandate, if you will in terms of the moratorium on rent and mortgages and things like that. So let's say that a tenant says I can pay half the rent, but not all of it. Or let's say a tenant says I can't pay any of it. The owner actually can't force their hand or anything like that, or am I mistaken on that because of the current moratorium on rent? Absolutely. Our normal process would be if the rent hasn't been paid by the grace period, we would put out a five day pair quit notice basically saying you have five days to bring your account current or contact us and work with us, but you basically putting them on notice. And if, if the rent wasn't paid, we could move towards summary possession and then we would move forward with potentially an eviction. Um, as of the last, um, emergency proclamation that the governor issued last week, they, they are not to be any evictions. If you, so for all of you owners that own your own and manage your own properties, if you attempt to evict someone at this time, you could be penalized with up to a $5,000 fine and, or a year in prison. So it's very, very serious. That's, that's very, very serious. That's kind of major a year in prison. Yeah. So the thing I try to encourage tenants is it's, it's not going away. I mean, they hear this and they think, Oh, I don't have to pay my rent, which technically they're not going to have any repercussions right at this moment for not paying their rent. However, when this ends, there will be still that entire amount of rent due unless there's been some kind of an agreement with the owner. And if they haven't made some efforts or especially communicating, just communicate. That's what we want. We want to have communication. If we see them even just putting a hundred or two, I'm making some kind of effort keeping us up to date on, you know, what's happening. Cause so many of them right now, literally their income completely stopped. They haven't, you know, you hear the complete nightmare happening with unemployment. They haven't even gotten their first unemployment check. They're waiting for their stimulus. They, these aren't people that have, you know, thousands and thousands of dollars in savings. So it's a really tough time and we're trying to deal with it in a real compassionate way. But you know, our client is the owner and we're in business to make commissions on the rent paid. So it is a business, but it can still be dealt with in the most compassionate way that we can right now. Yeah. Yeah. Compassion is big right now. And the good thing is I'm seeing a lot of us trying to come together and figure this thing out and support each other. But at the end of the day, like you said, in three months, you know, that rent payment is not going away. It's going to become due. And so communication is vital to just ensure you're on the same page. The same holds true with mortgages or anything else I understand. So that's, that's, that's a big deal. You also have to contend with inspections are your, your folks, your team, are they getting out? Are they doing inspections? How are the showings? Are there, have they slowed down tremendously? I think everybody's just kind of hunkering in. All great questions. So of our staff, all of the rental managers, some, some companies call them property managers, but the licensed agents are all working remotely. As well as we only have two people in the office right now. Then out of eight. So the folks that are the rental managers are the ones that would show properties and do inspections. The moveouts have decreased dramatically, I believe, because for two reasons. Number one, I think that the people just don't want to go through the process of moving right now. I mean, that's so such a huge task to pack up everything and move. And the other part of it is if they have lost their job, they're not going to qualify for another rental right now because they're not going to have a good point. I didn't think about that. That's a big one. We typically would do inspections and annual inspection or every six months, depending on what's negotiated with the owner. Those are not being conducted right now. We're not doing those. And that would usually coincide with a lease extension. So we would be doing the inspection prior to doing a lease extension just to make sure everything is in order. And, you know, there isn't any damage before we do an extension. So we're kind of just whole. Everything is just kind of on hold in that regard. For move-in inspections, because we are still having move-ins and we are still having move-outs. We're still doing those, the move-out inspections, if the tenant would like to be there for that inspection. It's kind of how we're doing showings. I'll give you an example. So showings where we're showing a vacant property. We are only showing vacant properties. We're not showing tenant-occupied properties, but we'll go in. Our rental managers have masks, obviously, gloves and items to sanitize, doorknobs, closet handles, countertops, things like that. But they'll go in and open the entire property up. If it's a private home, they'll sit out on the street in the car and be on the phone with the tenant. Oh, that's how you're doing it. Perspective tenant. Okay. Perspective tenant will go in and we give them guidelines before, you know, please don't touch anything. We've opened everything up. We ask them to wear PPE as well, you know, protective items. Then they go in and they can talk to the agent, like say, oh, I see this, you know, closet here. Is there a water heater? You know, whatever, whatever they're going to ask, they can ask different questions. And it's kind of how we do it with a move out inspection. We'll go in while the tenant is outside, do the inspection. They'll leave the keys inside, which we'll collect. So there isn't a lot of interface. Okay. A close and personal. Yeah. Well, that's good to know. I think I just assumed everybody just kind of stood six feet apart looking at the same thing. But that's an even bigger precaution. You know, if they're not even, you know, kind of viewing the unit at the same time, but still communicating, then, you know, that's a great practice. Another tool that we use is would be FaceTime or Zoom or any kind of, you know, way to video a property. And it's better if we can have the person on the phone with us while the rental managers, they're showing them the property. Zoom. And that works as well. Not as good as in person. I don't feel from a tenant's perspective, but we have done that as well, which is great. It's great. Oh, interesting. You just kind of go through with your camera or the Zoom login or experience if you will. Or Skype or FaceTime. And just kind of, that's a great alternative. Yeah. And that's probably something that they can use too on the buyer side when folks are looking for a home and things like that. They're doing virtual tours. And you don't get to see as much, but, you know, it's kind of where we are today. So we kind of have to adjust to our new normal. But this is a great time for, a great place for a break. So let's just take a quick break and come on back and continue the discussion. Okay. Thanks. That was so fast. We're going to continue our discussion with Christa Stadler on some of the best practices they're using as it pertains to rental, the rental industry and property management, some of the challenges that they're incurring and how they're addressing those concerns, particularly when it comes to tenants not being able to pay their rent because they've been laid off. Let's face it, we live in an economy that's been hit, I think the hardest in the nation because of tourism. So we have the highest unemployment rate in the country. So these are things we have to continually talk about and address as they change every day. Christa, before we went to break, I did have another question. We left off talking about inspections and things of that nature. What are you finding when it comes to repairs? Are contractors still out there going in there? If there's a plumbing issue and what precautions are they taking, if at all, I know in real estate it's a challenge to get some of the appraisers and inspectors to come out. So it's a challenge on that end. But are you incurring challenges with contractors and vendors when it comes to repairs? We've really had an amazing relationship and show of support from our vendors. And we actually had vendors that were reaching out to us right at the very beginning and saying, we're here for you. We're still up and operating. And now as things have kind of tightened up regarding wearing masks and whatnot, making sure that they wear gloves, they wear masks. If they do have to go into a property that is occupied, being very respectful of the tenants, typically with tenant occupied properties, we're trying to just deal with emergency repair, water leaks, anything electrical, obviously appliances have to be dressed. But if it's like a loose towel rack or the blinds, a little askew, we're probably not going to hand, we're not going to send somebody out for that right now. It has to really be something that it's going to either affect the health and safety, or could they just need it like a stove, obviously? Yeah. And then each of the different condominium complexes or associations that properties that we go into often will have their own set of rules. So we've got to be aware of that as well. They usually like the vendor to check in with them, let them know why they're there, what they're doing. And they'll make sure that they're wearing all the appropriate face masks and whatnot. So we work closely with each of the resident or general managers when we're dealing with vendors going in. We do interestingly have quite a few remodel and type of situations going on now. And those, those contractor type of vendors are, have been just great. I almost think more is getting done right now than, than before for whatever reason. But those things are kind of happening almost quicker right now, maybe it's just because traffic and maybe being so spread out for other jobs. But yeah, that's a really great question. Right. And those guys are considered essential, especially when there is an emergency and things of that nature. So it's good that they're getting out there. I do think there's some truth to the fact that, you know, we're getting things done because there, there's no traffic, you know, and we're kind of, you know, it's kind of easier to get in and get out. And I'm assuming the contractors, I know they're taking all the precautions too because we all want to be safe. But to lend itself to what you just mentioned about associations, associations, I talked to several property managers and they're, they haven't incurred an influx yet of homeowners that haven't paid their maintenance fees, but they're certainly cognizant of the fact that they may. So they haven't, you know, had a moratorium on maintenance fees or anything like that when it comes to those owners that maybe, maybe having some challenges. They're dealing with everything on a case-by-case basis. And like you said, communication is key. So property managers are encouraging their boards to encourage the owners that if there is an issue with paying the maintenance fees, they, you know, would communicate and submit something and writing to the board. It's my understanding that I believe in the month of March, some managers were still sending delinquent owners. They didn't change the collection policy at all. They were still sending them to the attorney and things of that nature until April. And I'm sure subsequently until things kind of lift, if you will. So there's no plan to send anybody to the attorney, but there's no moratorium on those maintenance fees. Like you said, they're going to have to pay them at some point. One management company, they're not even waving late fees yet, but they may at the end of three months or so, you know, as long as the owner is communicating. I can't imagine like if there's a huge influx of delinquent maintenance fees or things like that. Most associations, they don't have a bad debt fund and that can really hurt their operations. If those delinquencies and those collections, you know, kind of spiral upward, because let's face it, they need those fees to pay the monthly operations and they also operational expenses and they also need them for the reserve funding. I did hear of some talk that, and this is kind of strange. I don't know how this would fly, if you will, that, you know, at some point if things get out of hand, maybe the legislators or somebody could, you know, try to get their hand in some of the stimulus. We're on the second round of stimulus now. That number is creeping up there. I can't really see that happening. What I assume would happen is that the boards may have to compromise some of their monthly reserve contributions. But, you know, that's a little ways down the line. You know, like we said, this is changing every month. So right now it's not too bad. Folks are still being pretty good on the maintenance side as well, you know, paying their maintenance fees. They're not seeing a large percentage of owners not paying their maintenance fees outside of the normal. I think as we, if this keeps, obviously we still have to get through May since the order was just extended to the end of May. But it's just this huge trickle down effect, you know, I mean, if you do have a property that is a rental, and we've had quite a few tenants that own their own businesses like in Waikiki and some of them are even just leaving the state or the country because they're just, they're just kind of basically abandoning everything. But if that's owned by somebody and they have association dues to pay and the rent stops coming in for multiple months or it sits vacant and then, you know, it just, it's just this huge snowball effect as we all know. So hopefully by June something, something breaks. Well, let's, let's continue to try to be positive and hope for that because like you said, it becomes a huge trickle down effect. And we don't want it to get any bigger than it has to. So I know we could talk about this probably every day. I'm sure it is talked about every day because things are changing every day. So let's, let's do this again. And just kind of talk about what's out there. But this is a good place to end today. And so I want to thank you again for co-hosting, if you will, with me. I always enjoy. My pleasure. I think we're doing this again next week. I think so. So come back and join us. Thank you again. All right. Aloha.