As a renter, you have a huge disadvantage when dealing with landlords, especially if your landlord is a big corporation. I’m going to tell you a story about Jake, who thought he was making a good decision in leaving his apartment when his landlord threatened eviction, but it ended up costing him more.
Jake’s Story
Jake fell behind on his rent during the Covid-19 pandemic, and his landlord threatened to evict him. Jake just couldn’t come up with the money, so he continued to stay in the apartment, hopeful that things would change. Finally the landlord filed an eviction lawsuit against Jake. After some internet research, Jake determined that due to the eviction moratorium, he could delay the lawsuit. Jake filed the required paperwork and the court put the eviction proceedings on hold. This bought Jake some time to find a new place to live, and he promptly moved out.
Jake fully expected that this solved his problems. He was out of the old apartment, and living in a better situation. The landlord couldn’t evict him – he was already gone. But the landlord hadn’t forgotten about the lawsuit. Because not only did the landlord want Jake gone, they also wanted Jake to pay past due rent. Jake hadn’t paid all his past due rent before he moved out. And Jake had a rental agreement with a term of one year, and he hadn’t finished the full term before he moved. The landlord wanted Jake to pay not only for his past due rent, but they also wanted him to pay for the rest of the year even though he wouldn’t be living in the apartment.
Jake mistakenly thought that if he moved out, he could just pay rent at his new place and forget about everything that had happened. That was his big mistake. And that big mistake ended up costing him thousands of dollars. After Jake left, and after the eviction moratorium expired, the landlord moved forward with the case. Jake didn’t leave a forwarding address with his old landlord and didn’t file anything with the court informing the judge and the landlord of his new address. So every court document from that point forward was sent to Jake’s old apartment. Even the landlord kept sending its filings to Jake’s old apartment, even though they knew that Jake didn’t live there anymore. But because that was Jake’s last-known address, the court wouldn’t make the landlord do anything different.
Ultimately, the landlord obtained a judgment against Jake. That judgment included all past due rent, as well as all the rent for the rest of the year until the end of the rental agreement. Fortunately, Jake’s rental agreement didn’t include an attorney fees provision. If it had, the court would have likely also ordered Jake to pay the landlord’s attorney fees in obtaining the judgment – a cost that could have been thousands of additional dollars.
The worst part is that Jake was paying rent at his new apartment. Which means he ended up paying double rent for months. The big takeaway is that Jake would have been better off staying at his old apartment and paying his rent as much as he could. And he should have stayed at his old apartment until he was paid in full, he settled the matter with the landlord, or the court ordered him to vacate the premises.
So What Should You Do?
If you are a renter, what should you do in circumstances like this? To prevent a situation like this, we need to go back to the beginning. An eviction lawsuit is really a lawsuit for breach of contract. A contract is an agreement between two parties, and a rental agreement is a written contract. Your rental agreement will outline exactly what you can and can’t do, and it will also outline what your landlord can and can’t do. At its very basic level, a rental agreement is a contract that requires the renter to pay rent and the landlord to provide an apartment.
The problem with rental agreements is that landlords have all the power. They will give you their basic form rental agreement which was drafted by a team of expensive lawyers and which was designed to protect the landlord. Nothing would prohibit you from taking the rental agreement and proposing revisions, but it is unlikely the landlord would agree to any changes, as they could easily find another renter who won’t change the terms of the agreement. What you as a renter need to do is consider the review of the rental agreement as an important part of your decision where to live as the location and appearance of the apartment. It might seem like boring legalese, but take time to read the agreement carefully and note specifically how you can get out of the agreement. The specific words you will look for might be something like “Term” or “Termination.” If the term of the agreement is one year, you need to understand that you are likely locked in to paying for one year’s worth of rent, even if you move out early. The termination provision will tell you the ways you can get out earlier than a year. It will also tell you the steps you need to take to get out of the agreement even if you go beyond the initial one year term.
Of course, none of that helps you if you’ve already signed the agreement and want to leave. If a landlord is threatening eviction and you want to leave, you need to conduct an analysis of the cost of leaving. You should recognize that leaving does not stop the landlord from suing you for past due rent. In fact, you should count on them suing you for past due rent. And you should expect that they will also ask the court to include in a judgment the amount of rent that you would have paid had you stayed until the end of the term of the agreement. If you are going to pay this amount anyway, then why would you be in such a hurry to leave and pay additional rent at a new place? No one wants to go through an eviction, but waiting until the last possible moment to leave could end up saving you serious money.
There is no one size fits all approach to deciding how and when to leave when you fall behind on rent. But what everyone should do is sit down and review the rental agreement. Then ask yourself these questions: When can you get out? How can you get out? What penalties do you have to pay? How much back rent do you owe? How much rent will you owe for the rest of the term? What rent will you have to pay at a new apartment? After honestly answering these questions, you can make an informed decision as to whether to try and stay at the apartment during eviction proceedings, pay as much back rent as you can, negotiate with your landlord, or leave now.
Negotiating with your landlord probably deserves its own blog post, and we’ll go more in depth on that topic in the future, but for now, you should realize that negotiation is always an option. It may seem like your landlord will go to the ends of the earth to chase down all the rent you owe, but in reality, they may not actually want to make that effort. The landlord may not want to find a new renter, or may feel merciful toward you if you attempt to work things out. Or it may be more cost-efficient for the landlord to negotiate the matter with you rather than expend time and effort in court.
So how do you negotiate with your landlord? Start by making a proposal for how you can pay something. You can propose a payment plan. Or you can request to waive past due back rent with a commitment to pay all rent moving forward. Or you could propose that you will pay rent on time moving forward, and each month pay a little toward back rent. Or you could offer to pay a lump sum less than what you owe and offer to move out now. The possibilities are limited only by your creativity. The landlord doesn’t have to accept your offer. In fact, the landlord probably won’t accept your first offer. But it will be a starting point for your negotiations. The landlord may offer something different in response. If that works for you, great! If not, you make a counter-offer and so on. Negotiation isn’t guaranteed to work, but many landlords and tenants who try and negotiate reach deals that work for both sides.
If you have had success negotiating your eviction, or if you have any questions, we’d love to hear from you. Send us an email at contact@debtbrief.com or leave a comment below. And if you’d like to learn more about strategies on dealing with debt, particularly when it comes to dealing with debt in court, you can sign up here for our free email newsletter.
