A rent forgiveness lease amendment updates the tenant’s obligations to pay rent, declaring they don’t have to pay rent for a certain period. A landlord modifies a lease with this amendment to help a tenant experiencing a sudden loss of income or another financial hardship. It absolves the tenant of liability, meaning they can forgo their rent-paying responsibilities under agreed-upon conditions.
The forgiveness period helps the tenant search for employment or rectify their financial situation so they can hopefully resume their rent payments once the forgiveness period ends.
Types of Rent Forgiveness
Here are some of the types of rent forgiveness that a lease amendment may specify:
- Rent Reduction: Rent reduction is the most straightforward type of rent forgiveness. Depending on the circumstances, the landlord can partially reduce or fully forgive the rent. They may offer rent forgiveness for the rent or certain fees, such as common area maintenance (CAM), trash collection, utilities, or other costs. When a landlord offers rent forgiveness, they don’t expect to receive anything back.
- Rent Abatement: Rent abatement involves temporarily suspending rent payments because the property is uninhabitable or otherwise unpleasant to live at. For example, the landlord may temporarily halt a tenant’s obligation to pay rent when the property sustains damage due to major water leaks, a fire, or a natural disaster. Furthermore, rent abatement may apply during construction or major renovations that dispute a tenant’s living conditions.
- Rent Deferral: Rent deferral occurs when a landlord forgives rent payments for a specific period but expects the tenant to eventually repay them. The tenant can pay deferred rent in larger future rent payments or a lump sum.
Receiving Emergency Rental Assistance Payments
If you’re a landlord renting to a tenant in a poor financial situation, you may receive rent payments from a Distributing Entity. Distributing Entities send payments on tenants’ behalf through the US Department of the Treasury’s Emergency Rental Assistance (ERA) program.
This program has helped and continues to help low-income renters stay in their homes throughout the COVID-19 pandemic. Please note that any payments you receive from a Distributing Entity through the ERA program count toward your gross income for the year.
Rent Forgiveness Lease Amendment Sample
Download a rent forgiveness lease amendment template below as a PDF or Word file:
