Can’t Make Rent? Use These Tips To Negotiate With Your Landlord
Blog | May 20th, 2020
In April 2020, a whopping 31% of Americans couldn’t pay their rent. With millions of Americans out of work, landlords and property managers are increasingly willing to work with tenants on a one-on-one basis to negotiate an alternative rental agreement.
Are you worried about not being able to make rent on your house or apartment? In this article, we’ll guide you through the process of negotiating a rent deferral or reduction with your landlord. This way, you can preserve your financial health and benefit from a little peace of mind during these uncertain times.
Step 1: Organize With Other Tenants
If you’re the sole tenant in a single-occupancy household, then skip this step. However, those who share a building with multiple other tenants should contact other tenants by sliding a notice under their door with your phone number on it and a note explaining your situation.
Statistically speaking, nearly one-third of Americans can’t afford their rent. So, we can assume that some of your neighbors can’t either. Although you may face eviction if you can’t pay your rent, you’re less likely to be evicted if you band together with your fellow tenants to collectively bargain for an alternative rental agreement.
It’s important that you don’t take a hostile approach when negotiating with your landlord. Don’t approach him or her with a list of demands. Instead, explain your situation and remember that they are also individuals with bills to pay — your goal is to seek mutually beneficial compromise, and not bully them into giving you a break.
Many jurisdictions currently cannot enforce evictions. If you and your landlord cannot arrive at an agreement during a crisis, then the landlord has no recourse but to wait until the courts open again and can hear your eviction case.
If your lease expires and you continue to pay rent to your landlord, then your rental agreement carries forward on a de facto month-to-month basis.
Step 3: Initiate Communication ASAP
You shouldn’t wait until the last minute to bring your concerns forward. Not only is it disrespectful, but it’s also not likely to work in your favor. Instead, communicate with your landlord as soon as you’ve lost your income source or believe your tenancy is in jeopardy.
If you’re fortunate enough to have an attorney, have your attorney contact your landlord’s. This way, they can handle negotiations on your behalf.
Assuming you do not have a lawyer to negotiate on your behalf, then make it clear from the start that your goal is to continue your tenancy into the future. Chances are, your landlord will be more likely to accept a reduced or deferred payment scheme than initiate a long and arduous eviction process during a global crisis.
Step 4: Lean on Your Track Record
Make sure you point out your history of timely rent payments and good credit score, if you have one. This way, your landlord may be more likely to exercise some leniency toward your situation because you are a reliable and trustworthy tenant.
Many landlords will be more likely to take a pay cut from a trustworthy tenant than to take on a flakey tenant full-time.
Step 5: Do Your Market Research
Use platforms such as Zillow and Craigslist to see what comparable apartments are going for on the market in your area. When you initially approach your landlord, they will likely be hesitant to accept your ask for a reduced rent payment due to “market conditions” or some similar excuse. So, do your homework and find out what the going rate is for units similar to yours.
Ideally, you should approach your landlord with printed listings of apartments in your area that are significantly lower in price than what you’re currently paying. This way, you will have concrete examples that refute their “market price” argument.
Step 6: Settle on a Compromise
When negotiating your rent with your landlord, you have a few options to choose from that offer distinct benefits. Depending on your financial situation, you can lean on any of the four options below:
Rent deferral: Your rent payments over a defined period of time are postponed until a later date.
Rent reduction: The amount you owe every month for the remainder of the lease is reduced to a more affordable rate.
Loan conversion: The past-due payments that you owe your landlord are converted into a loan that you will owe your landlord over time at interest.
Rent abatement: Rent payments are suspended for a defined period of time (e.g., 3 or 4 months until you have an income source again).
Discuss these options with your landlord and ask them which option works best for them. If your income has been reduced, chances are a rent reduction scheme will work best for all parties. However, rent deferral may be the better option if you have lost your job and no longer have a steady income.
Although these are difficult times, it’s important that you keep your cool and not let emotions get the best of you. Always be respectful and courteous when negotiating with your landlord, and understand that they’re humans too who always have a mortgage to pay.
Often, rent negotiations aren’t between a rich fat cat and a lowly tenant. In many cases, landlords struggle just as much as tenants. So, approach your landlord with patience and respect while understanding that compromise is the only viable solution.