In the wake of the coronavirus pandemic, more than 30 million Americans have filed for unemployment benefits. In fact, the unemployment rate today teeters near Great Depression levels. In turn, this widespread job loss has created another crisis: Tens of millions of tenants can’t afford to pay rent.
More than 43 million people rent their homes, according to 2016 Census Bureau data. Nearly half of rental units are owned by “individual investor landlords” — regular people who depend on rental income for their livelihood.
If you’re unable to pay your rent in full, you may be able to negotiate a deal with your landlord. After all, “a lot of people are struggling during the COVID-19 pandemic; landlords are likely to appreciate some type of payment rather than nothing,” said Michael Foguth, founder of Foguth Financial Group in Brighton, Michigan.
Here’s how to go about it:
1. Know your rights.
The first step is understanding what your options and rights are as a tenant, especially in light of new rules set in place by the stimulus package enacted in March, known as the CARES Act.
For example, a 120-day moratorium on evictions and late fees was placed on federally subsidized housing and properties financed through Fannie Mae, Freddie Mac or the Federal Housing Administration. However, this only applies to about a quarter of renters, as most rental properties are financed by private lenders.
Some states and cities have instituted their own eviction moratoriums. Additionally, if your lease is coming to an end, you may be able to stay longer without facing eviction.
Keep in mind, though, that just because you might be protected against eviction, it doesn’t mean you’re free to skip out on rent. Tenants are still expected to reach out to their landlords and work out an agreement for coming up with what they owe within a reasonable amount of time, though there isn’t any official guidance on how long that is, exactly.