Rent Sense: Rent is due, now what?
By Neil Fjellestad & Chris De Marco
FBS Property Management
So, what happens if you lose your job, you have been living from paycheck to paycheck and rent is due on the first? You need an action plan.
• Prioritize outstanding financial payments. Your rent payments are probably your largest household disbursement.
• Failure to meet this obligation can have short- and long-term negative implications. Examples include: late fees plus eviction costs; moving costs; bad credit that will haunt you for years leading to the inability to qualify for rental housing, utilities and major purchases in the future. All of these are probably harder to fix than a job loss.
• A real estate lease is a legally binding document and is taken very seriously by credit providers so figuring out how you’re going to meet your obligation deserves your priority attention.
Now, here’s the good news. Unlike many of the providers of goods and services (banks, utility companies and national accounts) the rental owners, operators and managers to whom you pay your rent are local people that you can sit down with, they are more likely to understand your situation and are mutually motivated to keep you in your lease.
• Lay out a plan to pay your rent and present it to the same people that you already know – do this sooner than required (don’t make them start chasing you for the rent before you step forward). This says that you recognize your responsibility and are being proactive to confront the current situation. If this plan calls for a series of installment payments, be specific and realistic about the amounts and payment schedule. If you can provide a guarantor for this plan supply specific qualifying information about this individual as well. Offer to sign an addendum to your lease that spells out the specifics of your proposal and live up to every term.
• Don’t be bashful about indicating that – as long as you perform as agreed – you would like assurance of a positive rental reference when the time comes. This demonstrates that you respect the lease and your continued good credit.
• If you need to terminate your lease early or need to consider relocation after a period of efforts to find new employment don’t hesitate to telegraph this information early. This gives you a point of reference should you need to confront this alternative later.
Rental owners, operators and property managers are generally realistic about expectations and particularly so in the current time. Show them the respect of transparency and straight talk and you will gain an ally in making the best out of a difficult situation.