Student Renters, Landlords in Limbo

by Chris on June 22, 2020

With the announcement that many universities across the country are planning to hold classes online for fall semester, students and landlords alike are left to sort out what that means for the student housing market.

To complicate matters, some schools are planning to hold a handful of classes with limited attendees under strict guidelines. That makes it harder for students to decide whether it makes sense to return to their college-town rentals rather than remain with family, save some money, and stick with online courses. The chaos has some students mulling whether to take a semester off.

All this leaves landlords and renters in a state of limbo, as students question whether they still are liable for lease payments, or whether the property will be available when they come back in the spring. Others left their belongings behind when they sheltered from the pandemic at family homes. Most had roommates, and not everyone is planning to return.

It is a legal quandary as to whether students or landlords can terminate tenancy agreements due to the pandemic and resulting emergency orders. There is an argument to be made that such an event allows either party to end the lease by claiming impossibility, frustration of purpose, or force majeure.

There are many factors that go into that determination, such as whether it is impossible versus less appealing for the student to remain on the lease and whether the tenancy agreement contemplates such events. Unfortunately, with an anticipated glut of cases over the summer, it may be awhile before these questions can be answered through dispute resolution.

Typically, student housing is a lucrative niche market, given that most students rent with roommates, each of whom are willing to pay a premium for proximity to classes and activities. And, aside from this seemingly temporary glitch, it likely will be again, so switching to long-term rentals may be premature.

Subletting is an option, but logistically impractical if the student is out of town and cannot meet with prospective renters during the pandemic. The landlord may not be able to find a replacement if the tenant’s possessions are still in the property, or if the student is pushing to return next semester.

The best bet may be to work with tenants on an individual basis, encouraging those who want to keep their housing to continue to pay rent but allowing those who can’t return the opportunity to terminate the lease and allow the landlord to find a replacement tenant.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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