Rent Payment Delay: Options For Tenants

The coronavirus pandemic has had an impact on many aspects of Americans’ day-to-day lives, affecting everything from health and welfare to social and leisure activities. Many people were, and continue to be, severely impacted by reduced income and even job loss, making it hard for many renters to pay their rent on time. Renters who find themselves falling behind on their rent in 2021 are certainly not alone.

If you’re facing late fees because you’re behind on your rent, you may be worried about receiving an eviction notice. Fortunately, there are tools at your disposal to help you avoid eviction. You can work with your landlord to come up with a payment plan that will make your month's rent more affordable, for instance, or you can apply to special rental assistance programs for help with making your payments. You can also familiarize yourself with the regulations put in place to protect renters during the COVID-19 pandemic.

When You Cannot Afford Rent Payments 

Knowing that you’re unable to make your rent payment by its due date is a horrible feeling. But like many other challenges in life, it’s best dealt with sooner rather than later. The moment you conclude that you’ll have trouble making your monthly rent, you should notify your landlord. Trying to ignore the situation, while tempting, isn’t an approach that will solve your challenges. The sooner you begin to negotiate a rental payment arrangement with your landlord, the more likely they’ll be willing to work with you. A proactive approach can help you avoid eviction and/or reduce any potential damage to your credit history stemming from nonpayment of rent.

Work Out A Payment Plan

If you can’t afford to make rent payments, the first thing to do is ask your landlord if you can find a solution together. It might seem like a longshot, but remember that in many cases, avoiding the eviction process will be in their best interest as well.

The eviction process isn’t free for the landlord. Landlords may also have to pay mortgage and taxes on a rental unit regardless of whether it's generating income. This means that your landlord has an incentive to keep you as a tenant, even if it means receiving less rent or receiving rent payments later than expected.

A rental payment plan can take many forms, but will often result in partial or delayed rent payments over a specific period of time. If your landlord is agreeable to a payment plan, be sure to get the terms in writing. Having evidence of your agreement will come in handy should your landlord change their mind and decide to evict you for partial or late rent. 

It's also good to remember that your lease could contain provisions that impose fees or penalties for late or missed rent payments. During negotiations, you’ll want to take those added costs into account and ask your landlord to waive them or perhaps collect them later on.

Lastly, never send a check that’ll bounce. This will make your landlord upset and cause them to lose trust in you. Don’t forget that if you write a check knowing that there are insufficient funds in your account, you are breaking the law. Your bank may also charge you a fee for writing a bad check.

Obtain Financial Assistance From Relief Programs

If you can’t arrange a payment plan with your landlord, don’t lose hope. There are nonprofit organizations, state agencies, and local programs that offer financial assistance to individuals struggling to pay their rent. This has been especially true during the coronavirus pandemic during which many families have dealt with a layoff or other loss of income.

The U.S. Department of Housing and Urban Development (HUD) has several rental assistance programs. Many of these offer reduced rents for low-income tenants. There’s also the Emergency Rental Assistance Program from the U.S. Treasury that was created in response to the coronavirus pandemic. It provides funding to states and localities to operate rental assistance programs which are then used to assist families in paying their rent and utilities. 

Eviction During The Coronavirus Outbreak 

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) placed an initial postponement on eviction activity. The original deadline for this suspension has been extended several times by the U.S. Centers for Disease Control and Prevention (CDC). The most recent deadline for the federal eviction moratorium expired on June 30, 2021.

Because the federal eviction moratorium has now expired, it is especially important to check if your state has imposed an eviction moratorium of its own. For instance, New York passed the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 and the COVID-19 Emergency Protect Our Small Businesses Act. These laws have imposed a suspension of evictions that expires on August 31, 2021.

If your state has a moratorium in place, this doesn’t mean that all eviction activity has stopped completely. A landlord may still have the right to evict a tenant for violating certain provisions of their lease as long as that violation doesn't relate to the coronavirus or a financial hardship related to the coronavirus. For example, if the tenant is using the property for illegal activities, the landlord could still be allowed to evict the tenant.

Whether an eviction moratorium is in place or not, the best thing to do if you’re facing a threat of an eviction is to speak with your landlord. This approach may go a long way toward preserving your landlord-tenant relationship if you’re forthcoming about your struggle to pay rent for a short period of time. But, if talking with your landlord doesn’t work, you should also consider getting professional legal advice. Many lawyers offer free consultations. These opportunities will allow you to better understand the legal issues you’re facing and what options you have available to you at this time.

Consumer Bankruptcy Reform Act of 2020

Also worth mentioning is the Consumer Bankruptcy Reform Act of 2020 (CBRA). This is currently only a proposed law, which means it has been introduced in the Senate, but has yet to be voted on. The bill is designed to make major changes to help borrowers and consumers. Some of the major protections proposed by the CBRA include:

• Replacing Chapter 7 and 13 bankruptcy with Chapter 10.

• Streamlining the bankruptcy process to reduce filing costs.

• Allowing borrowers to sue creditors that attempt to collect a debt that has already been discharged.

• Making it easier for tenants who are behind on rent to avoid eviction.

The CBRA would treat landlords as unsecured creditors during the bankruptcy process, because unlike with a mortgage loan, a tenant has no claim of ownership on the property they are renting, and therefore no ability to use the property as security against the loan. As long as the tenant isn’t more than 6 months behind on rent, the CBRA would allow them to stay in the home without having to catch up on missed rent payments.

Let’s Summarize... 

If you’re behind on your rent payments, you have several options available to help you and your family members stay in your home. One option is to explain your situation to your landlord and work out a payment plan. Another possibility is to get help from a rental assistance program. Finally, your state may have a temporary moratorium on evictions due to the coronavirus.

To learn more about what legal rights you may have, don’t hesitate to speak with a tenant’s rights or bankruptcy lawyer. No matter what path you choose, don’t wait. Acting quickly can help to preserve your options and protect your rights.