As a new month approaches, many tenants are panicked about how to scrape together the money for next month’s rent.
More than 22 million Americans have filed for unemployment in the past month, and many state unemployment offices are backlogged.
The CARES Act offers forbearance and blocks foreclosure proceeding for homeowners with federally backed loans, but it provides fewer protections for renters. However, it does place a moratorium on evictions for tenants in certain types of housing such as those under federal housing programs or those with federally backed loans.
If your housing is covered by this federal law, then your landlord can’t charge you fees or initiate eviction proceedings for 120 days after the CARES Act went into effect on March 27. This doesn’t zero out the rent you owe; it just prevents your landlord from evicting you if you can’t pay during this time. The rent is deferred. If you live in public housing, then you likely qualify.
But what if you’re unsure about the type of mortgage your landlord has? That’s where it gets tricky. According to the Project on Government Oversight (POGO), landlords may have access to documents showing if the mortgage is backed by Freddy Mac, Fanny Mae, the Federal Housing Administration, or the Department of Veterans Affairs. But many tenants don’t have easy access to this information, so it’s hard for them to know.
If you don’t qualify for the eviction moratorium under the CARES Act, then your state may offer some relief to renters. For instance, Connecticut tenants have a 60-day grace period to pay April rent and may request a 60-day grace period for May rent if they are facing financial hardships related to COVID-19. Kansas governor Laura Kelly has declared that landlords cannot bring eviction proceedings as a result of the tenant’s financial hardship. Some landlords are voluntarily waiving rent so relieve tenants’ financial stress, but not all landlords are so generous.
If you’re worried about paying your rent due to COVID-19, experts recommend taking these steps:
Gather documentation. Your landlord or management company may not require you to submit a copy of your unemployment application or an email from your employer about reduced hours, but it helps to have this documentation ready in case they ask. If you can afford to pay reduced rent and make up the rest later, calculate what you can afford to pay now.
Contact your landlord or management company in advance. Get in touch with your landlord before your rent is due and explain your situation. This shows a good faith effort to follow the terms of your lease despite a financial shortfall. Maybe you’ve lost your main freelance client or your employer has cut your hours in half. Explain why you’re facing a financial hardship, and ideally do it in an email so you have a record of what you sent.
Ask about options. Most landlords would prefer to work out a revised payment schedule with tenants rather than having to fill a vacancy, especially now. Your landlord or management company may already have options available to renters who ask, especially if they have a history of on-time payments in the past.
Consumer expert Clark Howard says some landlords are helping tenants by offering rent discounts or extensions, flexible due-date schedules, or converting security deposits into rent payments. If you can make a partial payment and tack on the balance owed to rent payments later this year once you find a new job, ask about that.
Do NOT write a bad check. Whatever you do, don’t send a rent check when you have insufficient funds. Bouncing a check is likely to anger your landlord and may cost them money, reports Nolo. You’re better off sending no check than a bad check.
Get it in writing. If you and your landlord work out a payment plan or a plan for rent-deferment, make sure you get it in writing. Ask them to send you a letter or an email outlining what was agreed upon so you’ll have record of it for later. Then follow through on what you agreed.
Stay in contact with your landlord. As your situation evolves—maybe the unemployment check you were expecting is delayed or you went from reduced hours to a lay-off—keep your landlord in the loop. If you do get the unemployment check you were counting on or your job situation improves, let your landlord know when you’re ready to make larger rent payments or get payments back on track. Nobody wants to be in a scenario where they can’t pay rent, but unfortunately, many people are. Fortunately, you may have options to prevent an eviction and work out a payment plan with your landlord or management company.
