The News: A Page from the Car Companies

In what is surely a sign of our troubled economic times, Western National Property Management has announced a new benefit for renters: its Layoff Protection Program. Under the plan, which began on March 11, renters of Western National units can cancel their rental contracts without penalty if they lose their jobs.Thomas Shelton, president of the firm, likened the plan to Hyundai Motor America’s program, announced in January, which permits new-car buyers to return vehicles within a year of the purchase date if the buyers lose their jobs.Western National, which manages more than 22,000 units across more than 140 communities in Southern California and San Jose, hopes the program will serve as a market differentiator. Signing a new lease is a major financial commitment, and now that consumer confidence is at low tide, Shelton said, the program could make that decision easier. The program is also available to those renewing their leases.He is satisfied with Western National’s overall occupancy rate of 93 percent, but leasing velocity—new leases, as well as lease renewals—is off about 5 percent year over year.The program does have conditions. For example, the laid-off tenant must be the unit’s primary breadwinner and must provide proof that the job loss was a layoff, not a firing. In addition, the tenant must give 30 days notice before vacating.A tenant who lost a job and fell behind on rent would normally face an eviction process and be liable for the balance of the rent for the remainder of the lease term. But Shelton noted that landlords’ prospects of recouping that money are typically “not high” anyway. Under the Layoff Protection Program, Western National will not report the broken lease to credit reporting agencies. “Tenants who loses their jobs turn the keys in,” he said. “(This plan) gives them some piece of mind.”