This is the second article in a series of three from Ownersite Technologies about ensuring the maintenance of a secondary property, including vacation homes and rental dwellings. The topics include maintenance tips, owners’ rights when renters do not take care of a property, and how to work with tenants to maintain a home and maximize its value.
When you are a homeowner of a vacation or long-term rental property, it may be difficult to know what you are responsible for in terms of maintenance and what should be handled by the tenant. Many times, there are heated battles over how responsibilities are balanced. The landlord believes that the tenant is obligated to take care of the home while the renter believes that part of their payment goes towards the landlord handling any maintenance issues.
Meanwhile, the grass needs a machete rather than a lawn mower; the paint is peeling off the sides of the house; the pool has turned green; and the kitchen sink is leaking. No one wins when there is no agreement on who should do what in terms of maintaining a rental property.
A Landlord’s Work is Never Done
While it might be nice to receive a check each month from a tenant and it covers your mortgage payment, there is so much more involved in being a landlord. If you have taken on this role, be prepared to fulfill a number of obligations related to local building, safety, fire, and health codes as well as general maintenance obligations. The Implied Warranty of Habitability states that a landlord promises that the property meets all standards for human habitation and is free of substantial defects. This means that you would be responsible for major repairs that result from a fire or flood.
Other responsibilities that lie squarely on your shoulders are to:
- Maintain the premises in a fit and habitable condition.
- Keep all electrical, plumbing, heating, and ventilation systems and fixtures in good working order.
- Ensure that all appliances and equipment supplied or required to be supplied are fully functional.
- Give at least 24 hours notice, unless it is an emergency, before entering the property and only do so at reasonable times and in a reasonable manner.
The Cost of Not Caring
There are costs involved in not sticking to one’s responsibilities. For instance, a tenant can legally withhold rent or deduct the cost of a repair from the rent. In many states, the tenant has a relatively new right called “Repair and Deduct.” These regulations allow a tenant to have the legal ability to withhold rent so that they can make repairs and deduct the amount from the rent.
This regulation can also be used as a means to gain a judicial abatement or reduction in rent as a result of decreased capacity to have a high quality of life while residing at this property. The tenant can also cancel their lease, or sue for the lost value. This does not mean that a tenant can just sue you for the wind changing direction. There has to be a realistic timeframe that you are allowed in order to maintain and repair the property.
Additionally, you may have some government or homeowners’ association maintenance requirements that you will need to fulfill. If you do not, you may lose the ability to allow someone to occupy the home and provide you with the substantial income that you rely on to pay the mortgage or receive as a return on your investment. That’s why it is so important to be a responsible landlord.
Your Tenant’s To-Do List
Likewise, your tenants have to deliver on certain expectations to ensure that your investment is not destroyed by careless renters. While you have to spend money to make money, you do not want to overhaul your investment every time a new tenant moves in.
As the home’s owner, you have the right to expect the following from your tenants:
- Maintain a safe and sanitary dwelling.
- Dispose of all trash.
- Keep toilets, sinks, bathtubs, and showers clean.
- Use all electrical and plumbing fixtures properly.
- Comply with housing, health, and safety codes.
- Do not purposely damage the premises and make any repairs necessary to restore the home back to that state it was at when you moved in.
- Maintain appliances supplied by the landlord.
- Be courteous to all neighbors.
- Permit landlord to enter the dwelling unit if the request is reasonable and proper notice is given.
While you are not expected to do that much as a landlord, the tenant does have an implied duty to make minor repairs. This means that if they break a window, they must replace it. If they stain the carpet, they must clean or replace it because this falls under the jurisdiction of wear and tear.
A Better Landlord and More Effective Business Owner
To ensure that you meet your expectations as a landlord – especially if you have a number of properties – it is best to keep a maintenance schedule or calendar of tasks so that certain projects are completed on a monthly, quarterly, and annual basis. If you are willing to go high-tech, this task can become so much easier because you can use your e-mail to receive maintenance reminders.
Services like Ownersite Technologies can offer an online repository to keep all types of information about your investment properties, including a maintenance schedule, an inventory of items kept in these homes, and information on each mortgage, property tax payment, insurance policy and more. You will be able to track tax deductions like mortgage interest, repairs considered ordinary and reasonable by the government, and the offset of depreciation on each property, including appliances that are left for your tenant to use.
This will help you be a better landlord and more effective business person. You will be able to have a current record of all your income and expenses. A well-maintained investment property will continue to generate a return for years, helping to pay off the mortgage or provide another source of income. It makes all the hard work of being landlord well worth it!
Be sure to read our other articles about what type of maintenance can best keep any secondary properties that you own in top condition and how you can work with your tenants to maintain the property that builds value for you while creating a better quality of life for them.