can a tenant demand money for work done of his own remission

26 Replies

Hey all I have a question,

I am fairly new to the landlord process but I have a few properties. and I started noticing I might need help with some of the repairs. I had a family member who was in a bad situation who offered to help me. but he lived in another state.

So what I did was to purchase him a home and made a agreement to sell it to him for what I paid for it and finance it myself.

we agreed on a extremely low payment for a set period and everything was fine he helped me when I couldn't go myself. or when I needed extra hands.

shortly after he moved in he started to remodel the home. he put in a new floor in the kitchen and re tiled the bathroom etc...

I didn't ask him to do any of these things. but didn't think anything about it as far as I was concerned it was his home.

I don't call wells fargo when I remodel why should he ask me.

we had always done the purchase via verbal agreement but about two years in he said he would prefer a contract.

I agreed but told him that he would have top pay for the attorney to write the agreement  < probably about $200.00 > so he hemmed and hawed and I got the contract made but he never signed it. I asked him several times but he always blew it off. I explained all we needed to do was to go to a notary but again nothing and he never brought it up again

yesterday he informed me he was moving out and he wanted to be paid for the work he did on the home and he grabbed a arbitrary number from the air of $4000.00 that he wanted now or the home would not be in good condition when he leaves. he suggested he would remove any improvements he did and the home would need a lot of work when he was done..

Now beyond the entire blackmail thing can he do that?

can a tenant < because that's how I am looking at him now> demand payment for work they decided to do on their own? I never approached him about tiling or doing anything like that. I did offer to help but again because he was buying the home.

and can he vandalize the home before he leaves and remove something that is firmly affixed to the home? tile lights heck the hvac for all I know

Tough spot.

No good deed goes unpunished.

Are you in a landlord friendly or tenant friendly state??

Since you didn't get a written agreement it's your word against his in a front of a judge in court. Is your family member judgment proof meaning they have low income and bad credit etc.??

You could if local to the property go take pictures with a date and time stamp of the improvements. This way you have a record if he destroys the property when you go to court. He could say you gave the lower rent in exchange for the improvements.

Have you looked at these "improvements" he has done to the property?? If the finish is not professional he might have actually devalued the property instead of improved it by poor application and use.

At this point you might want to get a consult from an eviction attorney that is local to the property to see options.

No legal advice given. 

Whose name is the house in?

Are the repairs worth $4000.00

You may want to treat him like a tenant and just pay him to leave, especially if the house is in your name.

This is a case where need to lawyer up asap.  I would hope a letter from an attorney with a settlement proposal would keep the damage to a minimum. 

I think the circumstances will favor you ie  the burden of proving the amount will be on the defendant.   A court in equity will likely factor the cost of material into the mix but I doubt labor will be allowed.   Hopefully, again a quick settlement offer of $0 but let them move on down the road will suffice.  

The family reunion will be fun next time out.

Consult with local counsel asap.

Hi Michael --  First in answer to your question . . . "improvements" a "tenant" makes are not something the landlord has to reimburse the tenant for unless otherwise agreed.  

In the future, agreements should be in writing.  Contracts for purchase have to be in writing.  A handshake isn't valid for a contract of one year or more.   

You may want to check Dodd/Frank Act.  My understanding is that carrying a mortgage for a non-investor is no longer allowed.  

"So what I did was to purchase him a home and made a agreement to sell it to him for what I paid for it and finance it myself." @Michael W.

it sounds like you bought him a house and if he wants to move out without selling it and charge you for some improvements  give him some money for the repairs and have himsign a quit claim deed otherwise he can keep the house for a long time rent it and sell it down the road for appreciation. 

My experience in courts with tenants with repairs is as follows.

You get in front of a judge and the best thing to do usually is let the tenant dig a hole for themselves by talking and talking. Sometimes they like to feel important and talk over  a judge..... : )

Things usually start really going the landlords way then. The tenant is seen as drama by the judge but you the landlord seem respectful and in control. The judge's like this as you are like a fresh breath of air. If your court case is beginning of the week or early morning to later in the day also affects the judges patience and demeanor.

Typically the tenant says I did this and this and took off the rent owed. The judges asks the tenant if they informed the landlord IN WRITING in an expedient manner and allowed the landlord to do the repairs with their own people??

99% of the time the tenant has nothing and they lose the argument. A judge one time was telling a tenant that he in his 15 years on the bench had only seen one time a tenant had given notice of repairs needed  in writing. The judge reminds the tenants they are under oath with the questions and to answer truthfully or they can be place in jail. Tenants lose and then act big once outside the courtroom again. It's all about emotional control really and the tenants rarely have it.

In their mind they are some high powered attorney who will win their case when other tenants have lost............ : )

No legal advice given.  

the home is fully in my name. I have paid all property taxes and insurance that are also in my name. I told him I would transfer it after the agreed upon time. I do not have a lease for him but he did have me create one that he turned in to ssi but that was a rental lease not a purchase one. He never signed a purchase one . He has stated he was moving out but that was by word of mouth. He refused to put it in writing

well this is not really a regular tenant situation. He helped you with repairs and acted like a PM for you.  That was worth money.  He tiled a bathroom floor.  He put down a kitchen floor.  

What else did he do?
He paid you an agreed upon rent while he was there.  The house is worth more now when when he moved in.

Give him some money and let him go.  Its like cash for keys.  
You will get  more money for the house then what he was paying.

Wish him good luck, give him the money and just forget about it.  

@Michael W.

 In this business, a handshake, someone's word, a trustworthy soul, isn't worth a damn thing.  There are exceptions that prove the rule but there's a reason why they're called exceptions.  I hope you learned something from this experience.

Good Luck!

no I was the property manager. He was someone I could call if I couldn't make it to a property to check a breaker. More of a handy man. And he tiled the floors of the home he was buying. He took it upon himself to buy the tile and put it down. He didn't ask me and I didn't ask him to. I looked at it like when a Tennant installs a ceiling fan or a new bathroom faucet because they like that one better. It wasn't needed he just wanted to

I also looked into the original lease we had setup and it has a comment about improvements." improvements made by the tenant shall become property of the owner at the conclusion of the agreement.

it also has a stipulation about repairs stating that any repair that cost more than the discount must be approved by the owner or the tenant will be responsible for the entire cost of the repair

@Michael W. . He knows what he is talking about. He always ends his posts with "no legal advice' but you should take his comments into consideration. He knows what he is talking about. Especially the part about keeping quiet in front of a judge if it comes to that. 

And my own advice is to document document document. Keep records of everything. And a handshake deal or verbal deal is only worth the paper it is printed on.

I'm sorry you have to go through this. A family member is a tough tenant to evict.

Mindy Jensen, Real Estate Agent in CO (#FA100049656)

that's the sad art I'm not evicting him. he just wants to move out.all on his own with no reason

Originally posted by @Michael W. :

I also looked into the original lease we had setup and it has a comment about improvements." improvements made by the tenant shall become property of the owner at the conclusion of the agreement.

it also has a stipulation about repairs stating that any repair that cost more than the discount must be approved by the owner or the tenant will be responsible for the entire cost of the repair

Seems like you have your position and are looking for people here to affirm your position.  While legally and logically you may be correct, sometimes the path of least resistance is to throw him a settled amount in exchange for his signature on documents that eliminate his ability to come after you further or to reside there any longer.

I think pretty much everyone on here is spot on correct but at the end of the day I'm going with Barbara Goodman
Originally posted by @Jon Behlke :
Originally posted by @Michael Wright:

I also looked into the original lease we had setup and it has a comment about improvements." improvements made by the tenant shall become property of the owner at the conclusion of the agreement.

it also has a stipulation about repairs stating that any repair that cost more than the discount must be approved by the owner or the tenant will be responsible for the entire cost of the repair

Seems like you have your position and are looking for people here to affirm your position.  While legally and logically you may be correct, sometimes the path of least resistance is to throw him a settled amount in exchange for his signature on documents that eliminate his ability to come after you further or to reside there any longer.

Ill admit mentally I do have my opinion and I was hoping someone would say something like he has no legal way of claiming payment for work you never agreed on or asked him to do. And honestly a lot of it is based on the fact that I was helping someone out.

He is a convicted felon with no job or credit at all. there is no way he could ever buy a house for what I was charging him even with excellent credit. 

and were it would be easier to throw money at him to make him go away, I just cant rationalize being taken advantage of any further.

This $4,000 is going to be the cheapest education you can buy when it comes to tenant/landlord relationships. I learned it early on with a Contract for Deed that went bad by the new "Owner" not paying "His" taxes. It took an act of congress to get the property back in my name. I was 24 years old and very trusting. I have not made this mistake again. 

Create a lease with a local attorney and force all tenants to sign and pay before moving in. If you choose to create some sort of sale or lease agreement with someone in the future consult your attorney, have him draft the paperwork, and force the "Buyer" to pay these costs as part of the closing. Otherwise, keep renting and you will be fine. 

Good luck to you! Just know that all of the lessons you learn become priceless the longer you choose to stay involved in REI.

407-877-2427
He sounds like a great family member.....
Michael Wright you didn't get taken advantage of. He gave you the motivation to add a property to your portfolio. And he improved it for you while paying you rent. It's too bad he turned out to not be a nice guy. You've learned a lot along the way. I say pay him off after he leaves it in good condition and signs a release. You can probably negotiate him down a bit. You've learned a lot along the way and so has the BP community.

I seem to be hearing the word tenant and him paying you rent a lot and I don't think I made it clear I didn't increase my portfolio I didn't purchase this house for me I purchased this house for him with the expectation that he was buying the home From me I was simply financing it for him because he had no ability to do it on his own and him being a family member he said while I'm down here if you need help let me know and I'll be glad to help you I did originally created him a rental lease but that was because he only needed it for his social security the entire home from day one until now has been a purchase I had my attorney create the purchase agreement he just never find it but he kept paying the same amount of his mortgage payment every month that we agreed on from day one it was never referred to as rent I just want to make that clear in case that changes any misconceptions he wasn't a property manager I handle all tenant I handled all issues he was merely available if I needed help or I couldn't make it for something small like flipping a breaker.  anything larger than that he was paid for separately

and some of that IS my fault I referred to him as a tenant as in the normal tenant landlord situation. but I am unsure how to refer to him as in the owner financing situation.

originally my attorney said I should "rent him the home" for 10 years at a set amount and then transfer the title for $1.00 because of the owner financing laws at the time. only later did he write up a traditional owner finance contract that stipulated the same exact payment and term length but instead it listed it as a sale.

we tried to do it with no interest but he said legally we couldn't so we manipulated the purchase price down and included his taxes and insurance for the same amount that the original lease contract had his monthly payment

At least three F-word tenants to avoid:

Friend

Family

Felon

And if the interested party fits into more than one of those - then that policy should go doubly or triply :)

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From what I am reading, you did purchase the house for him.  However the house is in your name.  Therefore, unless there is something that I missed in all of the posts, it sounds like your intent was to purchase the house for him, but the deed was never signed so the house is technically yours. 

Are you saying that it was your intent to act as the "bank" and finance this property for him? If so, and if the house is in your name, you are the owner and he is the tenant. 

You may be an unintentional landlord.  On the bright side is that you would still maintain control of the property, if it is fact in yor name.  He can't evict you, but you can evict him.  Give him the "cash for keys" and have a locksmith standing by.

If there is something that I missed, please let me know. 

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