We take a look at when withholding rent is justified by a tenant and when can a landlord make a tenant pay for a repair.
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.
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:
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.
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:
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.”
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.
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.
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.
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.
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.
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.
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.
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