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The coronavirus has left millions of Americans unemployed and wondering how they’re going to make rent payments.
In April, nearly a quarter of renters didn’t pay their rent by the first week of the month. By the first week of May, 31% couldn’t make rent.
It’s a scary and uncertain time for those who are out of work, especially when unemployment payments are arriving late for so many Americans.
So what are you supposed to do if you can’t pay rent during the coronavirus pandemic? We enlisted top Michigan real estate agent William Frohriep to help walk you through your options.
Here’s what you need to know about paying rent and coronavirus.
Can your landlord evict you right now?
It’s the question on the minds of tenants across the nation: Can your landlord evict you if you can’t pay during coronavirus? Unfortunately, there’s no hard-and-fast answer. As with many legal questions, the answer depends.
Laws vary by state and city
When it comes to evictions, each state has its own laws and regulations.
In New York state, tenants can’t be evicted until at least August 20 (late fees and missed payment fees are also banned). In Massachusetts, renters can’t be evicted for at least 45 days after the state of emergency lifts.
In nine states, including Wyoming and Idaho, there are no eviction protections in place for tenants at all.
Further confusing matters, cities can pass their own eviction laws, especially where states fail to step in.
For example, Missouri has no law in place to protect renters during the coronavirus pandemic. Yet St. Louis issued its own protections, temporarily suspending evictions.
The lack of uniformity can feel overwhelming for renters as they try to navigate a maze of state and local ordinances.
Thankfully, there are resources to help.
- To learn more about coronavirus eviction laws in your state, check out this handy guide that summarizes each state’s policy — and grades them on their efforts — put together by Eviction Lab at Princeton University.
- For more on how courts are handling coronavirus eviction cases where you live, there’s a comprehensive list of eviction court proceedings across the country, compiled by Emily A. Benifer, professor at Columbia Law School.
- The Daily Beast also tracks state-by-state eviction law updates, if you’re looking to double-check the latest developments where you live.
- You can also check out this legal services chatbot that helps you figure out which eviction laws and ordinances apply to you based on where you’re located. Another cool feature? You can use it to automatically draft and send a letter to your landlord, requesting that they defer your rent payment or waive late fees.
If you’re worried about being evicted, researching your laws is a great place to start. That way, you’ll know what eviction protections you can expect.
CARES Act eviction protections
On March 27, Congress passed a $2 trillion stimulus package called the CARES Act. The law includes eviction protections for certain renters.
The CARES Act prohibits eviction for tenants living in federally backed housing for 120 days. That means if you live in qualifying housing, you can’t get an eviction notice until at least July 25, 2020. And even then, you must be given 30 days notice on the eviction. According to the law, you also can’t be charged late fees or be penalized if you make a late rent payment.
But let’s back up a minute. What’s federally backed housing?
Basically, that means your landlord, or the company that owns your building, is using a government-backed mortgage to pay it off. It’s estimated that 28% of renters live in federally backed housing, so this law offers protection to a sizable chunk of tenants.
At this point, you’re probably scratching your head, wondering, how am I supposed to know what type of mortgage my landlord has? Not to worry; there’s an easy way to find out.
Just type your address into Freddie Mac’s property search tool, and it will tell you if your building qualifies for eviction protection under the CARES Act.
What to do when you realize you can’t pay your rent
It’s scary and unnerving when you can’t make rent. Yet it’s now reality for millions of Americans who find themselves out of work during the coronavirus.
If you’re in a situation where you can’t pay rent, the best possible thing you can do is work directly with your landlord or leasing company to try to solve the problem together.
“You’ve got two types of landlords,” Frohriep explains. “You’ve got large corporations that own large apartment buildings and are managed professionally. And you’ve got individual landlords. Neither one of them can afford to hold real estate with a mortgage if the tenants aren’t paying.”
That’s why your landlord will most likely try to enforce your rent payment, whether you have the money or not. Even if a landlord would love to give you a break on rent, they simply may not be able to when they’ve got their own mortgage payment to make.
For the best results, try to approach your landlord with this reality in mind. When you’re able to empathize with their position, it’s easier to come up with a mutually beneficial agreement.
Contact your landlord
“The first thing to do, always, is to get in touch with your landlord,” Frohriep says.
“Explain your situation if you’ve been out of work because of the coronavirus.”
He shares that his son, who owns a small business that isn’t able to open during the pandemic, was able to negotiate two-thirds rent with his landlord, simply by asking.
Typically, there are two main types of rent relief you can request: rent deferment and rent reduction.
Rent deferment means your landlord will give you extra time to make rent payments, but you still have to pay in full.
During coronavirus, some landlords are allowing renters to distribute unpaid months across the rest of the year.
So, let’s say your rent is $1,000 a month, and you miss one month’s rent because of coronavirus. Let’s also say you have 10 months left on your lease. With rent deferring, your landlord may allow you to pay back that $1,000 over the course of the next 10 months, paying $100 extra per month. That would bring your total rent to $1,100 per month over the next 10 months.
This may be a good solution for some. But for those who remain in financial hardship, it could just cause a pile-up effect, where the tenant has no way to get on top of payments.
Rent reduction, on the other hand, means the landlord gives you a break on your payments, such as Frohriep’s son was able to negotiate with his landlord.
Let’s go back to our example of paying $1,000 a month in rent. With rent reduction, you could negotiate with your landlord that for the next 3 months, you’ll pay $700 in rent per month. If your landlord agrees to a temporary rent reduction, you don’t need to pay that money back.
To request rent relief, write a letter clearly explaining your situation, and propose a possible solution. Keep in mind that your landlord might be struggling financially, too, and be ready to be flexible in your approach.
Make sure to include with your letter all documentation of your financial situation, such as a letter from your company stating that you were laid off, or your most recent unemployment filings.
If you’re able, include a timeline of when you think you can pay your back rent.
The more you show your landlord that you’re willing to work with them, and that you understand where they’re coming from, the better your chances of success.
Work out a payment plan
Best-case scenario, your landlord immediately agrees to the terms you’ve laid out in your rent relief request letter. But always prepare to negotiate, just in case.
Make sure to document the contents of any conversations you have with your landlord, especially any terms you come to.
If you negotiate with your landlord by phone, consider asking if you can record the call. This is a mutually beneficial way to legally protect both of you, should you need it.
Note that secretly recording calls is illegal in some states, so always get consent before making a recording.
Once you and your landlord come to agreeable terms, get them documented in writing, preferably with both of your signatures.
Get assistance from relief programs
Another thing you can do if you can’t make rent payments is to utilize assistance and relief programs.
Right now, dozens of government agencies and nonprofits are offering financial assistance to those affected by the coronavirus pandemic. Here’s how to find resources:
- Fannie Mae Renters Resource Finder offers federal and state housing assistance information, access to HUD-approved housing counselors, guidance on unemployment benefits, and non-legal support in communicating with landlords.
- 211.org, sponsored by United Way, offers an easy search tool that matches you with resources to help with rent and other essential services.
- HUD’s rental assistance program is another resource you can tap, if you need help with rent.
There may also be local programs available to you, too. For example, in New York City, the city government is offering one-time rental payment assistance to tenants in need. Ask your local officials if any relief programs are available in your area.
What to do when you can start paying again
Once you’re back on your feet, reach out to your landlord, and let them know your updated financial situation.
If you have any outstanding rent to pay back, now is the time to make sure you’ve got a solid payment plan set up that you and your landlord both agree on.
Again, get everything in writing, and if possible, include both of your signatures. Once your new agreement is signed, you should be good to go.
Make those payments as scheduled, and breathe a sigh of relief!
Header Image Source: (Anthony Tran / Unsplash)