My husband and I live in Brooklyn, but we’ve been staying with my parents in New Jersey with our 3-year-old daughter so that they can help with child care while we work remotely. We’ve been fortunate enough to keep our jobs, although both of our salaries have been significantly reduced, and we’ve continued to pay rent on our apartment back home. But we’re facing a big crunch soon, and we have to move back. First of all, it’s pretty cramped here, but more importantly, both of our offices are “planning” to reopen at least part-time in September, and our daughter is supposed to start preschool (at least a few days a week). We’re also going to have to pay for child care when she’s not in school. (She used to go to day care, but it shut down, and everywhere else that we’ve looked isn’t accepting new kids.) All of this is basically untenable with our reduced salaries unless we get a break in our rent. How should we approach this? Our lease is up in March, and I really don’t want to have to move, which would also be costly and even more disruptive. A rent reduction would really help us out, but I also don’t want it to backfire somehow. What should we know before we start this process?
Welcome to the slow-motion train wreck that millions of American renters are facing! You’d think that the sheer number of people in messes like yours would force someone to take action (like, say, a federal governing body), but instead, we’re barreling toward a national housing crisis with our eyes wide open.
Yes, some local governments have made it illegal for landlords to evict tenants who can’t pay rent because of coronavirus-related hardship. But those moratoriums have been steadily expiring (New York’s will end on August 20). That’s bad news for the 31 percent of renters who say they have “little to no confidence” in their ability to make rent this month, according to a U.S. Census Bureau survey taken in June, and are likely to be left in the lurch. The COVID-19 Eviction Defense Project, a coalition of economic researchers and legal experts working to fight this problem, estimates that one in five of the 110 million Americans who live in rented households are at risk of eviction by September 30 of this year.
Hopefully, your situation won’t come to that, but unfortunately, it’s basically up to your landlord. Here’s how you can advocate for yourself.
1. Consider the relief programs currently available to you.
Many state governments (including New York’s) have stepped in to allow tenants to apply their security deposit toward their rent, which buys you a month of breathing room. Of course, it won’t solve the larger problem that you’re saddled with a rent bill befitting a drastically different economic climate from the one we live in now, but it’s a start.
There are also some new aid options for those hit hardest. Starting July 16, New York is taking applications for rental assistance from those who’ve lost income because of the coronavirus. But applicants only qualify if they were classified as low-income before the pandemic (making less than 80 percent of the area median income of their county prior to March 1). If you fall into this category, apply!
2. Get ready to negotiate.
Landlords might insist they aren’t giving discounts, but the statistics say otherwise. A recent analysis by Streeteasy found that 24 percent of New York City rentals were discounted in May, a major increase from last year. The size of the discount rose, too, from roughly 5 percent of the median asking price last year to about 8 percent percent this May. And that’s only the tip of the iceberg. The federal government’s $600-a-week supplementary unemployment payments have helped the rental market stay relatively stable for now, but they expire at the end of July.
In other words, many landlords will eventually be forced to make deals if they haven’t already. Elizabeth Donoghue, a New York attorney who specializes in tenants’ rights cases, says that she recently negotiated a significant “COVID discount” on rent for one of her clients. “COVID has clearly reduced the value of property in New York, so I said to my client’s landlord, ‘Look, we could probably get another lease for less money right now. My client is willing to stay, but we have to do it at a new negotiated rent.’ And we agreed on 25 percent less than they were originally paying.”
Donoghue recommends looking around online — how much has the rental market dropped in the area where you live? “Go on StreetEasy and see what comparable units are renting for in your area right now,” she says. “That way, you can make an argument based on the perceived value of your apartment, as well as your own financial situation.”
She also advises that you check your apartment’s rent history through the Department of Homes and Community Renewal, which you can request online (the department will mail you the documents). “Your rent history will show whether your apartment is regulated, and whether you are being charged the proper rent amount,” she says. “Sometimes that information will give you leverage to negotiate with your landlord.”
3. Know your rights — and your landlord’s.
Tenant law in New York does put you on the hook to ride out your lease at its full contractual amount. The only loophole is that if you move out for any reason, your landlord is legally obligated to “mitigate damages” by finding a new tenant as soon as possible. If they do, then you only have to pay for any months that your former apartment sits empty (or, if the new tenant is paying less than you did, you’ll owe the difference).
Considering you don’t want to break your lease, this is all just background information. But it’s important to consider that your landlord doesn’t have much to lose here, besides the fact that it would be bothersome and time-consuming for them to sue you in housing court if you didn’t honor your rent contract (not to mention annoying for them to find a new tenant, especially at a time like this). So you’re asking for a favor, albeit one they should grant if they’re reasonable.
4. Start the process as soon as possible, and allow for wiggle room.
“It’s best to renegotiate your lease as soon as possible, before you get into trouble, so that you aren’t sitting around hoping you don’t get sued for the rent you owe,” says Donoghue. Also, you’ll be in a much stronger position if you haven’t yet fallen behind on payments and are still in good standing.
Still, expect your landlord to push back. “Most of the landlords our firm has dealt with over the past few months have been firm on payment of rent on time,” says Bikram Singh, a Manhattan-based attorney who specializes in real estate and landlord-tenant law. Rather than lowering your monthly bill, Singh says many landlords prefer to defer rent payments (which just passes the buck back to you at a later date — not ideal, unless you’re really desperate). Alternatively, they may agree to waive rent for a month or two, especially if you offer to extend your lease agreement. It may sound counterintuitive that they’d rather give you two months free than lower the bill, but that’s because reducing the monthly rental fee will set a new benchmark that can make it harder for them to raise it back up to its former amount again. It’s an option that you should be prepared to offer if they won’t budge otherwise.
And finally, if you do succeed in finding a compromise, make sure to get it in writing! “An amendment to the lease should be done to reflect the new rent,” says Singh.
5. Have a fallback plan.
No matter what, you should come up with a plan B — whether it’s to stay at your parents’ house for longer (and negotiate that with your workplace), or move someplace cheaper, as unappealing as that sounds. This plan B is known as your BATNA — a business term for “Best Alternative to No Agreement” — and it’s a basic negotiating tactic. You never want to agree to a crappy deal just because you have to; you always want a BATNA up your sleeve so that the other person knows you’re ready to walk away if they don’t meet your terms.
Very worst-case scenario, you may need legal help if your bills start piling up. “If you can’t reach a resolution, the landlord will file a nonpayment proceeding in court and ask for everything to be paid at once,” says Singh. Most of these types of cases are settled with a payment plan, she adds, but you’ll still want to enlist an expert — you can contact the New York Legal Assistance Group for information about free legal services for landlord-tenant cases. But hopefully your landlord is more rational than that — they certainly should be, given the circumstances.