Throughout the past several years, employees have wrestled with a wild housing market. In 2020 and 2021, mortgage interest rates hit historic lows, then began rising until they hit a recent high in October 2023. Interest rates have hovered at even higher rates since then – and home prices are poised to spike 7% in 2024. This has the potential to cost employees hundreds, if not thousands, on their monthly mortgage rates. So when these conditions collided, it’s easy to see why more and more individuals are choosing to rent, rather than buy a home. In fact, recent research shows that 35% of American households rent versus own their homes.
But there’s another force at play in the housing market: the emergence of accidental landlords. People can end up as an accidental landlord for a number of reasons. Maybe they inherited property from a relative and chose not to live in it. Maybe they try to list their home for sale, but interest rates are too high for it to sell. Or maybe they realized they could buy a second home and rent their first home for a higher price than their mortgage payment.
This means that employees are now renting from landlords who have the potential to be underprepared for the work it entails. They could be inexperienced in managing household repairs, not know how to draft a proper lease agreement or not have enough time to properly deal with the day-to-day issues that arise.
Employees are already distracted while at work, and adding on the stress of a landlord disagreement can lead to major disruptions during their day. Instead of focusing on their projects at work, they’re thinking about their leaky faucet or unfair rent increase. This is taking time and focus away from many things that matter most to them, like their family, happiness and career.
So as you’re reviewing your benefits offering for the year ahead, consider a legal insurance plan from ARAG. It can help give employees a resource to learn about how to deal with unhelpful, inexperienced landlords. A network attorney can review lease agreements, write demand letters and more.
If you’re interested in learning more about a legal insurance plan from ARAG, contact us today.
