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Landlord-Tenant Law

When Is A Tenant Justified In Withholding Rent?

Laws regarding withholding rent vary from state to state; however, in major states like California, New York, and Texas, it can be permissible under certain circumstances. Although there are many reasons a tenant might want to withhold rent, they will usually stem from a disagreement between tenant and landlord. 

It’s the responsibility of a landlord to provide a livable unit. This article outlines when a tenant is justified in withholding rent and discusses whether it is up to the landlord or tenant to solve the problem.

Withholding Rent When a Landlord Ignores A Necessary Repair

As a rule of thumb, a tenant not paying rent is a breach of contract and an evictionable offence. However, there are circumstances regarding damage to the property that may exempt the tenant from penalty. 

If the damage was not the tenant’s fault and is impacting the liveable nature of the unit, they may be entitled to withhold the rent. A few reasons to withhold rent include when the property is in an uninhabitable condition. For example, if there are: 

  • Rats in the unit
  • Broken locks on the doors
  • Leaking pipes/ceilings
  • Loose electrical wiring
  • No hot water

Under conditions like these a landlord cannot make a tenant pay for the repairs, instead, it falls upon the landlord to repair the property to a habitable condition as quickly as possible. Not doing so could find them in breach of the law as landlords are legally required to ensure their rental property is habitable.

witholding rent for repairs

What Can a Tenant Do if the Landlord Refuses to Repair Damage

If a property is uninhabitable tenants have a few options they can take in the event the landlord ignores the damages or refuses to get them repaired:

1.Repair and Deduct

Legal advisors will likely ask a tenant not to withhold rent as it may break their end of the agreement – especially in states where withholding is illegal. Common in these states is the method of “repair-and-deduct.” 

For example, in California, according to the Department of Consumer Affairs, “A tenant may deduct up to one month’s rent to pay for repair or defects in the rental unit. However, the tenant may only apply this remedy to a severe condition that affects the implied warranty of habitability.”

2. Calling State or Local Building House Inspectors

A tenant also has the right to call their state or local building health inspector. Failing this inspection will lead to legal consequences for the landlord.

3. Paying Rent into an Escrow Account

At a local District Court, a tenant has the right to pay their rent into an escrow account. This method cannot be done on a whim, however. The tenant must give sufficient notice to the landlord as they need time to make the repairs before placing the rent in escrow. 

A tenant may not deposit money in escrow for aesthetic or cosmetic changes. The only deposits made are for damages impacting the tenant’s life, health, or safety. 

Can a Landlord Make a Tenant Pay for Repairs if the Tenant Causes the Damages?  

When can a landlord make a tenant pay for repairs? It depends. 

Firstly, a landlord is entirely within their rights to deny a repair request if the damage was due to the tenant. So, for example, if the tenant busted a hole in the wall from aggressively opening the door – the tenant is liable for damages. 

Next, a tenant should be aware that a landlord is only obliged to provide a habitable home. As mentioned above, cosmetic touch-ups and changes are not deemed a necessity by most laws. If a tenant is dissatisfied with something, they are free to discuss the best course of action with the landlord amicably.

Finally, it’s always beneficial to have a walk-through of the apartment with the tenant before a tenancy begins and at the end. This way, both landlord and tenant will have a mental picture of what was there before the move-in. Any doubts about damage or repairs can be queried and noted then and there.

It is generally considered best practice for the landlord to organize any necessary repairs themselves using a trusted contractor, even if the tenant is responsible for paying for it. The property is your investment and it’s in your best interest to keep it maintained to a high standard to ensure maintenance issues don’t escalate and so that it remains attractive to prospective renters.

Allowing tenants to manage repairs often leads to them sourcing the cheapest possible options. This can lead to poor workmanship that can be expensive to redo later on. Using Landlord Studio you can easily record and track the tenant payable expense and send invoices to your tenants to pass on the expense.

Can a Landlord Make a Tenant Pay for Repairs?

As mentioned above, landlords are obliged to fulfil their maintenance obligations as outlined in state landlord-tenant laws. Furthermore, landlords and tenants may have reached a private agreement in which other “maintenance” responsibilities are the tenants, e.g., mowing the lawn or cleaning the gutters. These responsibilities should be detailed in the lease agreement to avoid potential legal issues down the line.

If the tenant neglects to carry out jobs detailed in the lease and damage occurs, the tenant may be required to pay for the repairs. Conversely, tenants will be tasked with minor maintenance such as changing the lightbulb or switching out batteries in smoke detectors. Any feature of the unit that the tenant uses will need to be maintained by them. 

For example, if Jordan has neglected to clean the stovetop of grease and the grease has subsequently led to the stove breaking – he is liable for the repair. Or if Sally left the tap running in the sink and the water overflowed, damaging the ceiling of the apartment below her, she would be liable for that repair. 

However, if Jordan kept the stove in good working condition but it stopped working due to regular wear and tear, the landlord would be liable for that repair. Or if the washer in the tap broke meaning Sally couldn’t turn the tap off which led to water damage, this again would be the landlord’s responsibility. 

It can sometimes become difficult to see who is responsible for what repairs. As such, it’s always a good idea for landlords to stay on top of maintenance issues with regular property inspections and to organize repairs with trusted contractors promptly. Allowing issues to degrade because you’re not sure who is responsible for a repair could lead to a much greater expense or potentially even a lawsuit. Plus, the cost of most repairs will be tax-deductible – so even if you can’t reclaim the cost from your tenant you will be able to reclaim some of it at the end of the tax year.

What Can a Landlord Do or Not Do If a Tenant Withholds Rent? 

If a property is deemed uninhabitable by a court a landlord cannot get all the rent money owed until the local housing authorities or court certify the dwelling as liveable.  

Generally, the court will withhold the rent for the tenant in escrow, the landlord can ask for portions of rent to be released – thus paying for repairs. While the repairs are underway, there are usually two methods a tenant may withhold rent:

Once the repairs are completed the courts will deposit the remaining funds to the landlord, minus the inspection fees and court costs. 

How Does a Landlord Get Withheld Rent Back Without Court Involvement?

When escrow is not necessary, arrangements between landlord and tenant will dictate how the money is distributed. The most likely outcome of the tenant withholding the rent will lead to the landlord making the repairs. 

Once the repairs have been made, you’re entitled to the full payment of the withheld rent. If the tenant still doesn’t pay back, the landlord is entirely within their right to file an eviction lawsuit. 

Final Words

In conclusion, the ability for a tenant to withhold rent depends on circumstances and state laws. One of the critical determinants of a successful agreement between landlord and tenant is communication. 

Outlining the responsibilities of each party in the lease agreement will ensure an understanding is reached as to who looks after what. Likewise, if a conflict regarding repairs arises and the case goes to court, the landlord must follow the correct repairing procedures to claim withheld rent and avoid fines from housing authorities. 


Investment Strategy

9 Vacation Rental Property Upgrades to Keep Renters Coming Back

Keeping your vacation rental property clean and well-maintained is one of the best ways to boost your bookings. However, you also must carry out home improvement projects and updates regularly to make them more appealing.

According to research, vacation rental owners who carry out regular updates will see a marked increase in the booking rates as well as positive reviews. These keep renters coming back and your income will increase. The updates don’t have to cost a lot of money. There are simple and budget-friendly updates you can comfortably carry out on your own that will be a turning point when it comes to your booking rates and income. They include:

1)  Cleanliness

There isn’t an excuse for not cleaning up a vacation rental property. No one will ever book your property if it is dirty. Even if you have a high guest turnover you need to prioritize cleaning the property in-between. It is better to lose revenue for a day or two while having the property cleaned than to book guests only for them to find the place dirty. If you are not able to clean the property on your own you can hire a professional cleaning crew (which is more common). One of the best ways to ensure bad reviews and hurt business is a dirty property.

Additionally, the property shouldn’t be used as a storage unit even when there are no guests. The decor and furniture in the rental property should always look fresh if you expect the guests to give a high rating. Keep up with interior decor trends to win over guests. Modern homes featuring minimalistic designs and open floor plans are preferred at the moment.

2)  Optimize sleeping spaces

Don’t just focus on the master bedroom when optimizing the sleeping spaces. All sleeping spaces should be optimized. However, this should be done without compromising on aesthetics. A pull-out couch, trundle beds, or bunk beds are great options to maximize revenue and offer more options for your guests.

Heads in beds is where you make money. By increasing the number of guests that you can host at any one time you can maximize your revenue for your rental property. However, don’t be so money-minded that you cramp the spaces because this can reduce the appeal.

3)  Update the bathrooms

Renovation Ideas

This is the one room everyone will be using daily hence the need to spruce it up. The ultimate relaxation in the bathroom can only happen if this space is inviting and aesthetically pleasing. A glass of wine, candles, and bubble baths will convince anyone to stay in. Also, adding nice personal touches such as complimentary robes and fluffy white towels for the guests to offer the ultimate comfort and luxury. The investment will be worth it!

4)  Smart home technology

Technological advancements are always a great experience, especially if they make life easier. Thus, if you can install smart home technology you ought to do it. Automated features and a smart home security system shouldn’t be a debate. Automated front doors that use a code as opposed to a key are a better choice because the codes can be changed after every guest group vacates the property. It also saves you from the frustration of a lock-out fiasco or a missing key and it is also more convenient for guests who arrive late.

5)  Free WiFi

A lot of people have to call home or reply to work emails even when they are on vacation. Besides that, many things have to be done online now ranging from essential things like making calls and booking flights to fun things like streaming music and checking social media accounts. It is inconvenient figuring out how to register for an internet plan in a foreign country not to mention how expensive this can be.

Free WiFi should now be a norm in every vacation rental property all over the world. Make it password-free or set an easy-to-remember password. This may not seem like a big deal but it is an important consideration when it comes to vacation rental booking preferences.

6)  Curb appeal

Beauty is one of the major things travelers consider when booking vacation rental properties. Therefore, the better the curb appeal the more the bookings you will get. You should make your rental property attractive from the outside as well as the inside.

People will be coming there to escape their reality and bland decor will not do. It has to be something so unique they cannot get on in their everyday life. It’s all in the simple things like decluttering the entryway, painting the house exterior, landscaping, and cleaning the house.

Everything that makes the house look beautiful should be done. If there is an outdoor living space you should decorate it with beautiful furniture that invites people to spend time there. The idea is to transport your guests to a place of relaxation where they forget their everyday struggles and indulge. A great property might even convince them to stay for longer which is a win for you.

7)  Heated floors

Heated floors in the kitchen and bathroom are essential during the cold mornings or nights. The cost of installing heated floors will depend on the current flooring, size of the room, the preferred radiant heating, etc. It is an investment that will pay off eventually and the best part is that you won’t have to re-do the flooring.

Radiant heating works on many kinds of flooring. A lot of vacation property rentals don’t have heated floors hence making this addition will be a great selling point for your property, especially during the cold season.

8)  Upgraded amenities

For guests staying for a week or more, eating out daily can get expensive, hence the need to have a functional kitchen with high-quality appliances, cutlery, and pots and pans. You don’t have to buy new appliances if the ones you have are working fine. 

Also, long-term guests will not always have activities planned daily. That’s why the property should be well equipped with amenities that allow for fun when they stay in.  Stock the property with family-friendly games. Have a closet with frisbees, footballs, a corn hole set, and more. Ensure there are amenities to suit guests with different needs to ensure everyone has a great experience in your property.

Renovation Ideas

9)  A hot tub

Whether it is the cold or hot season, people rarely turn down an opportunity to relax in a hot tub. These tubs can be inside, but they are normally placed in the backyard where guests can enjoy great views from the tub. If you don’t have enough space you can have a standard bathtub upgraded into a jet tub. However, you need to provide guests with printed signage on tub rules, troubleshooting, and spa operation to ensure the tub doesn’t end up damaged.

Final thoughts

Whether it is a big or small upgrade you have made, rest assured it will be a win for you in terms of bookings. After carrying out the updates you shouldn’t forget to take new photos and update your listing profile as well as property descriptions. Emphasize the upgrades you have made in writing as well as through the photos you add.

One of the most important things to remember is to continue putting money back into your vacation rental property.  If you don’t continue doing small and large upgrades you may find your gross annual rental income and ROI decrease over time instead of increasing. 

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