Rental Lease Drama: Know Your Rights and Negotiate

With two-thirds of New York City’s population being renters, the coronavirus pandemic was always going to pose a problem. Thousands of people are still out of work, while others who managed to retain their jobs are now making less than they did before. The pandemic has hit many renters, especially hard—many currently unable to pay rent or keep to their other lease agreements. In response, many tenants are now looking to renegotiate their lease or find a new home on better terms.

Landlords are also in a difficult situation, scrambling to retain what tenants can keep their apartments occupied. It’s a situation where now everyone has bargaining power. To help you through this, we’ve outlined steps you can take to help you negotiate with your current or new landlord.

Preliminary Steps

Whether you’re trying to renegotiate your current lease or sign a new one, there are a few preliminary steps you should take beforehand. These will lay the groundwork to give you the best chance of a favorable outcome. As teachers and parents love to say, get your homework done ahead of time.

Know Your Rights

Regardless of your circumstances, this is something that every NYC renter has to know. Your renter’s rights are also subject to change, so you need to stay abreast of developments. Right now, the most important rights you need to be aware of are:

• Landlords cannot evict you without a court order – A moratorium currently exists on all evictions until at least August 20. If you have a pending eviction, then, by and large, it cannot be enforced until after the moratorium.
• Unfortunately, it doesn’t apply to everyone – On June 20, a change was made to the moratorium that extended it until August 20 and limited who it applied to. In addition, it now only applies to certain qualifying renters, as set forth by a new executive order. Chief among the changes is that the moratorium now only applies to tenants who have suffered financial hardship because of COVID-19 or qualify for unemployment. These changes go into effect on July 6.
• You must be notified in advance if your landlord will raise your rent – Your landlord cannot raise the rent above 5%, or refuse to renew the lease, without first notifying you. The longer you’ve been a tenant, the more notice you must be given.

Have all Your Documents on Hand

Much like a job interview, you need to convince your landlord that you’re a trustworthy and responsible tenant. By being prepared and having all your personal and financial documentation on hand, you make that task much easier. This includes:

• Past rental history
• Credit score
• Referrals from past landlords
• Bank statements and pay stubs

If you have any documentation that specifically ties your loss of income to the COVID-19 pandemic (a letter from your employer, pay stubs showing lost hours, proof of employment in an industry that’s been forced to close), then include those as well.

How to Negotiate

Use Whichever Communication Method is Most Convenient for You and Your Landlord

Large companies with thousands of apartments will likely have their hands full dealing with hundreds of similar requests from other tenants. In such a case, you’re better off sticking with email while communicating with your landlord. This way, you’ll get everything in writing as you wait for your request to be processed.

Mom-and-pop landlords might be different, and it depends on how comfortable you are negotiating with them. Of course, dealing with someone face-to-face is always easier, but that doesn’t mean you should totally discount doing things over the phone or through email. For instance, you could start by sending an email to summarize your situation and what you’re asking for. Then, once communication has been established, you can schedule a Facetime or physical meeting to discuss your grievances properly.

Keep Things Polite

Your best chance of coming out on top with this is to keep things polite. Tenants across the country are struggling in the wake of the pandemic, but so are landlords. Refrain from using any threatening language, and keep in mind that your landlord is a person as well. Negotiations always go smoother when they come from a place of mutual respect and a willingness to compromise. Also, be fully transparent about your situation. You want your landlord to see that you’re really in need of help and aren’t just trying to squeeze any benefit out of them. A great way to start negotiations is with something along these lines:

“Hi Mr. Landlord. I know you probably have your hands full right now, but I need to discuss with you the terms of my lease renewal. I’ve been a responsible tenant for X years, but now the COVID-19 pandemic is making it difficult for me to continue with my usual payments. I would appreciate it if we could discuss what options you have available for me so we can come to a new agreement.”

With the vacancy rate going up, landlords now have a strong incentive to retain tenants responsible and trustworthy until now. This should make them far more flexible than they were several months ago.

Make a Case for the Exact Price You Want to Pay

Your landlord is unlikely to roll over and give you what you want, no questions asked. Therefore, you have to make a case for why you need the price you’re asking. If you did your homework earlier and gathered all your rental comp data, now would be the time to present your case. If you’ve been laid off or furloughed from work, then have the paperwork ready to prove this.

You can make things easier if you also have arguments for why your landlords’ best interest is to give the price you’re asking for. For instance, if any comparable buildings with similar amenities are also coming down on prices, then ask that your landlord match those. Also, bring up the rising vacancy rate and how it’s now proving much harder to find tenants. The more information you can arm yourself with, the better your chances will be.

Leverage Your Track Record

A long-term responsible tenant is a highly valued asset by every landlord. If you can boast a long track record of paying your rent on time and keeping your apartment in good order, then use it. Landlords hate to see their apartments sit vacant for any amount of time or lose a valued tenant. Even an apartment vacant for only one month a year means a loss in income of 8.3%.

Try Going Month-to-Month

If you can’t get your landlord to come down on the rent, then maybe they’ll be open to a change in terms of your lease. With so much economic uncertainty in the landscape, many landlords are now switching their tenants’ leases to a month-to-month agreement. Although this won’t mean a decrease in your rent, it will give you more flexibility. Previously, agreements like this would usually come with a large premium tacked on. Something that tenants now have the power to negotiate themselves out of.

Try Tweaking the Lease Terms

With access to recreational and practical amenities now closed or limited to stop the spread of coronavirus, this may present a chance to tweak the lease terms. See if you can get some form of credit or a reduction in rent while amenities are disrupted.

Try to Set Up a Payment Plan

With many tenants now falling behind on their payments, landlords start to implement payment plans to make things easier. This could mean spreading a missed payment out over several months. A payment plan offers the best solution for landlords who can’t waiver a missed month because of mortgage commitments.

Another option would be to use your security deposit. Ordinarily, this can’t be used for anything, but given the circumstance, you might be able to work out a deal with your landlord. Sure, it will mean losing your deposit, but it can provide some welcome relief if you can’t make next month’s payment.

Establish a Channel for Communicating as Things Move Forward

Regardless of how negotiations go, it would help if you kept an open communication channel with your landlord. Especially as things move forward and return to normal, important questions will have to be answered, such as whether your landlord will put you on a payment plan later for missed payments or expect a lump sum payment? If they agree to a rent reduction, how long will it remain in place? When the pandemic ends or once you’ve found a new job? What will happen if you can’t find work or receive unemployment benefits by a certain date? All of these are important questions that have to be worked out with your landlord.

Breaking Your Lease

The city is abounding with cases of landlords showing more flexibility than ever before with rent. Still, if you can’t agree, then maybe you’ll have to negotiate for an early end to your lease. Breaking your lease comes with many risks, so approach this carefully and seek legal advice if necessary. Ordinarily, if you break your lease, you are responsible for the balance of the lease until a new tenant is found. This wouldn’t take long to find in a normal year, but it’s now much more difficult to find a replacement tenant with the market in a freeze.

Your best bet is to try and negotiate a deal with your landlord. For instance, you could forfeit your security deposit or pay a month or two of rent if you can afford it. But if he won’t compromise, then you may have to take your chances and break the lease. This may result in him suing you for the remaining lease balance when the courts reopen. Most cases like this end with a settlement in which you agree to pay a portion of the total you owe. The good news, though, is that any ruling against you won’t impact your credit score. The National Consumer Assistance Plan, which went into effect in 2017, means civil judgments won’t impact credit reports, though they are still public records.

Moving Out

This is hardly an auspicious time for moving, but if you’ve been left with no choice, then you’ll have to work out a way to do it safely. First, examine all the options open to you. For instance, you are moving in with family or friends, finding a temporary rental, or finding a new long-term rental in a more affordable neighborhood. If you have no other option than to find a new home, use online tools like virtual home tours and online videoconferencing. Even though physical home tours are now allowed, you should still try to limit physical contact with others where possible. The good news is that while housing options are now more limited, fewer people are moving. Plenty of landlords across the city are looking for new tenants so that you can get a discounted rate or other benefits.

Also, keep in mind that your move may take longer than usual while moving companies are still working. This is because moving companies still operating have implemented precautionary procedures to protect their workers’ health. Understandably, this makes the process slower, so do what you can to prepare and speed things up.

Final Thoughts

Moving is a pain, but so is falling behind on your rent. If you can’t keep up with your rent or are facing the end of your lease, then take the time to understand all the options open to you. Landlords are taking things on a case-by-case basis and will do what they can to get you through this. However, if your landlord can’t budge on the price or lease terms, then you need to take steps to ensure your health and safety as you look for a new home.