I am a newbie landlord with my first tenants who moved in last week.
Today I get an email asking for a list of items to be fixed (from ceiling fan to water heater to hinges on the door). They are asking if they can get it fixed and deduct it from the next months rent.
I know some of the appliances are not brand new but they are in a working condition. But bringing up a hinge on the electric panel is absurd.
How do I approach this request? There's no way I can fix all the items but want to show good faith in fixing some of them. But the tone in the email is concerning.
Hmmmmm...these sound like "professional" tenants to me. The request to deduct repairs from the rent is always a red flag and a clue that they could be tight on money. How well did they qualify for the property in terms of income/credit/job history/rent history?
During the move-in inspection, the tenants should have agreed to the conditions of the property and voiced any concerns at that time. There should be a section on the move-in inspection that has "repairs needing to be done".
If you're not wanting to pay for the repairs (which may be worthwhile if they're good tenants), then you could:
A) Arrange something with them ie. they pay month on time for the year and you'll handle some repairs free of charge), B) Negotiate for them to cover half the costs of repairs
C) Explain the above to them that this should have been voiced prior to move-in and they had agreed that the living conditions were satisfactory for them. Discuss what repairs you are willing to allow if they cover the cost.
They complained that the water doesn't stay hot for too long. I've lived in that house and know that it's in a working condition. Its not new but does it's job. Sounds like they want it replaced.
Should I be taking a compromise approach agreeing to some items? I hope it doesn't encourage them from continuing to complain.
Legally am I covered if they stop paying rent?
Every state has specific laws on the repair/deduct arrangement, non-payment of rent, etc. But, in general I'd recommend having your OWN handyman go there, right away, to make repairs and test any items claimed to not be functional. YOU should pay for it and have it fixed right away, before they can repair and deduct from the rent. Why? Because they may exaggerate the amount of time/work it cost to repair those items, or maybe exaggerating that they are in disrepair at all, possibly making things up, etc. If your handyman goes out there and fixes everything that needs to be fixed and takes pictures of everything, it's typically a better position to be in rather than letting the tenant dictate the repair/deduct arrangement.
A few questions:
1) is there a clause in your lease that states the tenant has seen and inspected the unit and agrees that it is in move in condition with no maintenance items that need attention? We always get them to sign off on this type of clause. Do you have pre-move in photos or a video? You absolutely should.
2) Does the lease says the tenant is responsible for any damage to the unit? DO NOT LET THEM DO REPAIRS THEMSELVES. From experience, they will either do a bad job, or not do it at all and still deduct the work from the rent. We have maintenance (you are your own maintenance department when you are starting out) do the repairs. Always take before and after photos.
3) Does your lease call for regular (or irregular) inspections with 24 hour advance notice at a reasonable time? It should, and with tenants like these, you'd want to inspect every 3 to 4 weeks for the first few months. Change it up--have a friend or relative do it once in a while--tenants will often say things to a third party they won't say directly to an owner.
4) Does your lease have an escape clause letting the tenant give you 30 or 60 day notice (we use 60 days) that they want to leave? BTW, that clause works both ways--we can give the tenant 60 days notice we want them out. Several reasons to do this: it sometimes avoids a tenant moving in the middle of night and you being unaware for a period of time; if the give proper notice and leave the property in good condition, they can get their deposit back, etc. Oh, one more--they must agree to allow you to show the unit during that time (assuming the unit is 'showable'.
5) Are you 'afraid' of the tenant? This is a tough one, because as a first time landlord, you may not be as familiar with the workings of the l/t laws (and customs) as an experienced tenant might be. I've found the only way to overcome fear... is to face it, and do what you fear most. If it will make you more comfortable, take Bubba along with you. Tell him to nod in agreement when you speak, and shake his head in disagreement when the tenant speaks, but don't let him say a word. (This suggestion is only half in jest.)
6) Do you know your state's landlord/tenant law? If no, study it. If yes, read it again. Knowledge will give you power.
Never do repair for rent. Unless you prefer repairs and not money.
These replies all have great advice. A couple of things to consider in addition: building on Marc's advice to face the fear and deal with these issues head on, his partial joke of bringing Bubba along with you holds merit. If you are concerned about these folks being manipulators I would always have a witness along with you for any visits to the property.
When you go and assess the issues, have a handyman review, I would be civil and upfront with them. If everything is looking good, as you remember it, I would politely address your concerns that you have. With someone else along with me I would likely say something along the following: "Well Bob and Sally, I have taken your repair list requests seriously and assessed each item. The request surprised me since we had just completed our move in walk through, which you may recall included my photographing the condition of everything. I have not found the issues you raised in your email to match the condition and working order of things. I want your time living in this home to be a great experience, and I also want our communication to be truthful. I am concerned about your email and its tone. Can you tell me more about what prompted you to send it?"
In my small experience as a landlord, and broader experience in life, I have found that an approach like this one is often helpful. It's not confrontational yet gets the point across. It also tends to throw some folks off that have manipulative tendencies. Your simple question may get you the true answers you suspect - i.e. They could be having money problems, etc.
I do ask my real estate investing experienced lawyer questions as well about cases like this to ensure I am taking proper steps and preventive measures.
Bob you got some really good and detailed advice. Sounds like a training opportunity; either they train you or you train them. Lots of room for being reasonable on both sides. Good luck!
Sounds like you’re not happy here. How about I do you a favor and let you out of your lease?
Originally posted by @Max T. :
Sounds like you’re not happy here. How about I do you a favor and let you out of your lease?
I had a tenant that I did this to and they have not had a complaint in a year. Sometimes it just sets them straight. Moving is a hassle and people really don't like to do it unless they have to.
Great question and great responses. Would love to hear an update of what ends up happening on this.
I don' like 'negotiating' with tenants. My preferred response is: "As the lease states...."
Great advice on this thread. I just want to second not letting them do the repairs themselves. First thing I would do is set up a time to come over and inspect these "problems" in person. If you can't do it, then find someone you can trust.
I also agree with others that your response is going to set the tone for the rest of this relationship. Remember, you are the one who owns the house and in position of power in terms of negotiating.
It's in my lease that tenant must notify me of any required repairs, that they are not to repair anything themselves but will mitigate damage if possible (ex., turn off water to leak), and that they will be responsible for payment for me to hire a licensed contractor to inspect and properly repair anything they have done without my permission. Tenants are allowed, however, to present a list within x days of moving in (I think it's 10) showing what they have found as it's unreasonable to assume they'll see every little thing wrong within minutes of taking possession. We will then decide if we will repair the items or provide a written explanation of why we are not -- for example, chip in counter, cosmetic only, will add it to list of discrepancies tenant will not be responsible for at end of lease term. I have pictures of entire unit (under sinks, inside oven and fridge, etc.) so proof if it was there beforehand or not. But a ceiling fan may need balancing, a window screen may need repair, and a hot water heater may not be set correctly even if functioning. Do not let them do the work, always go out and check yourself or send your own representative, and then you decide if it is required. But it is normal to get a list shortly after move-in as they become familiar with the home.
Always take before and after pictures of the property. On the signing of the lease I print out a copy of what the house looked like and in what condition that it is in, on the day they sign the lease. I have the tenants go through the property then sign the photo sheet stating that the photos depict the rental home as is shown in the photos and I have that days newspaper sitting beside the photo signature page, depicting the day of their move in and acceptance.
This means I take pictures of bathroom and kitchen faucets and shower heads. Kitchen counter tops, toilets, tiling, Venetian blinds, carpeting. Light fixtures, door knobs. Basement floors, furnace, air conditioner, etc.....EVERYTHING. Also the outside of the house, the manicured lawn, the windows, etc.
When they themselves sign that photo sheet, they acknowledge the condition of the property as of their move in day.
This illuminates the "Testing Phase" of new tenants moving in and requesting repairs.
The bottom line is that a rental home should always be in move in condition prior to showing it.
Thanks for the responses. Really valuable advise in this thread.
The tenants moved in last week and I had given them until now to make any objections to the condition report that I had printed out. They have come out with a list that ranges from cosmetic to something that hinders their day to day living.
The list is long and some of them are big ticket items. For example the dishwasher has a loose door but it works. The fan is a little loud but it works.
Am I legally required to agree to fix?
As long as everything functions and is "safe" you are not obligated to fix anything.
You should never have told them they could make objections after they move in. By doing so you put them in control of your property. To counter that, as already stated, you tell them they are never permitted to do any work on the property and that you will take a look and address necessary repairs. Necessary meaning the repairs you deem necessary not your tenants.
Take your time in getting over to inspect, give them a date about 2 weeks down the road to allow them time to settle and to let them know that you do not see any urgency in the items they have mentioned. Take a fey hand tools, repair some minor items and tell them that large items are functioning fine and will not be replaced.
It is illegal for them to stop paying rent. if they continue complaining do as suggested and let them out of their lease. Never jump at a tenants request that is not a major and urgent repair. In time you will train them to stop complaining or they can leave.
I fell for the I will trade rent for work back in 1980 ish.. did not work then does not work now :) about the only way to consider it maybe is they do the work before they move in.. try that one and see how many take you up on it. !!!
I think this thread is a great advertisement for professional property management! When I first started I was scared to death of property management from all the horror stories I had read. Now that I have switched everything to management something like this simply couldn't happen. They have systems in place to prevent these sort of situations. Like mentioned above they have move in check lists the tenants have to sign beforehand accepting the condition of the rental. They are the buffer to having to bring bubba with when you go to your rental. Also I would love to be a fly on the wall if a tenant suggested trading anything for rent lol. It's amazing how your perspective changes with time, spend more time doing things that make you money and less that are a waste of time like arguing with tenants!
Yes.. by spending a ton of money on PM companies LOL. At 10% off the top every month plus a full months rent?! Yeah that will save you money... OR you can grow a pair and tell the tenant tough tittie.
Legally they can not refuse to pay rent, only the courts can make that decision. But you also can't refuse to fix up the property that you're legally responsible. If you do so they could possibly sue and courts could rule they can stop paying rent if the stuff isn't fixed. Normally it's structure, heating and plumbing, specifics depends on the state. But if that fuse box door is broken and the door is falling off the hinges they could also sue if they have a break in or electrical fire because they've requested it be fixed. Just make sure the built-in appliances are working properly. It doesn't have to be new, but it does have to work.
@Bob Drew Refer back to your lease and send your response in writing. Preferably by mail. Good luck!
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing