Repairs paid by tenant and reimbursed?

Question

I had a sewer related repair that the tenant took it upon themselves to get repaired after hours.

Tenant paid for the service/parts already and offered to pay half due to it being after hours (me reimbursing the tenant for the other half).

Any issues with this to consider? Maybe tax related considerations?

Thanks!

Nathan Gesner · Answer

I'm not a fan of Tenants coordinating their own maintenance, but this one is on the ball! Pay half, ask them for a copy of the receipt, and be happy you have such a good renter.

Patricia Steiner · Answer

Here's where you need to start and it needed to be done before you leased the property:  what does your lease say about reporting maintenance repairs including emergency ones?  Most require that the owner/PM be notified.  The service needed to be engaged in your name for tax purposes and the fact that the tenant paid for it at the time of service is problematic.  Now he wants to be reimbursed for half...did he hire his brother?  Is he actually the plumber?

Since you've authorized the service, you're probably stuck at this point but I would tell the tenant that in order to reimburse him, you will need a detailed repair invoice from the contractor - showing payment made - that is in your name as the owner on the invoice.

Going forward, if the tenant can get a plumber faster - more power to him but you should speak with the plumber beforehand and ask that he call you BEFORE doing the work to describe the issue and cost of repair.

More than likely, you have nothing more than a great tenant who wanted the repair done fast and right - and was willing to invest in it...but it's just as possible that one day it will be something quite different.  You're running a business so it's important you don't let the tenant take control and run his agenda with your property and pocketbook.

Theresa Harris · Answer

Only time I would was if it was a true emergency and not something caused by the tenant.   Anything caused by the tenant, they need to pay for and ideally you have your professional come in and fix it, so you know it was done properly.  They can then bill the tenant.

Bruce Woodruff · Answer

It is better that they called you to get permission. But still....

1) To get a proper write-off, your CPA will need a invoice from the contractor. You should have paid them in full and deducted some amount from the tenants rent via a written document.

2) If this is a one-time occurrence, not a big deal, but this could set a precedent, both for the tenant and in your mind, that it is ok to just take care of things themselves. Not ok.

3) Who checked out the Contractor? You certainly did not. Was he properly licensed/bonded/insured? Did he have Workers Comp for his employees? What if one of them had fallen into an open trench and broken their neck? With no WC, that could be on you.

I could go on and on, but you should get the point. I would not do this again if I were you...

Bruce Woodruff · Answer

Generally this is always a big NO. Seems like this may be a special situation....? Remember you're running a business and you should be the one dealing with anyone working on your property. There are liability/tax/accounting/control issues that you need to be aware of.

Theresa Harris · Answer

I agree with Nathan.  The fact that the tenants realized the call after hours would cost more and they did it, and are offering to pay for half as a result, pay for the other half.  I'm guessing someone flushed something they shouldn't have and if that is the case, should it happen again, let them pay 100%.

Bruce Woodruff · Answer

That right there would be enough for me to boot this tenant the heck out of your property. They have no right to do this....it is not their property, it is yours....if you don't realize this - and make them realize it too, they will continue this behavior. What will they assume they can do next time?

Tenants do sometimes assume that they can do what they want because they are paying rent. This is when they need a smackdown, errrr reality check.....

Jason Eiceman · Answer

I am not sure exactly what happened, to be honest.  There is a pump that stopped working - I called a plumber to come take a look and they said the motor burnt out and needed to be replaced - I setup the service for the next business day (after the weekend) and my plumber seemed to think it was not particularly urgent.  My tenant thought otherwise, apparently, and found another plumber to come that night.  This was sprung on me via a phone call from the tenant to get the go-ahead for his plumber.  How the pump motor burned up is still a mystery.

Self managing remotely, yes.  I have a list of plumbers, etc., to call when I need someone.

Repairs paid by tenant and reimbursed?

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