My Tenant Lost Their Job

People lose their jobs. They can get laid off or fired. Companies can go bankrupt. There are a host of other reasons why someone might loose their job but a sudden job loss obviously means a loss of income. If the person has no or very few cash reserves things can get dicey for them pretty quick. They may be making decisions between food, utilities, gas and rent.

If you are a landlord for any length of time, eventually one of your tenants will loose their job. What happens then? Some tenants will be up front with you and tell you early on and work with you. Others will put their heads in the sand and hope things quietly blow over.

So what should you as a landlord do then you get the call saying “I’ve lost my job and can’t pay my rent.” from one of your tenants? Should you move to evict right away?

Perhaps there is a better way

Be kind and understanding – This is especially true if they have been a good paying tenant. They are probably embarrassed about being in this situation. Don’t pile more on top of them. However….
Counsel Them – Ask if they think they will be getting a new job soon. Ask if they can get help from family and friends. Be gentle but direct. Ask them how they think they will be able to pay the rent.
Be Firm But Fair – Help them understand that you have bills to pay as well and that they cannot stay if the cannot pay. You can certainly work with them by giving them some time or perhaps a discount. How much and how long is up to you and your tenant/landlord relationship. But you also should…..
Encourage Definitive Action – Ask them to set a specific date for getting a new job or acquiring the money to pay you. How far out this date should be or how much time you want to allow is again up to you. If that date comes with out any payment, then…..
Encourage Them To Move – Do this as quickly as possible. Your goal now is to get possession of your rental unit back asap so you can get income flowing again. Encourage your tenant to move in with parents, friends, whatever. Again be firm. Make the point again that they cannot stay.
Set A Date For Them To Move Out – If after a reasonable amount of time (that you have decided upon) there does not appear to be any prospect of getting paid set a firm date with your tenant for them to be out of the premises without any legal action. Yes, you might have to use the stick of legal action to get someone motivated. Explain that you do not want to pile an eviction on top of their already large load of problems. But you will. You can also use a carrot. Tell them they can get their security deposit back if the unit is clean and undamaged and that you will let them out of their lease.

If All Else Fails, Evict – Rarely have we had to go this far, but we have had to use the threat. Most people realize that they can’t stay and will move on.

Losing a job sucks. While we landlords can and perhaps should be understanding and even sympathetic, we are also running a business. That however does not mean that we cannot work with our tenants to find the best possible solution for everyone.
Photo Credit: philcampbell

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.