Being a landlord is not an easy task these days. It seems that we are being attacked from all directions. Politicians, tenant advocacy groups, and the courts all want their pound of flesh. But sometimes the biggest trouble comes from our own stupidity. In this case, we are talking about having your tenants conduct major repairs on your property. In my experience, there is little that can complicate your relationship (or your life) more that having your tenants conduct repairs or cleaning in exchange for rent or deposit. Often landlords are tempted into a “deal” with a tenant that looks to be good for the tenant and good for the landlord. The reality is that the law does allow for tenants to work in exchange for rent without being considered an employee with some restrictions, but the “deal” is loaded with danger. Here are the main objections-
- Tenants are notorious for over underestimating the job that needs to be done.
- Tenants usually are under-skilled for the task.
- Tenants usually do not have the proper tools for the job.
- Tenants over value their worth by demanding credit for close to contractor rates while getting a lot less done at sub-par quality.
- Tenants almost always feel that they were not compensated properly for the job, and are owed a bit of leniency.
This all adds up to a disaster. For example, your tenant does a terrible job of painting the living room by getting paint on the carpet and all over the expensive stained trim or tries to repair the leak in the roof or tells you their brother is an electrician and they can install the new fixtures for you. You promised a credit towards their rent and the tenant thinks they did a great job. At this point, you are in the situation of trying to get the tenant to correct the job and wishing you had just hired a professional or did the work yourself.
Little jobs like tightening screws, maybe touch up painting, regular landscaping, and regular cleaning are good and expected. Much more than this, and you are asking for trouble. Really it is not a matter of if, but only a matter of when the trouble will start. Best practice is to keep it simple by eliminating as much gray area in your business relationship with your tenants as possible. So rent your property only when it is neat and pretty, and then be diligent in keeping your end of the agreement by keeping the property in good condition.
As The Duke would say, “Life is hard. It’s even harder if you’re stupid.” So be smart, and do not let your tenants conduct their own major repairs.
This article was published in the Rental Owners Association monthly magazine.