How to Negotiate Your Rent With Your Landlord During the COVID-19 Pandemic

In the face of this public health crisis, many people have been laid off, furloughed, or have seen their business collapse, facing down potentially months of bills with no income.   Recent statistics show that 22 million Americans are now unemployed. Although many states are banning late fees, penalties, or other charges for tenants for late payment of rent, this does not absolve you from having to pay rent entirely.  Turning to your landlord to negotiate rent might be your best option. Read on for how to negotiate rent for yourself and some of the protections that may be available to you. 

Communicate Openly

Have an open and honest conversation with your landlord.  Communicate earlier rather than later. The sooner you set up a time to discuss your situation, the better it could be for you. Talking numbers with your landlord can be intimidating, but remember that it is in the landlord’s best interest to keep a good tenant for their property then to try and find new tenants especially now.  Evictions are costly and there is a lot of uncertainty about how and when they will find someone new to take over the space during a global pandemic. 

Approach your landlord with an open and understanding mindset. Take the time to understand more about your landlord’s financial position.  Often, they are a smaller investor with only one or a few properties and have their own loans or mortgages, insurance, and taxes they need to pay and may rely on your rent to pay their own bills.   

Set the stage for a negotiation, rather than a confrontation.  When you approach the conversation with an aggressive opening such as “This month I’m not paying rent, sorry,” the landlord will feel more resistant to your claims for sympathy.  Instead try to approach it with a more open dialogue like, “I am sure this is a very stressful time for you too. I wanted to talk to you because I’ve been laid off. I can pay X but I’m unsure when I’ll be able to go back to work.  Is there anything we can work out?” This offers your landlord more insight into your situation and offers him or her the opportunity to work with you.

Let your landlord know you are equally sympathetic to their situation. A spirit of collaboration will have a positive effect on your relationship moving forward and beyond these uncertain times. Acknowledge that this situation is unprecedented and be clear that your ultimate goal is to begin paying rent again as soon as possible.  

Understand Your Options

A lease is a legally binding agreement. Both landlords and tenants are incentivized to preserve their existing relationships and lease agreements. Pursuing other options could be costly and time consuming.  Asking your landlord to allow for a rent holiday or abatement is not always as easy for them as it sounds. If he or she has a mortgage on the property their lender needs to approve any lease adjustments which can take time. 

Working out a potential compromise that works for both parties requires you to know the different options that are available. 

Rent Abatement. If a tenant is significantly past due on rent payments, a landlord may agree to forgive a certain amount of the past due rent if the tenant remains current thereafter. 

Rent Reduction. The landlord can reduce the tenant's rent for a portion or all of the term left on the lease. 

Rent Deferral. In this case, the landlord can defer a portion of the tenant's rent, but would require them to repay the rent deferred at a later time, either in a lump sum or by increasing subsequent payments. Also known as a rent holiday.

Loan Conversion. Rather than abating past due rent, a landlord may agree to convert the past due rent into a loan payable over time, however, the tenant continues to pay the current rent.

As previously said, the landlord may not have the funds to pay his or her own mortgages without your rent payment and risk losing the property entirely.  Instead, try asking for a deferred payment plan or offer to pay a portion of your rent. You could ask to defer your rent entirely for a predetermined period and then pay back a percentage of the amount due over a defined period of time. 

For instance, you could ask to defer your rent payments for the next two months, and then offer to pay that amount back in increments over the remainder of your lease. If you have 4 months left, you could pay 50% of the two month deferral back each month thereafter until the end of your lease.

Try to avoid making any long-term commitments right now.  Landlords can protect the long-term value of their asset by establishing a relatively short period of rent relief.  You could strike a deal for the next month and revisit the issue again next month to determine next best steps. Agreements could also be impacted by the prospects of government support.   

Next Steps

Negotiating your rent with your landlord could help you weather the financial storm that is coming.  Due diligence on behalf of the landlord may be necessary and they may ask to see financial evidence that you are unable to pay rent. With many people trying to take advantage of this critical situation, landlords will do this in order to protect themselves.  If you are in a financial bind, procuring these documents should not be a problem and you should be prepared for this ask.  

Once you get confirmation that the landlord is ready to move forward with your agreement, you’ll want documentation.  Get confirmation in writing that your landlord will not issue any default notices for nonpayment of rent or otherwise before you receive the lease amendment. It is important that any changes to your lease, especially rent payments, are documented. 

If your landlord is apprehensive about setting up a payment plan for you, there are nonprofit organizations that can help with rental assistance.  Try to access all the money and assistance that is available to you during this time. There is no shame in asking for help.

A problem shared is a problem halved. 

The burden of this pandemic is not singular. Every aspect of our lives has been affected. Both landlord and tenant are in a tough situation and will need to meet somewhere in the middle in order to help each other during this time. Negotiation and open communication can go a lot farther than striking, especially when it comes to maintaining a cordial relationship between landlord and tenant. 

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NOTE: 

State and municipal governments have stepped up to implement temporary tenant protections.  At this time, at least 30 states have issued moratoriums on evictions which means renters cannot be physically removed from the property for non-payment. Some states have barred evictions entirely while others are putting off evictions if the tenant has been diagnosed with coronavirus or has lost their job as a result of the pandemic.  Yet these measures do not prevent rent from being due.  To find out what protections your state and local government are offering, check out the regularly updated resource from Eviction Lab by Princeton University.

Disclaimer: The materials available in this post are for informational purposes only. We are not lawyers and do not propose to provide you with legal or business advice. As such, the information in this post should not be used as a substitute for obtaining such advice. In particular, we would suggest you contact your attorney to obtain legal advice with respect to the matters discussed in this post.