Good tenant lost job....

[Allende Hernandez]

Good afternoon fellow investors.

Let me begin with the disclaimer that my rental unit is located in an area of Miami, FL where the expectations of having a 3 month's rent in a bank account is not realistic for new tenants. These are usually people who live month-to-month. 

This being said, I have family  (mom + 2 kids, one 18+) rented who has always been on time with their rent, has caused no issues other than being a bit needy but good tenants overall. A few days ago she contacted me letting me know that her son has lost his job and that she was concerned about the rent for next month, asking for a discount. I did not offer anything other than to discuss the situation again closer to the end of the month in case her son finds a new job.

What I'm thinking is to offer her a discount for the next 2 months and work out a repayment plan in the following 2 months. In case they can't catch up, I would terminate the lease with no penalties and deduct any owed amount from the security deposit. I believe this should work well for both sides as I can still recoup my rent while giving them an opportunity to get back on their feet.

Thoughts?

[Ghassan Jabali]

Hello Allende,

I hope you're doing well. Your idea could work as it uses the goodwill that the tenants have built up and make them loyal and stay good tenants as you were willing to work with them when they were down on their luck. We strongly recommend that any arrangement needs to be in writing and signed so that it is fully binding and that there are no misunderstandings with regards to expectations and payment plans as you offer this discount.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.