When your tenant loses their income, there is a possibility you’re about to lose yours too. It’s okay to start worrying immediately, the human instinct always sticks to your own survival first. While that’s the human thing to do, it’s not the humane thing. So, what do you do first when you find out your tenant is no longer has a paycheck to rely on?
Step 1: Empathy
Losing a job is a big deal. Many people find it strikes not only at their means to live, but their self-esteem is left shaken, too. Did they make a big mistake? Are they embarrassed? Maybe they were replaced with someone they see as younger, brighter, more energetic. Losing a job can leave one feeling worthless, replaceable, and useless.
The last thing they need to hear is that their landlord is already thinking about replacing them, too.
That doesn’t mean you shouldn’t be concerned about future rental payments but offer them a comforting shoulder first. You may not be friends, but a ‘sorry to hear that’ and a few days’ time before inquiring about how they plan to pay rent can be worth the wait. Odds are they have time left on their lease anyway, and late rental payments won’t be a concern. There is no need to think about eviction at this stage, and pursuing that line of discussion may be unprofessional. You never know, they could have Liam Neeson’s worth of valuable, unique skills that future employers would be utterly Taken with, and they could have a brand-new job lined up inside of a few weeks. Now is just the time to give them breathing room, and nothing more.
Step 2: Communication
The landlord-tenant relationship is one that needs trust. Start to think about this tenant, what you need from them, and what they need to know. What is this tenant like? Timely payments, hygienic, responsible? If they’ve been reliable and respectful for a long time, it may be a good idea to be lenient during that beginning phase of their unemployment. You can expect their first paycheck to be a bit late as they try to get unemployment and their emotions in order.
Being lenient doesn’t mean being charitable – this is a business you’re taking care of – but, you also don’t want them to leave bad reviews about your property or you as a landlord. This is a rough patch in their life and doing something as simple as waiving your tenant’s late fees during this transitional period can keep your relationship intact.
When the time comes, have a plan on what you want to say, and what they have figured out. This all depends on your specific relationship with your tenant. It’s wise to have a standardized process here, for both parties. You can have it written down what to do and when, and your tenant doesn’t feel like an oddball out. They aren’t some stand out person making this awkward, you have an organized, careful process that they are playing a part in. Have a process, such as two missed rent payments, depending on your local eviction laws, issue your pay or quit eviction notice, and make sure to follow up.
It is not your job to give them a place to live for free. It’s your job to be a landlord, and that is predicated on their ability to pay for where they live.
Step 3: Honesty
When you talk to them, you won’t do any favors by lying out of need to be polite. Yes, you want to be empathetic, but being honest is what your tenant needs to hear. But what may be best for your tenant is for them to move out and move in with a friend or family member to reduce their cost of living while they look for a job. Be firm but fair – if they were a good tenant, say so. Thank them for being a good tenant, but also be firm and a fair.
Let them know what you expect – they can’t live on your property for free. You are sorry about what happened, but there is a contract in play. If you want to give them some leniency, that’s up to you. This is what rental insurance is for, after all, and they’ll appreciate your flexibility, and be a good tenant for it.
If they miss a rental payment, that’s when you can provide notice.
Your tenant has two options after missing that payment. They can leave on their own, or you can file the eviction. Once they’ve infringed their contract, that’s when you can take this step. Have a follow up conversation to make sure they understand and mark down that you have discussed this both in writing and in conversation, as that is always good in a court proceeding.
Be empathetic, patient, and honest. If everyone is open and honest, you may be able to work out a plan that works for everyone, especially if they have been a good, long term tenant.
Have you ever dealt with a tenant who has lost their job? What worked for you? Let us know in the comments section!
