Millions of Americans are out of work and millions more are suffering economic hardship during the coronavirus pandemic. Even though the majority of people were able to pay rent in April, a recent study by Apartment Guide found that 4 in 10 renters are concerned about their ability to pay rent over the next few months.
While the colossal $2 trillion dollar CARES Act relief package passed by Congress allows for financial help for many, including a general stimulus payment for all as well as an extra sum each month for most Americans on unemployment, times are still tough.
Fortunately, there are a number of flexible payment options and rent deferral plans a number of landlords have instituted to help people pay rent and stay in their homes. If your landlord or property management haven’t offered relief plans to you, here are five flex pay plans for you to suggest to them as alternatives to missing a rent payment.
1. Deferring rent payments
Even though nearly 30 million Americans lost their jobs within weeks, many, if not most of us, have an expectation of returning to work once the pandemic is over. Because of these factors, many landlords have been allowing rent to be partially or entirely deferred an extra 30, 60 or 90 days.
If you wish to defer your rent and your landlord hasn’t actively offered the option, approach them with a detailed plan based on your current needs and limitations and when you believe you’ll be able to make up missed payments. Unless you’re in dire straits, offer to pay at least some of your rent. If you offer something, they’re more likely to agree to your plan. Give them a specific repayment date, and if that date approaches and you believe you will be in need of another deferment, discuss it with them as soon as possible.
There is a chance the landlord will request a late fee to be paid at the time of settlement. Feel free to ask that it be waived if you’re a good tenant who has previously always paid on time.
A rent deferral plan to push your rent payments an extra month or two, of course, doesn’t mean you never need to pay your back rent. It’s simply a plan that says your landlord will help you now by not collecting but is expecting full repayment of missed rent (or even as a guarantee of lease renewal) when you’re back to work and on your feet. It’s a win/win for both parties: You have one less expense to worry about while you’re waiting for work to restart (and not winding up on the street) and your landlord knows they’ll be able to get paid eventually.
2. Use your security deposit
When you signed your lease, chances are you put down one or even two months’ worth of rent as a security deposit. If you are having trouble paying your rent, ask your landlord or property manager to use a portion of that payment to cover the amount that you owe.
Some states have even mandated that landlords use security deposits to cover rent shortcomings. On April 24, New Jersey Gov. Phil Murphy issued an executive order requiring landlords in that state to convert security deposits into full or partial lease payments for renters who request to do so. Additionally, those that utilize this benefit cannot be asked for an additional security deposit until six months after the state of emergency is lifted or the end of the lease period.
“[Your security deposit] is money that had been paid up front to secure a lease, and during this emergency, renters should have the ability to tap this deposit to help them secure their place in their home.” – New Jersey Gov. Phil Murphy
Just remember, if you have damage to your apartment when you move out, you might be forced to pay that expense out of pocket if your security deposit is used to cover your rent.
3. Reduced rent payment schedules
It may seem counterproductive in a time where incomes are reduced and people are out of work, but a change to shorter payment schedules could greatly reduce budget anxieties.
If you’re unsure or insecure about your week-to-week income, it could benefit you to ask your landlord if you could pay rent in shorter increments, say every two weeks or some other customized interval. This may ease your ability to navigate an erratic income that may vary from week to week. By paying bi-monthly or every week, households are able to better manage all their other expenses compared to their up-to-the-moment fluctuating work income.
If you believe this would benefit you, have the discussion with your landlord or property manager as soon as you can, as it may require changes to automated payments or adjustments to online rent portals, especially if you lease from a large rental company.
4. Giving discounts for on-time payment
As opposed to being cash-strapped at the moment, if you’re in a position to pay your rent in full this month but are unsure if you’ll have your regular income in a month or two from now, ask your landlord about incentivized on-time (or even early) payment. Ask if they’ll give you a qualifying discount on rent, like a certain amount or a certain percentage, rather than push your limits and their patience by having to pay a week or two late.
Your landlord wants to work with you, they really do. They’re human just like us and they don’t wish to see you struggling. Plus, from the business side, the last thing your landlord wants to do is lose a good tenant. It’s costly and difficult (especially now) to evict a tenant and even harder to find another good one to replace you. They don’t wish to let your apartment sit empty, so they’re likely to be willing to help.
“At the end of the day, we want to maintain good relationships with our tenants, so if they are struggling then please come talk to us. We don’t have any desire to evict good tenants and understand this is a very unique situation we find ourselves in, so let’s work together to find a common solution that works for everyone.” – Shravan Parsi, CEO and Founder of American Ventures
This would benefit both the landlord, who would have more cash on hand earlier during these uncertain times, and you the tenant, who would have an extra bit of budget money on hand if personal economic situations worsen.
5. Paying with a credit card
While many landlords, especially the big rental property companies, have moved to online portals and automated payments, a significant number of renters still pay by check.
Many landlords feel the risk and costs of accepting credit cards just aren’t viable. Every credit card transaction or Square session comes with a fee that your landlord would have to pay — plus, a tenant can request a reversal of charges from their credit card company up to six months after payment in some cases.
But amid this crisis, submitting rent by credit card gives tenants the ability to pay their rent now and not have to pay off a credit card for months. This could be of great help to anyone needing a bridge from a current layoff to a future rehire. Knowing this, many landlords have started temporarily accepting rent payment by credit card, many without passing fees on to their tenants. If this may be of benefit to you, reach out to your landlord and ask if they would consider credit card payment.
If you choose this option, take care to make regular payments to your credit card company. Don’t view this option as kicking the can down the road. It’s easy to let credit card debt pile up during a crisis, so speak to a financial advisor if your credit card debt feels like it’s getting out of control.
What’s your plan?
Whatever your circumstances, should you find yourself unable to pay your rent as usual, don’t hesitate to approach your landlord to discuss a rent deferral plan. It’s in everyone’s best interests to resolve this situation in a timely — and mutually beneficial — way.
