As the world continues to grapple with the ongoing global pandemic, many individuals and small businesses are struggling to make ends meet. One of the many challenges that people are facing during this unprecedented time is being unable to pay rent. Fortunately, leasing companies are offering a solution to help alleviate the burden for tenants: lease payment deferral agreements.
What is a lease payment deferral agreement?
A lease payment deferral agreement is an agreement between a tenant and leasing company that allows the tenant to defer a predetermined amount of rent for a specified period. The deferred rent is typically added to future rent payments, divided over a set number of months, to make it easier for the tenant to catch up on the missed payments.
This agreement is an alternative to eviction and is becoming increasingly popular as the pandemic continues to impact people’s financial situations. The goal of this agreement is to help tenants avoid falling behind on payments, ultimately reducing the risk of eviction.
How does the agreement work?
The leasing company will typically offer the tenant the option to defer a certain number of payments, usually up to three months. During the deferral period, the tenant is not required to pay rent, although the lease is still in effect. Once the deferral period ends, the tenant will be required to begin making payments again, with the deferred rent payments being added to future monthly payments.
It’s important to note that deferred rent payments still accrue interest, which means that the overall amount owed may be more than the original rent payment. However, this interest is typically much lower than the interest rates that credit card companies and other lenders charge.
Who is eligible for a lease payment deferral agreement?
Not all tenants are eligible for a lease payment deferral agreement. Eligibility is typically determined on a case-by-case basis and will depend on a variety of factors, such as the tenant’s financial situation, the leasing company’s policies, and the terms of the lease.
It’s important for tenants to communicate with their leasing company as soon as possible if they are having difficulty making rent payments. The earlier they can begin discussing potential solutions, the more likely they are to work out a payment plan that works for both parties.
A lease payment deferral agreement is a useful solution for tenants struggling to make rent payments during the pandemic. By deferring a predetermined amount of rent for a set period, tenants can avoid falling behind on payments and reduce the risk of eviction.
This agreement is not a permanent solution, and tenants are still responsible for making payments in the future, including interest charges. However, it’s an effective way for tenants to catch up on missed payments and avoid eviction, while leasing companies can still receive the money they are owed.