Under $50 tenant pays clause?

Question

I recently got my rental agreement officially reviewed by a RE lawyer (yay) and he suggested a clause he sees a lot is “repairs under $50 are responsible by the tenant” or a number similar to $50.

Who does this and what is your success/response from said clause? It sounds like a great idea in that it eliminates the need to answer every little repair request but also, minor cost items that can cause major damage (such as a leaky shut off valve) can then go unfixed by the tenant causing bigger issues in the long run! Others opinions are greatly appreciated!

Max T. · Answer

I don't do this for 2 reasons:

1. It creates an incentive for tenants to not report small maintenance problems (that can become big maintenance problems when not addressed quickly) and

2. I can't remember a time when I paid for a repair that was under $50. A service call costs me $75-95 per visit depending on the vendor.

Good maintenance of the properties is one of my personal points of pride. I want my tenants to know that I am a good, responsive landlord so they feel all warm and fuzzy paying me big bucks every month. Maintenance is not a hassle - it is part of the job, and landlords who can't be bothered by it make me look good.

Theresa Harris · Answer

It is your property and you are responsible for it.  If a tenant does the damage, they pay for it regardless; but other regular maintenance is your responsibility.

Steve K. · Answer

@Joseph Gisler sounds like a great way for a small leak to turn into major water damage if you ask me. I encourage my tenants to tell me when something needs fixing as soon as possible so it doesn’t become a bigger problem. I would never expect any of them to tell me or take of something if they may have to pay for any of it, because not many tenants are going to voluntarily pay to fix anything on somebody else’s property. They’ll be much more likely to ignore it and let it get worse until it’s more than a $50 issue. Much better long term to stay on top of maintenance and repairs as the property owner in my opinion. I don’t find most tenants to be overly needy so it’s not usually an issue but when it is that can be addressed with a simple conversation about what is an appropriate maintenance call (sewage backed up into basement, tree fell on neighbors car, fridge died, etc.) and what isn’t (light bulbs, roommate drama, saw a big spider, etc.).

Matt M. · Answer

@Joseph Gisler

Do you really want your tenants doing work in your rental? Like others have said, there’s nothing that’s $50 anymore..  but-

Say the toilet fill valve goes bad. $13, they youtube it, and next thing you know you’ve got water spraying all over and down to the floor below. Then what...

It’s a big no thanks for me

Joe Splitrock · Answer

@Joseph Gisler I have seen people talk about $50 or even $100 clause. I have also seen people refer to it as a deductible, so the tenant pays the first $50 towards any repair. Knowing how tenants think, I can see this lead to people not reporting problems. On the flip side it could get rid of nuisance calls. I usually trouble shoot pretty good over the phone or text, so I can work through those issues in a few minutes. I consider that part of my value as a landlord. If my attitude was "don't call me ever", those are the type of landlords people complain about.

As others mentioned, really nothing costs under $50 so it seems like an annoyance clause at best.

Something people forget is that one reason people rent is to avoid dealing with and paying for problems.

Alexander Kleyman · Answer

I've heard of the same "$50 clause" in leases of other investors but do not have it myself, may be I should. Nothing costs $50 anymore if a contractor repair is involved, so this is a just a "lightbulb clause" the way I see it. Don't bug me for a simple indoor/outdoor bulb - replace it yourself kinda thing.

Ben Scott · Answer

If my tenant is handy and knows what he/she is doing, I'll offer a slight discount in rent for taking care of the minor repair. The tenant will want it done the right way and has incentive to do it right away. But again, there has to be a relationship and trust there. Some tenants can't change a light bulb.

Christopher Smith · Answer

Its really up to you, it's a contractual relationship so you can arrange it as you see fit. As to what makes sense, you might ask some reputable property managers in your area how they address the issue.

My CA PM requests that tenants change light bulbs, batteries and filters (although he checks these items once a year himself on annual walkthroughs), but won't let them touch anything else. My OH PM is a more flexible and deals with these things tenant by tenant on an ad hoc basis.

Both methods have always operated efficiently so I let the PMs proceed accordingly.

Under $50 tenant pays clause?

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