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When You Should Compensate Your Tenants

In most cases, tenants are accountable for paying for the right to live in your rental property. However, there are occasions when a San Antonio property manager may wish or be obligated to compensate a tenant. When certain issues arise, you may find yourself in the unusual situation of paying your tenants instead of the other way around. To be as prepared as possible, you must know 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 entirely rooted in landlord/tenant laws. As a property owner, you should ensure that your rental house is in a habitable condition. This usually signifies that your rental home is clean and livable. It also indicates that your roof keeps the house dry and that the appliances and other elements work normally. When the property isn’t habitable, for whatever reason, it can result in situations where a tenant may be compensated.

Reasons to Compensate a Tenant

Some of the most typical reasons that a property owner may need to compensate a tenant include the following:

Repairs. One of the most leading reasons a property owner would need to compensate a tenant is because of repairs. A property owner may be unable to conduct urgent repairs under certain scenarios. 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, it’s your job to fix it. If you can’t, your tenant may have the repairs done within the confines of state law. It’s great if the tenant obtains your permission beforehand, but even if they don’t, you will likely be required to reimburse your tenant for the cost of repairs if they follow the state requirements.

Broken appliances. Sometimes compensation leads to disagreements about the condition and functionality of appliances. Refusing to take responsibility for broken appliances is one of the most common reasons a property owner gets sued by their tenants. A contributing factor to this is that the issue 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 malfunctioning oven or refrigerator is regarded as a bigger issue, and tenants may argue that the home is uninhabitable. Let’s assume you have provided appliances with the rental house. If one of them breaks down, and you can’t repair or replace it as soon as possible, 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 certainly relevant if your lease documents assign responsibility for the appliances to you as the property owner.

Cash for keys. At times, a property owner may need a tenant to vacate a property before the lease ends. In other cases, a landlord may offer to pay the tenant to move out. Property owners sometimes employ this strategy 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, offering to pay them to move may save you money in the long run.

While the most typical, these are not the only reasons you may need to compensate a tenant. But if you ever find yourself in a position where payment is needed, it is important to document everything thoroughly and then issue the funds quickly. If you are pro-rating a rent payment, remember to record it and notify your tenant in writing. If you are required to send payment to your tenant directly, select a method that provides 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 great tenant relations. As a San Antonio property owner, you’ll need a strong understanding of the landlord/tenant laws that regulate compensation to guarantee that you are in full compliance. Real Property Management Lonestar can help you prepare a lease to cover these issues or even manage your property entirely. Contact us today to get started.

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