The coronavirus pandemic has put millions of people out of work as businesses have shuttered in compliance with government stay-at-home orders to prevent the spread of the virus.
Many of these workers are facing significant financial hardship. Studies suggest that a significant share of Americans don’t have the funds to cover an emergency such as the loss of employment. While Congress has passed the $2 trillion CARES Act that includes a provision to send millions of Americans stimulus checks up to $1,200, many people won’t receive their government assistance for many weeks.
“ Thousands of renters are suddenly in a position where they don’t have the money to pay rent. Small-scale landlords are facing their own crisis. ”
As a result, thousands of renters across the country are suddenly in a position where they don’t have the money to pay rent. Small-scale landlords, in turn, are facing their own crisis, with many property owners braced for a significant shortfall in rent payments to cover costs like mortgages and taxes.
But it’s not just the unemployed who are struggling to pay for their housing. Many working Americans have seen their income dwindle despite remaining employed during the coronavirus emergency. That’s the case for Rafael Nunez.
Nunez, 30, works as a plumber in New York City. His company specializes in doing plumbing work for custom homes and apartments, including piping installation and finishing work such as connecting decorative fixtures. He also provides emergency services, including finding leaks in pipes and fixing sprinkler systems in nursing homes.
As a plumber, Nunez is considered an essential worker in New York state. But because much of his typical work isn’t necessary at this time, he’s seen a significant reduction in his working hours — and his take-home pay. As a result, Nunez said he and his girlfriend will likely be unable to afford their full rent payment in May.
Many Americans will face greater difficulty paying the rent as workers are laid off because of the coronavirus pandemic.
MarketWatch spoke with Rafael Nunez about how coronavirus has affected his finances:
MW: How has the coronavirus pandemic affected your work?
Nunez: I did work last Friday, then I got the call Sunday from my job site manager telling me, “Look, there’s no work, for now.” This is all the information I got. My boss said, “The government shut down the business. We cannot work through that.” And he left me off — pretty much saying he will let us know we have work again.
I could be home for three weeks. I could be home for four days. I have no idea. I even got a piece of paper in my paycheck saying that we cannot use any vacation hours or any sick hours. That’s really upsetting because Passover is coming up. Usually, I get paid for that with my vacation hours, and now it’s like a whole month without pay again.
“ ‘I could be home for three weeks. I could be home for four days. I have no idea.’ ”
I tried to apply for unemployment earlier this week. When I tried making the account with the government, it was saying, “There’s a problem with the website. Try again later.” So I tried again the next day. And I still couldn’t even make an account with the government. Then the day after that, I got the call to go to work. I’m kind of happy I didn’t apply for unemployment because somehow my company still has work.
MW: Are you considered an essential worker?
Nunez: I am definitely an essential worker. When a leak comes around, that’s essential work. My boss today was only able to let the service crew work. I’m a service mechanic, so I have my own truck and my own help, and we go out doing service calls or finishing work.
I’m assuming he’s picking people who he knows work very well and putting them together to do service calls. All the other job sites where people spend months working on one building sare closed down so we can’t work there.
MW: Before the coronavirus situation began disrupting how much work you were receiving, how were you saving money?
Nunez: Every time I get a paycheck, I just take out a quarter of my rent. I had some money in the bank to pay off the month. I have one little side job tomorrow, but that just still is not enough.
MW: How will this affect your ability to pay rent in April and May? Have you talked to your management company or landlord about your situation?
Nunez: We’re going to pay for this month. That’s what we’re leaning towards right now. But next month is still in the air.
We tried calling [the management company] and we kept getting an operator. Then 10 minutes after we took our credit or debit cards out of automatic payment, we get a call from management saying, “Hey, what’s up with your rent?” We told them. They said, “I understand, but just try and pay what you can and we’ll figure the rest out later.” And that was the end of that.
“ ‘I got the call Sunday from my job site manager telling me, ‘Look, there’s no work, for now.’’ ”
MW: Did your management company say whether you will face late fees if you don’t pay in full in May?
Nunez: They seemed like they were chickens running around with their head cut off.
MW: If May comes around, and the work situation hasn’t improved for you, do you have anywhere else you will turn to for help?
Nunez: I’m already doing side work. I have a couple friends in the same company give me some work. My dad actually called and we spoke about finances a little bit. He said, “Let me know if you need help with money. He knows how much my car insurance costs. He’s still working. He’s a bus driver, and my mom’s working from home for law offices.
It’s a big relief. It actually helps me not think about or stressed out during the middle of day when there’s nothing going on and when there’s absolutely nothing for me to do, or nothing I can do about the situation.
MarketWatch: What do you typically work on as a plumber?
Rafael Nunez: I do a lot of finishing work. My company specializes in custom homes. So a lot of times I’m doing a lot of finishing work putting up new faucets, new bathroom trims for new homes and whatnot. I do a lot of gas work, gas piping, and sprinkler work. I work in a lot of nursing homes. I pretty much do anything besides boilers. That’s the only thing that that’s not my forte.
(This interview was edited for style and space.)
What if, like Rafael Nunez, you worry about paying the rent?
There are some new protections for tenants. In the wake of COVID-19, many cities and states have issued moratoriums on evictions. The CARES Act also temporarily prohibits evictions for certain properties funded by the Department of Housing and Urban Development.
But even if you live in a city where evictions have been put on hold as the coronavirus outbreak continues, that does not mean you can — or should — simply stop paying rent, said Marc Betesh, a former commercial lease lawyer and the founder and CEO of Visual Lease, a provider of lease accounting software. “You have an obligation to pay your rent through the end of the lease term,” Betesh said. “You have all these penalties that kick in.”
Landlords can charge fees for late or non-payment of the rent. Even in cases where a tenant is evicted for not paying their rent, they could still owe the landlord the equivalent of the remaining rent payments, depending on the wording in the lease.
“ Landlords will be in a position, should they choose to do so, to take strict action against you if you don’t have an agreement in place. ”
As a result, Betesh said it’s important to talk openly with your landlord if you’re facing financial difficulties right now because of the COVID-19 outbreak. Many landlords will be sympathetic, he argued. Tenants could request a pause on payments for the time being, and then they could agree to pay off the balance they owe as an additional payment with the normal rent when things return to normal.
Tenants should also read their lease carefully. Their landlord may have protections at a time like this or whether a force majeure clause covers anything. Tenants should also make sure they are receiving all the services they can expect, based on their lease agreement. For instance, if part of their monthly rent goes toward doorman services they are not receiving, they might be able to bargain for a lower monthly payment.
Any agreement between a landlord and tenant should be made in writing and signed by both parties, Betesh said. “Landlords will be in a position, should they choose to do so, to take strict action against you if you don’t have an agreement in place,” Betesh said.