Negotiating mortgage or rent deferrals to keep afloat through the crisis? Aim for the win-win solution

If you’re in a financial pinch, you need to know how to negotiate effectively.

The aim of a good negotiation is to get more of what you, and the opposing party, want — a win-win. If the negotiation is ineffective, the solutions can be one-sided, or result in a much worse situation for everyone.

For example, if a lender isn’t willing to budge on collecting a payment from someone who can’t pay, they’ll probably get nothing. The borrower loses, too, because their credit score is negatively impacted. If the parties negotiate effectively, however, the lender gets paid something versus nothing, and the borrower keeps their credit rating and relationship with the lender intact.

If we remove master manipulation tactics from the equation, and nuances around who offers the first compromise, most effective negotiations follow a similar format.

Fully research the problem at hand (pertinent laws, trends and relevant media). Begin the dialogue with an exploratory phone call to better understand what each party needs (email can be used afterwards to document the phone call). Establish that compromises/adjustments need to be made by each side. Brainstorm creative solutions that benefit both parties. Choose the solution that gives the greatest win-win.

As a best practice, keep the lines of communication open until the solution is reached, which can span over multiple conversations. Here are some common areas you may need to negotiate right now.

With your lenders

The banking industry has been asked by the Canadian government to work with borrowers who have been impacted by COVID-19 to offer payment deferrals, interest relief and/or reduced payments. Currently there isn’t a one-size-fits-all solution for hard-hit Canadians. Lenders have asked individuals and small businesses to contact them to negotiate case-by-case solutions. If you’re unable to make payments in full because you’ve lost your income, create a list of your lenders and start making phone calls. Your mission is to negotiate payment relief for a set period of time, with the option to try to re-evaluate down the road.

Rent owed to landlords

When this crisis subsidies, it will be very important for landlords and tenants to have functioning working relationships. All provinces have prohibited evictions until the pandemic is over, but rent still must be paid. If you can’t pay rent, explain your financial situation to your landlord and negotiate an agreement on rent (a delay or a reduced amount, or even an exchange of services). Paying less rent for a month or two with the intention of making up for it later in the year could help you make ends meet right now, while keeping your landlord whole.

Keeping your job

If you still have a job but your employer is clearly not doing well, you may need to get creative to keep your job versus experiencing a layoff. Talk to your organization about worksharing, cost-cutting opportunities, the new emergency wage-subsidy programs and more. The goal here would be to see how you can negotiate to keep your job. If you find yourself out of work you may need to access the federal benefits (Employment Insurance and the Canada Emergency Response Benefit) or benefits offered by your province.

Let’s say you are on commission or own a small business, chances are your clients are struggling with the financial implications of the pandemic. Negotiate with them about what services they should be pausing or completely stopping. Talk to them about their needs. Perhaps they need new solutions with all that has changed. Your aim should be to keep these relationships healthy during the crisis, and get prepared to capture revenue opportunities during the pandemic’s recovery period.

My money mentor told me early in my career that the sign of a good negotiation is when each side walks away satisfied, but a little uncomfortable because neither side got everything they wanted. As you’re applying your negotiation skills in these key financial areas right now, try to get to that win-win solution, even if it means not getting everything you want.