Rent Forbearance can be a viable solution for homeowners and renters, especially during unexpected economic hardships.
The COVID-19 pandemic of 2020 has been one of the most drastic occurrences many have had to face in a lifetime Businesses, schools, and community outlets are largely closed for business as families face quarantine confinement. Many have lost jobs or been laid off as a result.
Whatever the situation, your income may have been dramatically affected, Many tenants (and homeowners) are in dire straits. However, bills including mortgage and rent must still be paid.
Luckily, landlords and tenants have options. It is in the best interest of both the tenant and the landlord to work together and communicate effectively with each other to work towards a plan.
Don’t Panic, Educate Yourself
Be aware that you may be able to make ends meet with the coming stimulus check. Eligible people will receive funds from the government starting in the month of April.
Stimulus Check Amounts:
Married Filing Jointly-$2400
Dependants (under the age of 17) -$500/each
There Are Some Income Limitations On The Stimulus Check:
Individuals earning $99,000/yr, you might not be eligible.
Head of Household earning $135,000/year, you might not be eligible.
Married Filing Jointly, earning $198,000/year, you might not be eligible
These much-needed stimulus funds may be just the help you need to meet your rent payment. The stimulus package will have tremendous impact for many.
Additionally, There Are Other Options That May Help You Avoid Losing Your Home:v
Enhanced Unemployment Benefits
The CARES Act extended the amount of time you can receive unemployment up to 36 weeks. You will receive an extra $600/week towards your unemployment benefits. The first week of unemployment is now covered. The week between the date you stopped work and benefits kicked in. These additional benefits should help renters be able to make their rent without having to request a forbearance from the landlord.
If these additional resources do not suffice or don’t apply to your situation, renters may request a forbearance from the landlord. The last thing you want is for the landlord to default on their mortgage. Landlords do not want to evict. It’s a tremendous hassle and finding another tenant is difficult. Realize that your rent is still due but you do have options.
Request Rent Forbearance
This is an addendum to the lease that gives the tenant the ability to opt into a payment plan, paying equal portions each month after the deferment period. Ask yourself, “How much can I feasibly pay towards my rent?” For example, if the rent is $1000 and you are able to pay only $300, the balance will be divided evenly into ten payments, so after the one month deferral, the rent payment will be $1070/month for ten months.
Sometimes a one-month deferral is not enough time for you to get back on your feet. In this case, some landlords will extend a rental deferment a second time. The most important key is to communicate with your landlord. They are just as worried about the situation as you are. The worst thing you can do is bury your head in the sand and avoid the issue. Bad news never gets better with age. No matter what the news is, your landlord wants to hear from you. The last thing you want is for the landlord to default on their mortgage. Landlords do not want to evict. It’s a tremendous hassle and finding another tenant is difficult. Realize that your rent is still due but you do have options. Together, you can work on a plan to get things back on track.
For Extreme Cases
According to the CARES Act, landlords cannot evict for reasons of lack of payment as a result of financial hardship. The bill also states that there are to be no late fees, and homeowners financed by federally backed programs like Fannie Mae and Freddie Mack will be granted mortgage forbearance.
However, it’s unrealistic to think that there won’t be isolated issues with certain, unreasonable landlords. And while the law will be on your side in these cases, this probably isn’t the best time for a legal battle. If both parties cannot come to an agreement and the contract must be breached, short term rental properties are a good option until the Coronavirus isolation is over.
Working with a landlord on rent forbearance is the best way to handle the current challenges facing society, and most landlords should be accommodating with these requests. After all, the national government is mandating that that should be the case. With that said, money is a struggle for everyone these days; if we can all be reasonable and work together, we can all make it through this pandemic in one piece.