We are facing extraordinary challenges during the COVID-19 pandemic. Unemployment rates are high and a partial or complete loss of income for many Americans is leading people into financial crisis. For those who have had a sudden loss in income this year, you may be worried about meeting your financial obligations, such as housing payments and consumer debt. Being in the thick of the holiday season, when spending is typically at an extreme, does not make the situation any easier. If you are among the many who were financially impacted by the pandemic, developing a crisis budget can help you stay on top of basic expenses. The first line item in that budget needs to be housing. Especially as we move into the freezing temperatures, keeping a roof over your head needs to be the top priority. If you are renting, the thought of eviction might be overwhelming, but the more you understand your own financial situation and the latest guidance on eviction moratoriums, the more likely you will be to maintain a stable housing situation.
Effective September 4, 2020, the Centers for Disease Control and Prevention (CDC) issued an order to temporarily halt certain residential evictions for nonpayment of rent. The order, which is set to expire December 31, 2020, was implemented to prevent the further spread of the coronavirus. To be protected from eviction for nonpayment of rent under the CDC’s order, each adult listed on the lease, rental agreement, or housing contract should complete a sworn declaration and provide it to their landlord.
While the CDC eviction moratorium aims to prevent the spread of COVID-19, state specific moratoriums, like the one in Maryland, are also designed to provide financial relief for those negatively impacted by the pandemic. If you have lost a substantial amount of income due to the pandemic, you currently cannot be evicted for nonpayment of rent. The Maryland order defines “substantial income” in detail. In summary, you would meet this definition if your income was greatly reduced or eliminated due to COVID-19 or the state of emergency. If you own a business, this order also applies to the entity if operations were reduced, needed to close or experienced a loss of employees because of the pandemic.
While these moratoriums do take some weight off your shoulders, you must remember that you are still financially liable for the rent, even if you cannot pay it right now. Whether you are already missing rent payments due to the pandemic, or anticipate facing this situation, you must do everything you can to prevent eviction when these moratoriums are lifted. There are five key things to focus on to prevent rental eviction.
- Maintain control of your finances
If you are worried that you might not be able to pay your rent in the near future, or are already in that position, you need to work hard to understand and control your finances. This means creating a budget, likely a crisis budget which reduces or eliminates as many expenses as possible. When it comes to adjusting your expenses, the most important things to cut out are your ‘wants’ and only leave room for your ‘needs’. List all of your monthly expenses then go through them asking if each one is a ‘need’ or a ‘want’. The trick is to not make excuses for why a ‘want’ is a ‘need’. For example, you may be struggling to make your rent payments but you are still paying for cable and streaming services. You may think television is a ‘need’, especially when you are mostly stuck at home, but this is a ‘want’ and can make a good amount of room in your budget for the true necessities: housing, food, transportation and clothing.
If you are currently employed and meeting your financial obligations but worry that the future might not be as bright, now is the time to start putting as much money as you can into an emergency fund. Building up your savings will help you get through financially challenging times and can prevent rental eviction if you have enough saved to pay rent while you are unemployed.
- Pay rent on time
As often as possible, pay your rent. If you have prepared your budget and do not have enough money to pay 100% of the rent, pay as much as you can. Paying less than the total amount might not feel sufficient but there are benefits to giving the landlord as much as you can afford. First, it allows you to build good faith. A good relationship with your landlord can be an asset to you in times of trouble. Second, the more you pay towards the rent now, the less you will owe when your financial situation turns around. Once your head is above water, you will need to catch up on the payments missed. It will be a lot easier to catch up if you are not behind on 100% of each month’s rent.
- Adhere to all rental terms
It’s important to read and understand the lease provisions before signing a rental agreement so you are familiar with the rules and know what’s expected of you. If you have not read through your lease agreement in a while, now is the time to refresh yourself on the terms. While you are facing a financial crisis, do not violate any other (non-financial) terms of the contract so your landlord does not have any reason to evict you. While there are pandemic related moratoriums for nonpayment of rent, you can still be evicted for other reasons, such as violating a pet policy or exceeding the maximum occupancy of the property. Keep yourself in compliance with all other terms of the rental agreement, even if you fall behind on rent payments.
- Communicate any current or foreseeable issues with your landlord
As mentioned, building a good relationship with your landlord can make things easier in difficult times such as this pandemic. If you already have, or expect to, miss a rent payment, talk to your landlord as soon as possible. Be honest about your situation and assure them you will pay as much as you can each month. Whether your communications with the landlord are amicable or hostile, it is important for you to document key conversations in writing. One way to do this is to follow up your phone calls or in-person meetings with an email summarizing the conversation. This can not only protect you if you face an eviction situation but it can also keep you focused on making the best effort to prevent eviction.
- Get help as soon as financial problems arise or have potential to surface
Consumer credit counseling agencies like CCCSMD are accredited nonprofit organizations that can provide you with free financial counseling before, during and after a crisis. It is very important that you get help from a financial professional, such as our Financial Advocates, as soon as you know a problem may arise. When you contact our Financial Advocates, you will immediately start receiving support to help you through a crisis. CCCSMD provides budget and housing counseling, including the development of a personalize action plan.
The thought of eviction can be terrifying, especially if you have a family to take care of. Being proactive by understanding the eviction laws, moratoriums and ways to prevent eviction can help you feel more secure in your housing situation. The most important thing to remember is that you are not alone in this financial crisis. Many organizations like CCCSMD are waiting to help you when you need it. Call today, (800) 642-2227, to learn more about crisis budgeting and how to improve your overall financial health.