Tenant Compensation and the Law
The question of tenant compensation arises almost entirely from landlord/tenant laws. As a property owner, you are in charge of securing that your rental house is in a habitable condition. In general, this indicates that your rental home is clean and livable. It also entails that your roof keeps the house dry and that the appliances and other elements work the way they do. When the property isn’t habitable for any reason, it can generate situations where a tenant may be compensated.
Reasons to Compensate a Tenant
Some of the most common reasons that a property owner may need to compensate a tenant include the following:
Repairs. One of the most typical causes a property owner would need to compensate a tenant is because of repairs. Situationally, a property owner may not be able to conduct necessary repairs immediately. 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 need to fix the issue. If you can’t, your tenant may be able to get the repairs completed within the confines of state law. It’s ideal if the tenant gets your permission first, but even if they don’t, the chances are that you’ll be required to reimburse your tenant for the cost of repairs if they follow the state requirements.
Broken appliances. Sometimes compensation comes up in discussions concerning the condition and functionality of appliances. Lack of desire to take responsibility for broken appliances is one of the most common reasons a property owner gets sued by their tenants. Some of this is because 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 busted oven or refrigerator is seen as a bigger concern, and tenants may argue that the home is uninhabitable. For illustration, you’ve provided appliances with the rental house. If one of them breaks and you can’t repair or replace it promptly, 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 true if your lease documents assign responsibility for the appliances to you as the property owner.
Cash for keys. At times, a property owner may need a tenant to vacate a property before the lease ends. In such cases, a landlord may offer to pay the tenant to move out. Property owners sometimes utilize this tactic 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.
While the most common, these are not the only reasons you may need to compensate a tenant. But if you find yourself in a situation where payment is needed, it is best to document everything thoroughly and then issue the funds as soon as possible. If you are pro-rating a rent payment, ensure that you record it and notify your tenant in writing. If you are demanded to send payment to your tenant directly, opt for 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 developing healthy tenant relations. As a Lancaster County property owner, you’ll need a full understanding of the landlord/tenant laws that govern compensation to guarantee that you are in full compliance. Real Property Management Regions can help you prepare a lease to cover these issues or even manage your property entirely. Contact us today to get started.