As an owner of, or investor in, rental properties, you probably know that the biggest expense over the long term is repairs. Aging systems, typical wear and tear, general upkeep, and tenant neglect or misuse are the most common causes. Not surprisingly, the prudent investor will look for ways to save money – sometimes cutting corners either by doing the work themselves, or by hiring a handyman who may not be proficient in the repair methods required.

But there’s another way some owners may choose to save money: by accepting a tenant’s offer to perform the repair. It’s not that unusual for a tenant to offer to perform repairs on the property they are renting. And while it may seem like a good idea at the time, it can lead to many problems later.

While there are tenants who are most certainly honest and most likely capable, there are many reasons to decline these offers, starting with questioning the motive. If this offer is made as early as during the application process, the prospective tenant may be using this offer as an enticement in the hopes that a substandard application will be overlooked. I’m sure I don’t need to tell you why this is a red flag, but chances are once they take possession of the property, you will have very little ability to enforce the offer or verify that the repairs have been done at all, and you will have a less deserving and possibly problematic tenant on your hands.

Some tenants use the offer of performing repairs as a possible way to reduce the rent. It could be an indication of financial struggles down the road. But more importantly, agreeing to reduce the rent in exchange for repairs could lead to a lot of mysterious and unexplainable breakdowns in appliances, plumbing, HVAC, or other items in the home. That, in turn, can amount to far more expenses than normal, and you are the loser in that scenario.

But probably the most common reason for making this offer is to avoid having someone come inside the home. That doesn’t always mean something nefarious. It might be because, in the time of COVID19, they want to avoid external contact, or because they are very private and nervous about strangers checking out their belongings. But it might be because they have not kept the home in good order, or they are doing something illegal.

The easiest way to approach tenant repairs is to treat it entirely as a business matter, not a personal or emotional one. The questions to ask are:

1. Will this really save money?
2. Will this create a landlord/tenant issue?
3. Will this create any liability?
4. Does the tenant have the proper skill to do this work?

At first, it may seem that the landlord is getting the best of the bargain. The tenant does the work for perhaps only the cost of the materials. If they are capable, this could work out for the owner’s benefit. But what if tenant does not know how to do the repair properly? Now you might find yourself with other issues, and none of them are positive.

Here’s a Scenario:

A well-meaning tenant offers to replace a broken shower head for a one-month rent reduction. The property owner agrees to pay for materials and reduce the rent. The job is either incomplete or causes a subsequent problem. Now, to complicate matters, more money is required to hire a competent tradesman because the tenant has caused more damage, even if unintentionally.

Will this now lead to a landlord/tenant issue? The repair has gone sour, more repairs are necessary, the owner feels the tenant should reimburse for the damage, and a bad owner/tenant relationship develops.

Soon after, the tenant moves out, the owner deducts the damages from the security deposit, and the tenant then sues the owner.

Perhaps a liability has occurred. The tenant is now claiming pain and injury suffered while doing the repair. The owner has paid a non-licensed person to perform work and the court looks very dimly on the situation. The insurance company is now involved and the policy may not cover this issue.

Perhaps this entire scenario sounds unlikely but, as a Property Manager, I know this can happen. I hear it from self-managed owners, from industry peers, and from news articles. I know that trying to save a few dollars can often cost the property owner more money, and a great deal more stress.

Bottom line: when it comes to tenant’s performing repairs, tread lightly. If you choose to go that route, make sure you both understand what the expectations are. And I would recommend that, rather than deduct from the rent, you always take the full rent payment and pay the tenant separately with a check so that there is a paper trail for later reporting.

At Front Porch Property Management, we “Protect Your Investment” by providing reasonable repair costs through competent vendors who are licensed and insured. We work to develop relationships with trusted and reliable contractors who know we will be honest about the scope of the work and pay them on-time when the work is completed.

Let us help you with your rental property.