cant pay rent
Updated September 23, 2021

What to Do If You Can’t Pay Rent

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You may have seen the recent report that more than 40 percent of Americans are at risk of eviction, and we’re currently in a scary situation for tenants around the country. The eviction moratorium ended last month, the second stimulus talks failed, and Donald Trump’s executive order on evictions and housing basically isn’t doing anything. Check out this link for more on Trump’s executive order.

And beyond that, the CARES Act eviction moratorium didn’t even apply to everybody!  It only applied to those who participate in federal housing assistance programs or live in a property with a federally-backed mortgage.

So if you’ve missed rent or you’re not going to be able to make rent in the near future, the most important thing is to come up with a plan and act quickly. This article is going to be all about those first steps and the resources you should be aware of as a tenant.

Laws and regulations vary widely between states

Now one issue with writing an article on this topic is that different states treat landlords and tenants very differently. In some places, New York for example, you can actually apply for rental relief if you meet certain conditions. For their program you need to have had an income under 80 percent of the median in your area both on March 1st and when you send in your application. You also have to be putting at least 30 percent of your income toward rent and have lost income due to COVID-19. Right after you finish this video, before you do anything else, look into rent relief programs in your state, county or city to see what’s available. There could also be private charities working to support tenants monetarily or with pro bono legal services.

Every lease is different

Another important factor to consider is the specific language of your lease, since different landlords have very different terms and requirements. For example, you may be allowed to pay rent for a certain period after the beginning of the month with no penalty, and there may be a specific late fee if you can’t pay on time. You want to be 100 percent clear on all the relevant information before you start taking action.

Is the eviction moratorium still in effect?

The same thing is true for evictions, your landlord may or may not be able to start the eviction process depending on where you live and your specific circumstances including the terms of your lease. The federal government’s moratorium on evictions, which applied to people living in a building covered by a mortgage backed by the government, expired on July 24th. Even then, they’ll need to give you 30 days of notice before evicting you, so you’ll actually have at least until August 24th. Until Congress acts on this or until something comes of all the various suggestions in Trump’s recent executive order on evictions, any additional protection against eviction would have to come from your state, county, or municipal government.

Understanding evictions in your state

Here in California, for example, the eviction ban was originally set to last for 90 days after the coronavirus emergency, which is obviously still ongoing, but a report recently came out that the state Supreme Court could take action to end it as soon as August 14th. Of course the state legislature could step back in and create new guidelines, but it’s hard to say what that would look like or when legislation would be passed. Some states haven’t taken any steps beyond the moratorium set by the federal government, but even in those states certain counties and cities have their own regulations. So this is an ongoing development around the country as governments at all levels try to come up with the right response to the economic and public health ramifications of the coronavirus pandemic.

That being said, they can’t evict you immediately, and again that process depends on where you live. In New York, your landlord has to give you at least 30 days’ notice if you’ve been living there for less than one year, 60 days’ if you’ve been living there for between one and two years, and 90 days if you’ve lived there for more than two years. A tenants’ rights group called Eviction Lab has some excellent information about protections in different states, and you can use this link if you want to look at their COVID-19 Housing Policy Scorecard. Some landlords will try to evict tenants illegally to get around those restrictions, and unfortunately renters who don’t know their rights tend to make easy targets for illegal evictions.

Avoiding court

But even though it’s good to know the laws in your state, the reality is that neither you nor your landlord really wants to go to court. This isn’t to say that your landlord won’t be willing to evict you, or that they’ll let you pay rent whenever you want, or even that you should never consider litigation, but it’s usually better for both sides to come to an agreement on their own. Technically they could sue you for unpaid rent after evicting you, but the reality is that if you don’t have the full rent now, you probably won’t have it then either, and they’ll end up spending a lot of money on legal fees for not much of a return.

Keep in mind that millions of people are struggling to make rent around the country right now, and it isn’t exactly easy to fill an apartment at the usual price when so many people are in dire straits. Your landlord would much rather get something than nothing, and if you’re watching this video you probably don’t want to be evicted. Of course some cases will end up in court, that’s inevitable, but in most circumstances you want to do everything in your power to avoid that outcome.

Strength in numbers

At this point you might be expecting me to tell you to start by talking to your landlord, but I actually don’t think that’s always the best advice. Especially in times like these when financial trouble is so common, working together with other tenants in your building is sometimes the most effective option. Now if your landlord has laid out their expectations and everyone in the building seems pretty much OK with that, then maybe you need to talk to the landlord directly.

But there’s a good chance that your neighbors are in a very similar situation, and there’s always strength in numbers. Advocating for your rights as a renter is much easier when you have a group of tenants working together, and you’ll also be able to provide other types of mutual aid as people struggle with these circumstances.

Some people in your building may not know as much about renting, they might not understand the eviction process, so sharing information, sharing supplies, just generally supporting each other goes a long way. There may also be tenants’ unions or other support groups in your area, particularly if you live in a major city, so don’t forget to check out those resources. Some tenants group up with neighbors in their building as well as with people who live in other buildings owned by the same landlord, and again, the more you organize the better you’ll be able to prepare for any disputes or court cases.

Think about it this way—if you tell your landlord that you won’t be able to pay unless they cut the rent by 25% for the remainder of the crisis, they might not have much of an incentive to work with you. But if he or she hears the same thing from all the tenants in the building, or even better, all the tenants in multiple buildings, well you’ll just have a lot more leverage when it’s time to negotiate. You’ll also have a better chance of pooling money together if the case ends up in court. So before you talk to your landlord, and especially before you commit to anything, you should make an effort to talk to the rest of the tenants in your building.

Talk to your landlord

From there the next step should typically be letting your landlord know about your situation. Again this is easier if you have other tenants with you, but either way you want to be as transparent as possible. Let them know where you’re at, what you’ll be able to pay now, and what you expect in the future.

Put it in writing

It’s really important to have a written record of conversations with your landlord, so make sure to do this over text, email, something you’ll be able to refer back to later on. If they do agree to something, you’ll be able to hold them to that agreement later on. It will always come down to your word against theirs if you don’t have something on paper, so you should always avoid negotiating over the phone or even by talking in person unless you bring a  written proposal for them to sign.

Landlords know what people are dealing with right now, and in my experience they’re willing to work with people who are willing to work with them. Of course every landlord is different and some aren’t going to engage with you, but it’s always worth trying to negotiate directly. If things escalate later on you’ll have a record of your attempts to work with your landlord, and under the circumstances landlords won’t look good in court if they didn’t make an effort to meet in the middle. Don’t promise too much, don’t put yourself in a position where you won’t be able to make rent again next month and you’re stuck in the same situation. Just be very open and tell them how much you could realistically pay moving forward.

Now in an ideal scenario at this point, your landlord understands, maybe they received forbearance on the mortgage, they can cut you a little slack. In that case just stick to the plan, keep updating them if anything changes, and do your best to make regular payments. If possible, pay your rent in certified checks so you have a record of when and how much you paid.

Fighting evictions

On the other hand, and again hopefully this doesn’t happen in your case, but your landlord isn’t legally obligated to accept reduced rent, and they may try to move forward with an eviction whenever that’s possible in your area. Being evicted is obviously a scary situation, especially right now, but it isn’t the end of the world.

Evictions are heavily backed up in many places right now, housing courts may not even be fully reopened yet, so you have time and you have resources. But it’s even more important to move quickly when your landlord is taking legal action to remove you from your residence. The first thing you want to do is get in touch with a lawyer who specializes in evictions and tenants’ rights, again free legal services are available in some places, but even if that’s not an option it may be worth paying a lawyer if you think you have a case.

So again there’s no one-size-fits-all way to fight an eviction, especially with readers from around the country and even around the world. Ultimately it’s going to come down to the laws and regulations in your area. Here in California, for example, you can legally withhold rent if there’s an issue in your building or your unit that makes it uninhabitable. This depends on the value of the repairs, but you could get a significant reduction in rent if you’re able to prove that there’s a serious problem that the landlord hasn’t addressed, especially if you can document that they’ve failed to respond to your requests. In some cases, the tenants actually file a lawsuit against the landlord rather than waiting to fight back against an eviction. But I’m not an expert, I can’t provide legal advice. Just get in touch with a lawyer, let them know what’s happening, and see if they think there’s anything you can do.

Thanks for reading to the end of the article, there’s a lot to cover here, and I could probably write several more pieces on this topic but hopefully this cleared up some of your questions. Again so much of standing up for yourself as a tenant depends on your unique circumstances, so there’s only so much I can write that will apply to everyone.

Of course, stay tuned right here on Money Done Right and my YouTube channel for updates on this and other issues that affect your financial life. If you’ve seen my recent stimulus updates, you know that help probably won’t come through Congress, at least not right now. Who knows, maybe something will come of the suggestions in various federal agencies in Trump’s executive order, not sure, but beyond that we just have to hope that Congress will pull through for the people. It doesn’t look like that’s going to happen right now, but hopefully at some point in the future.


Logan Allec, CPA

Logan is a practicing CPA, Certified Student Loan Professional, and founder of Money Done Right, which he launched in 2017. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.

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