As the government gets back to work after the longest shutdown in history, there are still lasting effects for a large population within the United States. One of these subsets of U.S. residents are furloughed employees who are now facing housing difficulties due to not receiving their anticipated paychecks over the 35 days of the shutdown. This is now becoming apparent as these employees are starting to show up in response to their landlords filing Failure to Pay Rent notices. It may be reasonable to think that those affected can dip into savings or other funds to cover their rent, but as a recent study has shown, 80% of Americans are currently living paycheck to paycheck. With this said, over a month without a primary income source, these tenants are now finding it difficult to cover rent.
Such a situation leaves both the landlord and the tenant in a difficult and moral predicament. Several housing associations, such as Baltimore County, have urged landlords to work with affordable housing residents until payments are processed, but no such guidance has been given for furloughed employees. As such, we have seen where some property management companies have chosen to work with tenants on payment plans if made aware of such hardship. These types of payment plans usually spread the past due rent through March, by which time backpay is expected to be distributed by the government. Inversely, we have seen landlords and management companies follow their monthly late rent process as if it were any other month. This could also be attributed to poor communication from tenants not making their landlord aware of the situation prior to court.
Court cases are starting to occur for past-due rent from January. Just last week in Maryland, our court representation team saw two court appearances in which both cases had the tenant appear and contest the case. These tenants both showed proof of furlough and had their cases dismissed outright. In a separate instance, as reported on a recent NPR broadcast, two cases of this nature were on the docket in Washington, D.C. These tenants were interviewed after their cases were heard. In one case, the judge granted judgement for the landlord. While in the other, the two representing attorneys worked out a payment plan agreement prior to appearing before the judge. As shown by this small sample, the proceedings for furloughed employees who failed to pay rent can be a mixed bag and could vary greatly from jurisdiction to jurisdiction or from judge to judge. As more of these cases come to fruition in February, we will keep this article updated with our findings.