What If I Can’t Pay Rent?

What If I Can’t Pay Rent?

If you can’t pay rent as a result of the coronavirus pandemic, financial attorney David Winterton has advice for you. One of the largest side effects of the Coronavirus crisis has been a sudden economic recession. Countless people are being laid-off or at least temporarily not able to work at their job. Even though jobs have slowed down, the bills are still coming. Housing is often our largest expense and one of our most basic needs. Most landlords are willing to work with tenants to work out payments, especially during this time.

President Trump has guaranteed that HUD will temporarily suspend evictions and foreclosures during the Coronavirus shutdown. This should provide you with a bit more security knowing that the government has some temporary protections in place. This does not mean that your landlord cannot collect rent, just that they cannot evict you for not paying. If you can’t pay rent It is still important to contact your landlord and to work out a reasonable plan to keep you in your home.

It is important to remember that landlords still have expenses. This is their job. They are worried about making ends meet with their families, too. When you delay rent, it sets them back financially as well. The key is finding a solution to make sure both of you are comfortable with the outcome.

1. Be honest and proactive if you can’t pay rent

If you know you can’t pay rent, the best thing to do is to be completely honest with your landlord. They will understand that a lot of people are struggling from the economic crisis due to the Coronavirus, but explaining your story in a bit more detail will help them understand how to help you. Make sure to contact them before your rent is due. This will make them more willing to work with you. It also saves you from defaulting on your rent.

Example: My work is making cutbacks during this Coronavirus crisis and I am not able to work until they re-open again in another month or so. Unfortunately, they are not paying me during this closure. Because of this, money is tight and I will not be able to pay the full amount of rent due this month.

2. Offer to pay what you can through partial payments

Although you may not be able to pay the full rent, offer to pay what you can. For example, you may offer to pay half or 25 percent. Even paying a portion of your rent shows good faith to your landlord.
Example: Even though I cannot afford the full amount, I can afford to pay half of what is owed. Will you accept $500 instead of the usual $1000 payment?

3. Make a plan

Before you talk to your landlord, come up with a plan of how you will work out the situation. It helps to come with at least something on the table if you can’t pay rent. First, it shows that you are prepared and do intend to pay your rent even if it is not all once. This will also help your landlord be willing to negotiate and trust you to follow through. The following are a few examples of plans you might want to consider presenting to your landlord:

• Spread out the payments over a 6 month period.
Example: I want to pay the full amount when I am able. As soon as the crisis is over and businesses are open again, I can pay an extra $200 dollars for six months until the amount is made up.

• Add the payment to the back-end.
Example: I want to pay the full amount when I am able, is it possible to add this month on to the back end?

• Ask for reduced rent.
Example: Is there any way that my rent can be reduced for a couple months until I am able to return to work?

• Ask for no late fees.
Example: Can we work out an agreement where I do not have to pay any late fees?

4. Get it in writing

Always make sure to get rent and business agreements in writing. Even an email conversation would be enough to verify the agreement made. You could also create a simple document that both of you sign and date.

Remember, this is a negotiation and you may have to give a little to get a little. It is more cost-effective for your landlord to keep you as a tenant than to try and find a new one. They should be willing to work with you.

If your landlord is not willing to negotiate with you, you can always turn to your bank for a short-term loan or contact David J. Winterton & Associates to help you deal with your landlord.

Disclaimer: Each business and/or individual situation is different and unique. This article is intended to provide you with general advice only and not to be construed as legal advice. If you would like a detailed approach to your particular situation, please contact David J. Winterton & Associates for a consultation to discuss your options.

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