Tenant pays first $100.00 in maintenacne???

16 Replies

I was having a chat with a co-worker over Slack about ways to keep costs low in rentals. He was in a different state than me, and had years more RE experience than I have. His background was acquisitions and purchasing large tapes of properties. He said something that struck me, and I didn't really want to fact check him in the group setting. So I'll bring it here.

"Write it in your lease's that the renter is responsible for the first $100.00 of any issue. You can put in language that negates the charge should it be a major CAPEX like an HVAC. This prevents erroneous maintenance requests, or a tenant trying to get you to upgrade the property through work orders. Before occupancy, you need to have a thorough inspection (with pictures) done in person that they sign, along with a healthy deposit (no $99 move in specials). That will keep them from calling every time the floor squeaks, and taking care of things a little bit better since they know they can't pull the 'it was that way when we moved in.'"

What do yall think of that? It seems smart, but is it legal?

I’ve have clauses in several of my leases that tenants pay maintenance up to 250. Of course enforcing this can difficult. Probably not worth evicting over small stuff, at least for me.

It depends on your tenant.  If your tenant lives hand to month like many others, I would personally recommend against this because the tenant will be disincentivized from doing repairs or even informing you of major repairs even when absolutely necessary.  The problems that arise from not performing necessary maintenance can be much more expensive than a few hundred dollars of maintenance and I personally see it as penny wise pound foolish.

My lease says $10. That keeps them from frivolous calls like light bulbs and such. But $100 might keep good tenants from signing a lease. I know I wouldn't sign that lease if I was a tenant. 

First, I do not let tenants do their own repairs.  It has been proven to me over many years that is a dark and dangerous road.

In our leases, it states that if the maintenance issue (lets use clogged toilet or sewer main) is a result of normal wear/tear or lack of owner maintenance, the charge rightfully belongs to the owner.

However, if the tech pulls out a toothbrush or Barney the Dinosaur out of the drain, the full charge belongs to the tenant. 

We go over this topic in depth during lease signing, and without exception, the tenant says "that's fair".  They then initial that paragraph so there's no "I didn't know you'd charge me for that."

Changing lightbulbs, for example, is the tenant's responsibility.  However, if they still want maintenance to do the work, they will be charged for the service call.  Fair for everyone, IMO.

@Marc Winter Yes, I agree, there's no tenant maintenance. I didn't mean to imply that there would be.

I agree completely that the lightbulbs, etc are totally on the tenant.

I just don't want to get Work Orders for every ding they find in a wall. I get things that break, dishwashers, disposals, clogged drains, toilets, showers.

I'm looking for a mechanism that would decrease the "This house is 30 years old" work orders. Open to any and all suggestions.

As a landlord, you should expect to take on certain responsibilities. If you charge someone to live in your asset/property, you should keep it in working order so you can draw the best possible rents. You should work it in to your rent that you cover routine repairs and maintenance. 

I like what @Marc Winter said. If it is found to be the fault of the tenant, the tenant is on the hook. If it is something that is bound to deteriorate over time, that should be built into the owner's repair cost figures. Having a good conversation of what is acceptable up front is the best policy. Communication and mutual understanding will keep great tenants in your properties.

Certainly are advantages and disadvantages to having such a clause.  Advantage is tenant will think twice about calling for minor "annoyance" items.  Disadvantage is that tenant may opt not to notify LL/PM about something needing repair due to concern about having to pay the charge.  I have $250 clause in my leases and find it beneficial.  Items connected to wear&tear, capex, etc are excluded.  I will continue to use this provision in leases, but intend to tighten up language to emphasize that all repairs must be identified timely and must be authorized by landlord/PM.

I would not do this because I think a lot of tenants would either try to fix it themselves or wait until the problem is really bad to notify you. So a small problem like a leaky sink which could of been fixed by a plumber easily now is a flooded kitchen before you get a call because the tenant was trying to save $100 and was ok with keeping a bucket or towel under the leak.

I guess the $10.00 clause would keep the towel bar fell off the wall.and the door knob is loose calls down but I tend to weed those tenants out at the initial showing..

Terrible idea. Think about it from the tenants perspective: they don’t want to lose $100 so they’ll never call. Therefore a slow leak that could have been repaired easily just turned into expensive water damage, mold, restoration work, vacancy, etc. and good luck getting the tenant to pay for all that even if it is their fault and no matter what your lease says. It could easily exceed their deposit and all you can do after that is garnish wages but hard to squeeze any juice from a dry lemon. As an owner I only trust myself or my agents to maintain my property. Can’t do it well without an open line of communication with the tenants or going to the property regularly. Charging for letting me know about an issue discourages communication. Landlords aren’t allowed to keep deposit money for anything considered normal wear and tear, so not sure if doing what you’re talking about is legal. Even if it is I don’t think it’s wise. I appreciate when tenants let me know about issues so I can get in front of them before they turn into bigger problems. If you have a tenant that calls for every spider and lightbulb, educate them on what is an appropriate call or get rid of them, it’s not that hard.

Originally posted by Account Closed:

I was having a chat with a co-worker over Slack about ways to keep costs low in rentals. He was in a different state than me, and had years more RE experience than I have. His background was acquisitions and purchasing large tapes of properties. He said something that struck me, and I didn't really want to fact check him in the group setting. So I'll bring it here.

"Write it in your lease's that the renter is responsible for the first $100.00 of any issue. You can put in language that negates the charge should it be a major CAPEX like an HVAC. This prevents erroneous maintenance requests, or a tenant trying to get you to upgrade the property through work orders. Before occupancy, you need to have a thorough inspection (with pictures) done in person that they sign, along with a healthy deposit (no $99 move in specials). That will keep them from calling every time the floor squeaks, and taking care of things a little bit better since they know they can't pull the 'it was that way when we moved in.'"

What do yall think of that? It seems smart, but is it legal?

I keep tenants on month to month leases. I also give them the speech when the lease signing occurs. I tell them the basic rules are not to damage the place, pay rent on time, and don't become a demanding tenant with frivolous requests because I will invite them to move to a place they would be happier in a heartbeat. I actually started telling people that when one tenants boyfriend during the lease signing was asking me to relocate shelving 2 inches higher and other such ridiculous requests. That's when I gave the speech and told him how the world works...I've since given that speech to tenants and have had no frivolous requests since. 

Account Closed yes putting that clause in your lease will reduce maintenance request, because they won't report (or fix) any problems. Or you will get a DIY repair or worse yet they will cover up the problem. I want my tenants to report problems. This policy is penny wise and pound foolish in my opinion. If it is a frivolous request, I just deny the request. If they cause the damage (like a broken towel bar) then I make them pay. Fair is fair, you break it you fix it, normal wear and tear, I fix it.

@Joe Splitrock the items your talking about we will catch when they move out and charge them from the deposit but the stuff you really want to catch is the stupid stuff that is preventable with regular maintenance they do and will never report like not changing the filters for the ac I have the same language in my lease but I also if they cause the roof, ac or any other capex damage they are paying

I do the same thing. I have $150 deductible on repairs unless it's something big. My rentals are much nicer than the average rental and they are priced slightly under market which means I typically get 50+ calls in the first 5 days whenever I list a property for rent. I explain to the prospective tenants that in exchange for lower rents I expect tenants to adhere to maintenance rules such as yearly carpet cleaning, monthly house cleaning, AC filter changes etc. I do yearly inspections to make sure things are up to date. All of this is my rental agreement including house rules. When I place a renter, I look for tenants that are handy and really look for people that will care for the place as their own. Service calls in California are expensive. Changing a flapper on a leaky toilet is a 10 minute job and less than $10 in parts. But just to get a handyman to show will cost $75 just for the service call. Having a renter that cares and has the skills to do minor upkeep makes a ton a sense for me. The typically rents on my units range here from $2200-3600 in California so I've never tested this system on less than $1500 rentals but it works in my market. Also, my average tenant turnover is around 5 years.

I would much rather have them contact about an annoyance rather then not contact and it turn into something major. I don't want a small water leak to cause them not to call because worried about $100 and it end up turning into $5,000 in replaced flooring and more.  If calling about stupid small stuff becomes an issue, we can always address it with the tenant.  We do have in our lease that tenant is responsible for routine things like lightbulbs, filters, and cleaning, etc.  Also, have it where they're responsible for lawn maintenance, and if not will be billed for our lawn guy doing it.  We always mow a day or two before move-in so they know how we expect it to be maintained.