In general, tenants are the ones paying for the right to live in your rental property. However, there are cases when a Valencia property manager may seek or be required to compensate a tenant. When specific problems occur, you may find yourself in the uncommon situation of paying your tenants instead of the other way around. To be as prepared as possible, it is essential to understand what circumstances may result in tenant compensation and when and where you should offer it.
Tenant Compensation and the Law
The question of tenant compensation is almost defined solely by landlord/tenant laws. As a property owner, you are obligated to ensure that your rental house is in a habitable condition. This generally indicates that your rental home is clean and livable. It also ensures that your roof keeps the house dry and that the appliances and other elements work appropriately. When the property is unhabitable for whatever reason, that can result in 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 frequent causes a property owner would need to compensate a tenant is because of repairs. In certain circumstances, a property owner may be unable to perform immediate repairs. 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 must resolve it. If you are unable to make the necessary repairs, your tenant may do so within the confines of state law. It’s preferable if the tenant has your permission beforehand, but even if they don’t, there’s a good likelihood that you’ll need to reimburse your tenant for the cost of repairs if they follow the state requirements.
Broken appliances. Sometimes compensation comes up in arguments about the condition and functionality of appliances. Failing to take responsibility for broken appliances is one of the most common reasons a property owner gets sued by their tenants. Part of this is because the situation 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 seen as a significant issue, and tenants may argue that the home is uninhabitable. Assume you have provided appliances with the rental house. If one of them breaks down, and you can’t repair or replace it immediately, 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 especially true if your lease documents assign responsibility for the appliances to you as the property owner.
Cash for keys. On occasion, a property owner may require a tenant to vacate a property before the lease ends. In such situations, a landlord may propose to pay the tenant to move out. Property owners sometimes adopt this method 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, planning to pay them to move may save you money in the long run.
However, these are not the only reasons you may be required to compensate a tenant. Nonetheless, if you find yourself in a condition where payment is needed, it is advisable to document everything wisely and issue the funds on time. If you are pro-rating a rent payment, remember to record it and notify your tenant in writing. If you require to send payment to your tenant directly, utilize a method that gives 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 keeping healthy tenant relations. As a Valencia property owner, you’ll need a comprehensive understanding of the landlord/tenant laws that regulate compensation to ensure that you are in full compliance. Real Property Management Traditions can help you prepare a lease to cover these issues or even manage your property entirely. Contact us today to proceed.
Originally published on October 9, 2020
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