Tenants and landlords should be able to negotiate

Q: I rent an apartment with two other guys. One of the guys lost his job and can no longer pay rent. He would like to stay in the apartment but told us he will move out if we wish. We don't really want him to leave but me and my other roommate really need his one-third share.

We talked to our landlord who basically told us he isn't concerned about our problems and we need to pay the full monthly rent. We scraped May rent together between the two of us but that's going to be it as we will not be able to pay June rent without our bailing roommate's share. I know there are a bunch of new rules regarding rentals. Anything out there that will help us?

A: Most leases contain provisions that make all tenants jointly liable for the full rent regardless of each individual tenant's contributions. On the plus side (for you anyway) is that the landlord will not be able to proceed with an eviction in the near future per the current executive order. This does not erase your joint obligation, it just prevents the landlord from proceeding against you at this time.

At some point, things will get back to normal and the landlord will then be able to pursue collecting any unpaid rent as well as obtaining possession of the property.

Do you have other living options? If so, one option would be to approach the landlord and indicate you and your paying roommate will stay and attempt to find a third paying roommate in exchange for the landlord forgiving the remaining one-third for a period of time, say two months. In the event the landlord will not agree, tell him/her you will move out by the end of May. Given the current state of affairs, the landlord may decide two-thirds of the rent for the next two months is better than no rent.

Of course, you also have the option of moving out without discussing this option with the landlord. Given the number of tenants unable to pay rent these days, you and your paying roommate should have little trouble finding a place you can afford. On the negative side, the three of you are technically responsible for the remaining months under the lease though the landlord would have a duty to make a good-faith effort to lease the property.

Be advised that if you elect to stay and continue to pay two-thirds of the rent, the remaining one-third becomes an obligation that will grow each month. Once the court system opens up, it is likely the landlord will sue you for unpaid rent plus possession of the property. Most leases also include a provision whereby you would be responsible for the landlord's attorneys fees and court costs in filing the case against you.

Your best option, in my opinion, would be to attempt to work something out with the landlord. I would think most landlord's would recognize they are also in a tough spot and would work with you to find a resolution you all can live with.

Q: I know you have discussed 1031 exchanges in the past. I have a question. I sold a house I was renting and was attempting to do a 1031 exchange. I identified two replacement properties within the 45 days. I am now past the 45 days and have just discovered both these properties have been either sold or are under contract. Do I have any other options to complete the exchange?

A: I am not aware of any provision in the code that allows you to identify another property after the initial 45-day period. What would generally occur here is that once the 180-day period to close on the replacement property runs, the intermediary will turn over the sales proceeds to you. Of course, you will then be responsible for any applicable capital gains tax.

Perhaps you could approach the parties that purchased your replacement properties and see if one of them would sell to you for a quick profit.

Update: It has been pointed out to me by an employee of a local company that acts as a 1031 exchange intermediary, that pursuant to Notice 2020-23 (Additional Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic), that in the event the 45-day identification period ended between April 1 and July 14, 2020, the identification period is extended to July 15, 2020. This would give this exchanger additional time to identify a new property and could save his exchange so long as he was able to close within 180 days from the date he or she sold the exchanged property.

• Send your questions to attorney Tom Resnick, 910 E. Oak St., Lake in the Hills, IL 60156, by email to tom@thomasresnicklaw.com or call (847) 359-8983.