What do you do when a tenant covers expenses?

Question

We have a tenant who has a background in construction who moved in to our A class property about a month ago. He discovered a problem with the light fixture in the entry way and has offered to replace it with a similar light fixture that he found for $50 at Home Depot. We will go make sure it gets installed correctly, etc. but he asked us if he could reduce next months rent by the amount of the light fixture.

Is reducing rent when the tenant covers expenses OK, or do I need to get him to pay the full amount and then write him a check for the light fixture?

Mike Dymski · Answer

I don't understand having residents perform paid maintenance.  You can either have your bonded or trusted maintenance person perform them under your simple recurring systematic process or you can have an unknown perform them, manage a separate process, dedicate mindshare to the decision, and take on liability.

Coco Zuniga · Answer

I am a renter myself and our toilet flaps started staying up after flushing, causing the constant run of water.  I asked my landlord if it was ok to change the flaps and she was so grateful!  ($11/each Home Depot).  She asked me how much they were, sent me a check for $33 AND took $100 off my next months rent because she was so grateful she didn't have to hire someone out!  I'm closing on my first property in a few weeks and have decided THAT'S the kind of landlord I want to be!!!

Lynn McGeein · Answer

If the tenant is a licensed contractor who would provide a receipt, then I would consider allowing it.  A "background in construction" would not be sufficient.  I stress to all tenants that they must do what they can to mitigate damage if necessary, like turning water off in a leak before it creates more damage, but they are not to complete repairs and can be liable for cost of inspections and additional repair if  necessary if they do it on their own.  I realize changing a light fixture is fairly simple, but what if the problem is in the wiring, not the fixture.  Or if they wire it incorrectly and anyone is harmed, you are held liable.  It will cost you just as much if not more to have it inspected by a licensed contractor to insure it has been done correctly, so we either do it ourselves so we know it's done to our satisfaction or we hire a licensed contractor as it is not worth the liability risk to save a little money.

Shaun Patterson · Answer

their is some liability in your tenants doing work on the house. I'll play devils advocate and say what if towards the end of the lease they fix the fan and everything looks ok. They move out and a new tenants moves in and because of something you and the old tenant overlooked the fan falls on the new tenant(yes I know it's extreme). Who is at fault who's insurance do you go after?

Mike Dymski · Answer

Easy maintenance calls are, well, easy and inexpensive and a lot cheaper than spending time addressing and inspecting one off requests.  Most investors can make multiple times the hourly rate with their time than the hourly cost of maintenance or inspecting it; otherwise, they should be the maintenance person rather than the investor.

And residents will tell you a lot of things regardless of their class, true skill set, rent situation, maintenance cause, etc.

God forbid something happens them in the process of fixing it.  Low likelihood, catastrophic consequence.  Many investors opt for easy and expensive when catastrophic could occur, even if unlikely.

It's so easy to get sideways with residents when they are doing work and deducting the cost from rent.  Not worth the headache.

Shannon Slade · Answer

@Lauren Burkert

You really need to take an extra precaution when allowing electrical work to be done at your home, there are way too many variables that can cause a problem.

Wilma E. · Answer

If you are confident in your tenant's construction skills, and he is trustworthy, I'd have no issue with him deducting the cost from the rent. You would need a receipt though for the work done for documentation towards your taxes.

Deanna McCormick · Answer

NO Work done by tenants on my property PERIOD, Insurance nightmare.

If the light didn't work,, then buy one and have electrician install or do it yourself.

Now that's its over,, simply write check to tenant for cost of light, / labor, / and have him write you the proper amount for rent.

You'll learn once you have someone fall off a ladder and sue you for every dime you got.

Hire it or do it yourself and if you hire it done have a person that's got his own workers comp insurance or add that to your policy for coverage.

Shar Day · Answer

Hi all, I find myself in a similar situation. My tenant's 9-5 is in construction & apartment complex management. He is offering to replace the counter-top from Formica to Granite, and he would cover the cost and labor. I am looking around for a document I can use as a form of agreement. I can come up with one, but also want to make sure am not leaving anything out. Am looking for it to cover things as: who covers the cost, how long it would take, a list of items that would be replaced, inspecting it afterwards, item stays after they leave, cost can not be substituted for their rent etc. Thanks all in advance.

What do you do when a tenant covers expenses?

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