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Housing Contract Terms to Consider During COVID-19

July 24, 2020 by Mark Mellor

The COVID-19 pandemic has led to an unprecedented time of uncertainty, especially in terms of housing contracts. Unemployment rates have sky-rocketed, universities are moving their classes online and encouraging students to learn from home, and housing contracts are in the spotlight unlike ever before. In some states, including California, a moratorium on evictions has been implemented. This is in effect until 90 days after the declared state of emergency has been lifted so that tenants can have a chance to recover enough to pay their rent.

Consider the following suggestions to help you navigate these uncertain times.

1. Find A Tenant To Replace You

If your contact allows it, it is usually quite simple to find a replacement tenant in California due to the typically high demand for rental units. However, the COVID-19 pandemic brought demand and supply in the rental housing market to a halt, ultimately leading to a market freeze.

Although finding a replacement tenant would have been a much easier option under normal circumstances, it is still something to consider. You can post your sale on different real estate websites, or even Facebook in order to find potential buyers. Interest may be low, so consider reducing the rental price by a few hundred dollars. If you are able to find a tenant to replace you, it is less likely that your landlord will attempt to recover damages from you, even if the replacement tenant is paying a little less than you.

2. Go Over Your Contract

Familiarize yourself with the terms and conditions of the “Termination of Contract.” The Force Majeure law, enacted in California in the 1870s, allows for contractual provisions in the case of “acts of God,” meaning that in the event of situations such as natural disasters, a person will be exempt from fulfilling certain obligations of a contract since they are unable to do so, due to “an irresistible, superhuman cause.”

Unfortunately, force majeure clauses have never taken pandemics into account. But since the current pandemic, a “COVID rider” clause is being added to more and more contracts. Considering the current climate, the legal implications of contract termination are more complex and will likely require you to seek professional guidance. It would be helpful to get in touch with a local contract dispute attorney to help mitigate any conflicts that may arise from tenant-landlord disagreements concerning the contract.

3. Try To Work Out A Deal With Your Landlord

Negotiate with your landlord, and try to agree on an exit deal. It is unlikely that your landlord will agree to a tenant-friendly deal, so this is probably an option to consider after all else fails.

4. Consider Constructive Eviction

This decision has serious legal implications and is something you must think hard about before pursuing it. Constructive eviction comes into effect when a rental unit is rendered uninhabitable either by a landlord’s actions or their failure to provide something that they are legally obligated to provide. California is one of the states that have been hit the hardest by the COVID-19 pandemic, with the second highest number of confirmed cases as of July 2020. Millions of California residents are at risk of contracting the virus.

As part of their duties, California landlords are obligated to take steps to protect their tenants from COVID-19. Some of these steps include enforcing shelter-in-place orders, providing PPEs for property managers, and other staff of the rental unit, and restricting the entry of non-residents onto the property. You may be justified as a tenant to vacate your rental unit due to constructive eviction if your landlord refuses, or fails to fulfill these and similar obligations, even after you have filed complaints.

5. Prepare To Demonstrate Your Need For A Rent Concession

You will need to gather documents such as bank statements, prior financial statements, balance sheets, and other supporting documents to show that you are genuinely in need of a rent concession. It is also important to make an effort to explore disaster relief programs. It is also vital to seek financial assistance from programs such as the CARES act Paycheck Protection Program, the Economic Injury Disaster Loan and other relief grants being made available by companies such as Amazon, Facebook, and the James Beard Foundation.

Be sure to exhaust all your options for financial support, including insurance claims. With evidence that you have actively worked to fulfill your end of the rent bargain, you will improve your chances of reaching mutually agreeable terms with your landlord.

With the evolving state of affairs concerning the pandemic, new State regulations are being enacted in order to help keep the public safe. It is important to explore all your options, both as a tenant and a landlord, to ensure that you adhere to these regulations while abiding by your rental contract terms.

Filed Under: Landlord Tenant Law News, Real Estate Education, Real Estate Law News

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