What if I can't pay rent




June 23, 2022

What if I can't pay rent

Q: My rent just went up 40%- an amount I can't afford. What would happen if I defaulted on my rent payments? What should I do if I face eviction? 

By the end of January 2022, the renter eviction ban will have ended in nearly all states. Not to mention that the Supreme Court ended the federal eviction moratorium back in July of 2021. That means renters no longer have protection against eviction. 

Many renters have just faced a grim reality. Their rent is increasing to an unaffordable amount. This doesn't come as a surprise when we look at rent increases in 2021. The asking rent rates for new move-ins went up 13.9% alone. But, it's not stopping there. Rent prices are due to increase another 7.1% throughout 2022. 

Now that it's a new year, renters are starting to get rent increase notices. Turns out, some rent prices are increasing upwards of 40% in just one go. 

CNBC interviewed a pilates teacher that said open apartments in her buildings were $400 more expensive than her current rent. She suspected that her rent could increase to over $2,300 once her lease was up. 

These steep rent increases aren't a standalone case. Landlords are trying to recover from the losses of the Covid-19 pandemic. Yet, even pre-pandemic, almost 50% of renters were already cost-burdened.

So, what happens when rent increases even further

A nationwide housing crisis. Many people don't know what they're going to do now that they can't afford the rent. It's not only that. Problems are coming from all corners of the housing market. It's a supply and demand issue.

Homes have become costly across the US since there are more buyers than sellers. In 2021, the price of homes increased by almost 20%. As those become too expensive to afford, people turn to rent. 

As a matter of fact, rental occupancy rates are at an all-time high of 97.5%. The demand for rental units is astronomical. Yet, there are few apartments available.

So, why are we saying all of this? Through these facts, we can see why landlords are overpricing the rent. It's because they can. The rental market has a limited amount of units, and landlords can capitalize on that. 

As for the next question...

How can landlords increase my rent by this much? 

Unfortunately, the US has very few rent control laws in place. Nearly all American states ban rent control policies. You can find out if your municipality regulates rent control here. 

Since there's no control over rent increases, landlords can raise the rent to any price

What happens if I stop paying rent because I can't afford it? 

The reality is that you'll probably face eviction charges. Eviction bans have now been lifted in the US. So, nothing is stopping your landlord from evicting you. 

If you default on rent payments, chances are your landlord will hassle you for a few weeks. After some time, they will most likely proceed with legal action. They can take you to court to get you legally evicted. They can also sue you for unpaid rent. 

Most eviction cases are backlogged right now- due to their high volume. As such, renters have some time to find new living arrangements if they're in the process of getting evicted. 

Just note that a renter can't be forced to move out of their home unless a court order for eviction is presented. Even with an order, your landlord still can't remove you. Only a sheriff can. 

Additionally, you should watch out for illegal evictions. A landlord cannot turn off utilities, touch your personal items, or change the locks to get you to vacate. 

With that being said, we never recommend taking this route. Rent approvals are hard enough to get as it is. An eviction and poor rental history will only squash your chances of renting in the future. 

So, how do tenants deal with high rent increases?

There are a few options you can take if your rent is too high. Let's start with some basic ones. 

Negotiate with your landlord

You should always try to talk down an increase with your landlord. What's the worst that can happen? You might as well try. Negotiate the price with your landlord. 

If they're stuck on that price, you can try negotiating a payment plan.   

Apply for rental assistance

Even though eviction moratoriums ended, rental assistance is still running through 2022. 

Here's a pointer. Landlords cannot legally evict you if you have applied for rental assistance. 

You can find over 492 assistance programs throughout the US. They're listed on the National Low Income Housing Coalition's rental assistance page. 

You can also try dialing 211 or 311. Depending on your state, this will prompt a list of rent relief aid programs currently open.

Many programs will give priority to tenants who are facing eviction. Even if you're not getting evicted, you can still apply if you're financially burdened. 

Move out of your current unit

It's painful to say, but sometimes, the only choice you have is to find another home. 

You should browse the rental market to see if there's cheaper rent elsewhere. You can look into affordable housing options, as well. 

Moving into a different neighborhood can also make all the difference. You'd be surprised to see how much rent prices fluctuate depending on your location. 

Always keep in mind that urban cores are more expensive than residential areas. If you don't mind a quieter neighborhood or longer commute, this could be a good option. 

Use a rent cash back program 

There are services out there that give you cash back on rent. Lighthouse is one of them. When you sign a new lease, you'll get a cash back return on your rent. 

You can sign up for the monthly cash back option or receive a lump sum. Regardless, it's a great option to offset the high costs of rent. It's extra money in your pockets. Visit Lighthouse here to check them out! 

What should I do if I'm already facing eviction? 

First of all, don't panic. If a lawsuit hasn't been filed, you still have a chance to get out of your situation. You should sit down with your landlord and discuss your options. Many landlords will be open to getting you on a repayment plan. 

Work together to figure out what repayment schedule would work for both of you. That way, you might even get to stay in your home. 

If both you and your landlord reach an agreement, make sure to get it in writing. A verbal agreement is no agreement at all. 

Some people won't be able to solve their issues this way. In that case, it would be best to look for cheaper housing. You can protect your credit score and rental history this way. 

What should I do if my landlord has filed an eviction lawsuit against me? 

You should start by hiring legal assistance. Many legal aids work pro bono if you can't afford to hire a lawyer. If you need help, the American Bar Association also offers free legal help. 

Once the eviction suit is filed, look into filing your reply as to why an eviction isn't appropriate. In your answer, you can also offer solutions to mitigate the issue. You can do this by detailing a repayment plan. You can also explain that you're applying for rental assistance. 

Don't forget. Research, research, and do more research. Be aware of your responsibilities and learn your rights as a tenant. 

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