When do you give rent credit to tenant?

Question

Hi,

I was curious when any of you as landlord have given credit on rent to tenants? Would a situation where an appliance fails and repairs take too long (even though you acted asap to get it repaired) warrant a credit? Would inconvenience to the tenant in any way warrant one?

I'm not a fan of it unless it was something the landlord just sat on and didn't deal with it in reasonably quick time. But was interested to know when you might have given one.

thanks!

James

Nathan Gesner · Answer

With thousands of tenants over the years, I can't recall a time that we credited rent back to the tenant. We have put tenants up in a hotel or vacation rental for a few nights due to a fire or flood, but we didn't refund their rent. It would have to be a pretty egregious issue before I would even consider it.

When an appliance breaks in my home, I have to live without that appliance. Same goes for my tenants. And what is the value of an appliance in the big scheme of things? For a $2,000 rental, daily prorated rent is $66. If the refrigerator stops working, that's maybe 5% of the value of the home (on the high end) or $3.30 per day. Why would a Landlord give them a day of free rent for a bad appliance when the other 95% of the rental is fully functional?

Garrett Swan · Answer

Per my leases, there is no mention on given credit to tenants ever simply becuase i do not want them to start taking on home improvement projects by themselves or with others. In my experience, most general issues such as plumbing, HVAC, electrical can be solved within an hour or at the very latest by the end of the day. If an appliance fails or repairs take to long, unfornately in my opinion it is what it is, if need be i could go to lowes and pick up a new appliance if it came to it. I try to be firm but fair with all my tenants. Hope this helps

Best,

Garrett

John Underwood · Answer

I Have never done this. It sets a bad precedent.

I have put a tenant in a hotel for a couple nights before, but not credit.

Would I? Maybe for the right situation like the mentioned emergency toilet repair.

James Kim · Answer

Thanks Brian. In the end I found out providing hot water to tenants was a bigger issue and required so I gave a gift card. I didn't want to credit rent in any way to impact the income side of the investment. The builder is replacing the water heater after two attempts to fix it and hopefully that's the end of it. Was a learning experience to hear everyone's story and also learn hot water is treated as more of an emergency than other general issues.

thanks for your feedback!

James

Brian Ellis · Answer

I have given rent credit twice to one tenants.

First is when he replaced a leaky toilet on a whim. Gave him money for the cost of the toilet, and a little extra on top. I only allowed this because I was out of town and it was crucial repair. The second time was when he brought me a highly qualified tenant for the unit next door. I offered him $150 off his rent for the following month. Normally I wouldn’t give credits, and I haven’t to anyone else. But some tenants are really good, take care of the property, and are worth the investment.

Bud Gaffney · Answer

Nathan, nail on the head. Never ever ever ever give credit or refund. Be a good landlord and fix repairs.

Bud Gaffney · Answer

It simply sets the wrong precedent, and they will be looking for more ways to get rent reductions in the future. Don't do it.

Brian Ellis · Answer

Who installed it? if its brand new then there should be some sort of refund or repair by the installer. As mentioned above it would have been necessary to put them in a hotel for a few days. And even now it would make sense, I would assume your state requires you provide hot water.

I cant give advice in regards to your situation and a credit to the tenant. Every situation is different. From my experience, im a little more relaxed and have provided credit for that one minor incident that prevented the place from having water damage. I would do everything I could to get the water heater up and running within a day or two, which would prevent this type of situation where a credit is even considered.

James Kim · Answer

Hi everyone, really appreciate the feedback. My specific issue is the water heater not working (brand new) and after attempting to fix it twice its getting replaced but it's been about a week of inconvenience to the tenant without hot water. What would you do in this situation? Would a credit act as a good token for the tenant/landlord relationship?

note: tenant did not ask for a credit.

When do you give rent credit to tenant?

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