Sep 11

Does Your Tenant Have The Right To Withhold Rent Payments?

withhold rent payments

Does Your Tenant Have The Right To Withhold Rent Payments?

One of the biggest complaints that tenants have is that the landlord will not repair maintenance issues in a timely manner.

Failure to make repairs in a timely manner, or failure to make them at all, is cited as one of the main reasons that tenants give notice and move out of a rental home.  Many tenants feel that they have the right withhold rental payments in an effort to try and force the landlord to make repairs.

 

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Does Your Tenant Have The Right To Withold Rent?

I get asked all the time by landlords and property managers if the tenant can do this.  In some areas, the answer may be “Yes, your tenant can.”  In other areas, the answer may be “No, your tenant must pay the rent anyway.”

 

But, it isn’t as simple as the tenant just being allowed to not pay rent until the landlord fixes the problem.  In most states that allow the tenant to withhold the rent, the state will usually require the tenant to put the money in an escrow account until the landlord makes the necessary repairs.

 

In states that allow the tenant to withhold rent, the following requirements must be met:

  • The issue must be serious
  • Not caused by the tenant
  • Tenant has to be current on rent
  • The tenant must be in compliance with all lease terms

 

But again, rent withholding can only be done in states that allow it. Not all states allow the tenant to withhold rent.  See your state law on withholding rent to find out what rights your tenant has.

 

Rent withholding can only be done in states that allow it. Click To Tweet

 

Habitable Property

In most states, a landlord is required to make sure a rental home is in habitable condition when the tenant first moves in.  The landlord is also required to make repairs and keep the property in habitable condition.

The definition of “habitable property” is one that has adequate heating, water, electricity, cleanliness and is structurally sound.  Remember that laws do vary from state to state and from city to city.

Know What You Are Required To Do

It is your job as the property owner or property manager to know the local codes regarding rental properties in your area. You can usually find this information at your local housing authority as well as local health and fire departments.

 

The bottom line is that things are going to break. Quite frankly, it is just good business to keep your rental properties in good shape.   Your tenant should never have to threaten to withhold rent in order to get something repaired.

 

You should always fix any maintenance issues in a timely manner to protect your investment and to keep your tenants happy.  Unhappy tenants will move which will cost you more money.  Common sense says your goal should be to minimize tenant turnover by trying to keep your tenants happy.  One of the biggest expenses a landlord faces is a vacant property that needs to be fixed up before it can be rented again. 

 

It is just good business to keep your rental properties in good shape. Click To Tweet

 

Tenants Do Have Rights

Do you have a tenant that is threatening to withhold rent?  Remember that your tenants do have rights. Even your most frustrating ones!  The best way to solve the issue is to first fix the maintenance issue. This will ensure that the tenant doesn’t have the right to withhold rent.

 

We all know that in some cases, the problem the tenant is complaining about is a result of something the tenant caused.  These types of problems are so aggravating to anyone managing rental properties.  After all, why should you pay to fix something that shouldn’t have been broken in the first place. 

 

At the end of the day, it really doesn’t matter how it happened.  The problem still needs to be fixed. Hire someone and take care of the issue. I have found that the contractor will usually state what was found and if they feel the tenant was at fault.  Once you know what happened and the problem is fixed, you can make a decision as to who is going to pay for the repair.

 

A great example of a tenant caused issue is a stopped up drain line.  The tenant reported the issue to the office. We sent a plumber out to fix the problem. He called after he was done and said that he filled two buckets with food that had been dropped down the drain by the tenant.  This was clearly the tenant’s fault and the tenant was billed. 

Be sure and have something in your lease that states that maintenance issues determined to be caused by the tenant will be billed to the tenant.  If the tenant throws a fit, refer them to the lease.  Smart tenants will realize that in the future, they need to take better care of the home they are living in.

 

What Can You Do To Make This Easier

Maintenance issues are a huge problem for many landlords and property managers.  We all know it can be a struggle to find a qualified contractor to make repairs, especially if it is a small job.  If you are lucky, you can find a local handyman who is willing to take care of the small repairs that come up on your rentals.

 

Are you having trouble finding a contractor to fix maintenance issues?  The other thing you can consider doing is to allow the tenant to hire someone to make the repair and take it off their rent the next month.  This relieves you of the responsibility of hiring someone, scheduling the repair with the tenant and then making sure someone shows up to let the repair person into the home.  

 

Always insist that the tenant get at least two estimates and give you the price before the repair is done.  The tenant must also give you the receipt for your records before the repair can be deducted from the rent. 

 

I have found that the tenant is usually happy to do this.  It allows them to be in charge of getting the repair done on their schedule.  A happy tenant with a maintenance issue that has been resolved is a good thing.  The last thing on the tenant’s mind is withholding rent because they are in charge of getting the issue fixed.

 

Don’t Like Letting The Tenant Hire Someone?

Keep in mind that if you fail to make the necessary repairs and you won’t allow the tenant to hire someone, in addition to the tenant withholding rent, the tenant may call local authorities about the issue. 

 

An inspector will come out, look at the problem, probably find several more problems and then send you an order to repair any problems found. You will also probably be fined and given a deadline to have the repairs done by.  Someone will then be sent back out to make sure you have done the repairs. 

 

It is always a bad idea to let any problem escalate to this point. The costs can be huge.  The tenant may withhold the rent, you will have fines to pay and you will have to pay to make the necessary repairs. 

Fall Out

You gain nothing by not making repairs.

 

Your tenant may also decide to just move out if he feels the problem is too severe to live with and it renders the home uninhabitable. The tenant can also sue you and might prevail if he can prove the situation was harmful to his families health.

 

At this point, the tenant isn’t paying rent for a home he and his family don’t live in. You have a vacant home that isn’t making you money. 

If you are lucky, you will only have to:

  • Paint the home.
  • Clean the carpet.
  • Hire someone to clean the home.
  • Cut the grass.
  • Pay the utility bills. Pay the mortgage out of your pocket.

 

If you are unlucky, in addition to the list above, you may have to do extensive repairs to the home. This will cost you even more money for repairs and lost rent.

 

It would probably have been cheaper to just fix the maintenance issue, keep the tenant and continue to receive the monthly rent.

 

The bottom line here is that even if your tenants don’t have the legal right to withhold rent, they can and do with hold it.  Once that happens, the only thing you can do is start the eviction process and get rid of the tenant. 

 

The bottom line here is that even if your tenants don’t have the legal right to withhold rent, they can and do with hold it. Click To Tweet

 

Listen To Your Tenants

Many tenants get frustrated because they think the landlord isn’t taking the issue seriously. Communication is key whenever you have any kind of issue come up. Don’t hide from the tenants and refuse to talk to them.  Most of them just want to be heard and don’t expect you to get someone out there right now.

 

At the end of the day, it doesn’t matter whether the tenant has the right to withhold rent. We all know that they can and will do what they want to do. 

 

When you manage rental properties, you need to have procedures in place and follow them every time.

 

  • Don’t give the tenant a reason to withhold rent.
  • Fix maintenance issues quickly. 
  • Charge the tenant for any issues that were caused by the tenant. 
  • Follow your eviction procedures if your tenant decides to not pay the rent. 
  • If you are in a state that allows the tenant to withhold the rent, make sure the tenant doesn’t have a valid claim to withhold the rent.

 

This is a people business.  Everyone has a different idea of what is fair.  A solid lease will protect you and clearly define the rights of you and your tenants.

 

Do you want to make money as a landlord? 

Take care of your maintenance requests promptly, make sure the tenants are happy and reduce your tenant turnover.  A happy tenant will pay the rent, stay in the house longer and will make you more money.

 

Dealing with an unhappy tenant is never fun.  Get some tips here.  

 

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