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IRVINE, CA-Western National Property Management has launched a program that allows renters who lose their jobs to cancel their leases without penalties. Tom Shelton, president of Western National, tells GlobeSt.com that the Irvine-based firm believes this is the first such formal program to be implemented by any rental management company on the West Coast, although he has heard of it being done in the East.

The program, which Western National launched a week ago, is available to all new tenants who sign leases as well as all existing residents who renew their leases. Shelton says that it is designed to help tenants and Western National, which manages more than 144 properties totaling more than 24,000 units.

“More than anything else, we’re hoping that this program gives some peace of mind to residents who are coming in and may be hesitant about signing a lease in this economy, or those whose leases are expiring. It lets them know that they can get out from under this financial obligation,” Shelton says. He notes that nearly all of the residents of Western National’s complexes are on long-term leases, typically one-year agreements, so they potentially face a considerable financial obligation if they get laid off.

The layoff protection program helps protect renters’ credit, Shelton points out. He explains that when residents who are laid off are not allowed to cancel leases, in many cases they either leave without notice or eventually have to be evicted, which harms their credit because such actions are reported to credit agencies. “Part of our thinking was that if people lose their jobs, they are probably going to skip or get evicted anyway, so this allows us to get the unit back into our inventory and rent it,” Shelton says.

Western National has designed the layoff protection plan to be uncomplicated. Tenants need to meet “only a couple of conditions,” Shelton says: They must provide verifiable proof that they were laid off, either a written verification from their employer or a phone number to call for confirmation if we can, and they must provide a 30-day notice. The program does not apply to tenants who are fired.

Although some other apartment owners or management firms may be allowing laid-off tenants to cancel their leases on a selective basis, Shelton says, “We’re the first company that we are aware of that has a dialed-in, completely rolled out program of its kind to let people get out of their leases if they are laid off.” The company is alerting existing renters through notices in all of its tenant newsletters and is informing all prospective new tenants when they come in for a property tour. It is also promoting the program in all of its advertising.

It’s too early to tell how the program will be received because it has just kicked off, Shelton says. Most new and renewal apartment leases are signed at the end of the month, he explains, so the company will have a better idea of renters’ response to the program after a month or two.

Western National Property Management is the property management arm of Western National Group, a 45-year-old multifamily acquisition, development, construction and property management firm. It is the second largest owner of multifamily housing in Orange County, where the Irvine Co. is the largest.

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