In general, tenants are in charge of paying for the right to live in your rental property. But there are circumstances when an Orford property manager may wish or be mandated to compensate a tenant. When certain incidents occur, you may find yourself in the unusual position of paying your tenants instead of the other way around. To be as prepared as possible, it is helpful to understand what circumstances may necessitate tenant compensation and when and where you should offer it.
Tenant Compensation and the Law
The question of tenant compensation appears almost entirely from landlord/tenant laws. As a property owner, it’s your responsibility to guarantee that your rental house is in a habitable condition. This typically signifies that your rental home is clean and livable. It also implies that your roof keeps the house dry and that the appliances and other elements work normally. When the property isn’t habitable, for whatever reason, it can result in instances where a tenant may be compensated.
Reasons to Compensate a Tenant
A few of the most typical reasons that a property owner may need to compensate a tenant include the following:
Repairs. One of the most common reasons a property owner would need to compensate a tenant is because of repairs. Occasionally, a property owner may not be capable of performing repairs right away. Whether you are out of town or otherwise unavailable, if something breaks and causes your tenants to lose the quiet enjoyment of the rental house, you should resolve it. If you can’t, your tenant may have the repairs undertaken within the confines of state law. It’s preferable if the tenant gets your permission first, but even if they don’t, you will very certainly be required to reimburse your tenant for the cost of repairs if they follow the state requirements.
Broken appliances. Sometimes compensation comes up in arguments concerning the condition and functionality of appliances. Refusing to accept responsibility for broken appliances is one of the most typical reasons a property owner gets sued by their tenants. One explanation for this is that the problem is more complex than it first appears. Landlords sometimes argue that a broken dishwasher, while inconvenient, does not make the entire property uninhabitable. At the same time, a broken oven or refrigerator is considered a serious issue, and tenants may argue that the home is uninhabitable. For example, you have provided appliances with the rental house. If one of them malfunctions, and you can’t repair or replace it instantly, your tenant may be justified in repairing the machine and deducting the amount from the rent, as prescribed in your state’s landlord/tenant law. This is particularly the case if your lease documents assign responsibility for the appliances to you as the property owner.
Cash for keys. In other instances, a property owner may need a tenant to vacate a property before the lease ends. In such cases, a landlord may propose to pay the tenant to move out. Property owners sometimes employ this strategy to avoid a drawn-out eviction process and encourage a problematic tenant to move on sooner than later. Considering how long it takes to evict a tenant and that you probably won’t be collecting rent during eviction proceedings, offering to pay them to move may save you money in the long run.
Even though these are the most common, these are not the only reasons you may have to compensate a tenant. Yet, if you find yourself in a position where payment is essential, it is critical that you carefully document everything and issue the funds straightaway. If you are pro-rating a rent payment, remember to record it and notify your tenant in writing. If you must send payment to your tenant directly, pick a method that delivers a paper trail, such as a business check.
While landlord/tenant laws vary from place to place, staying on top of tenant compensation is important in sustaining good tenant relations. As an Orford property owner, you’ll need a strong understanding of the landlord/tenant laws that control compensation to safeguard that you are in full compliance. Real Property Management Beacon can help you prepare a lease to cover these issues or even manage your property entirely. Contact us today to get more information.
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