Can I make the tenants responsible for all maintenance on my rental units?
Question 1
Can I make the tenants responsible for all maintenance on my rental units?
Answer 1
Depending on the law of your particular state, the type of rental property, and/or the reason why a particular type of maintenance is needed you may be able to make the tenant responsible for all, for some, or for no maintenance expenses.
In many states the landlord is made responsible by statute and/or under habitability standards to bear the costs of most maintenance for residential rentals. There are limited exceptions to this basic statement.
First, most states allow the tenant to accept responsibility for maintenance in a single-family rental home.
Second, tenants can usually be held liable for the cost of repairs that are required because of their actions or negligence. However, there can be issues when the tenant is to blame for damage that would make the unit uninhabitable under federal, state, or local laws and the tenant is unwilling or claims to be financially unable to cover the cost. For example, refusal to repair a heating unit in winter or a water heater anytime even if the problem is the fault of the tenant could result in the landlord suffering significant penalties for not making the repair. At a minimum, a tenant may have the right to break the lease and move, potentially resulting in a significantly larger financial loss due to vacancy and rehab costs compared to the landlord simply paying for the repair.
Even when state law allows making the tenant responsible for repairs, it is prudent to significantly limit the items for which the tenant is responsible. The reason is that the pool potential of applicants will likely be greatly reduced in either size or quality, or most likely both when the tenant is at risk for large expenses. For example, if applicants know in advance that the lease will make them fully responsible for major items, such as heating/cooling systems or appliances or plumbing systems, it will almost certainly mean that the only applicants will be those who would likely simply walk away upon occurrence of a major problem. Those who could afford such costs might rather pay a fixed amount of higher rent for a better
rental.
Well qualified applicants would be foolish to sign a lease that could leave them liable for repair or replacement of major appliances, a furnace, or serious plumbing system problems when they would likely have no idea of the age and condition of such items at the time they sign the lease and would unlikely be interested in paying hundreds of dollars for a home inspection ahead of time. Failure to notify potential applicants about the extent of their maintenance responsibilities at the time when they obtain an application form can result in wasted time an effort because after completing screening of applicants and notifying the winner and all losers regarding your selection, the winning applicant may refuse to sign the lease,
requiring that the landlord start over trying to fill the vacancy.
Accordingly, when maintenance responsibilities can be transferred to tenants, both legally and practically, they should be limited to minor issues, preferably those which are very low cost and for which the tenants can handle the labor themselves. However, even then, it can sometimes create problems for the landlord.
For example, tenants are often made responsible for repairs costing up to $50 or $75. For example, sometimes the responsibility is limited to fixing leaky faucets. However, a tenant may be willing to live with a leaky faucet rather than spend the money and time to correct the problem and leaky faucets can result in damage to cabinets and/or flooring that will be expensive to correct. Trying to collect for the damages caused by the tenant’s failure to properly maintain will at least be difficult and might be impossible even after costly legal action.
The bottom line is that it is usually better for the landlord to retain responsibility for maintenance and charge higher rent.
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Question 2
I want to sell my rental house. It is currently occupied by 4 tenants with a 1 year lease ending about 6 months from now. What are the steps in notifying the tenants about the sale and showing of the home while occupied?
Answer 2
First, the existing lease agreement is valid and enforceable until its expiration date and the lease binds the buyer if sold before its expiration.
Second, most lease agreements and the laws of many states require tenants to cooperate with any agents of the owner including real estate agents, appraisers, contractors, etc. However, entry to the property must be preceded by the required advance notice. The minimum period is 24 to 48 hours in most states, but this would be overridden by any longer period specified in the lease or by any lesser period if state law allows tenants to waive a longer law requirement. However, the
entry time must be at reasonable hours. If a tenant refuses to cooperate, entry cannot be made and the only recourse would be to file a lawsuit.
Due to possible problems with access and the fact that the property may not show well when occupied by tenants, it is usually best to not try to sell a single-family property while leased.
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Question 3
I am a new landlord and the lease term for one of my rental units is nearing completion. Do I need to serve the tenant with a notice to quit the lease?
Answer 3
What you need to do to terminate the lease depends on the clauses in your lease agreement and, in a few states, the law. It can be of benefit that the lease agreement explicitly discusses end-of-lease issues. For example, the agreement may state that the tenant is expected to vacate the unit if an extension or renewal agreement has not been executed by the parties at least some number of days (typically 30) before the ending of the existing lease term. As another example, the agreement may state that the lease becomes a month-to-month lease if no action has been taken regarding an extension or renewal, the landlord has not given notice of termination, and the tenant holds over beyond the term end – often with an increased rent amount. This latter clause is almost always included in a lease agreement.
It never hurts to provide a termination notice prior to term end no matter what the lease requires when the landlord desires to have the tenant depart rather than renew or extend the lease. The tenant can be notified that you do not wish to extend his tenancy beyond the term of his existing lease by providing a written notice that clearly states that fact. No reason need be given and it is best to not give a reason that can in any way be considered a violation of fair housing laws. Such a notice can be given at any time prior to term end unless otherwise required by the lease agreement or law, but it should be long enough in advance for the tenant to make plans.