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Rent it Right

by Janet Portman, Inman News

landlord helpQ: We’re renting a farmhouse from an owner who lives out of state and who inherited the property from an uncle. The owner is not familiar with the property but acknowledged that it needed some fixing up before it was ready for occupation. I’m a contractor by trade, so I offered to do it, and the owner said OK.

He gave us two months’ free rent in exchange for my hours of work and materials. But the cost to do all that was necessary was more than that amount by about $500. Does the landlord have to pay the extra? –Janice J.

A: It’s a shame that you and the owner didn’t anticipate this at the start. In fact, you should have anticipated the opposite result, too — that the cost to do the work might be less than two months’ rent. In that event, the question would be whether the owner could fairly expect you to pay something for those first couple of months.

The key to answering your question lies, first, in the type of work you did on the house. You say it needed “fixing up” before occupation, but you don’t say what had to be done. In every state but Arkansas, it’s the landlord’s responsibility to make the property fit for occupancy (and pay for the repairs necessary to make it habitable).

If the house was uninhabitable before you did the work — with nonfunctional plumbing, a leaky roof or serious structural problems, for example — then the landlord is legally on the hook for the repairs.

Next, we need to know how the two of you arrived at your payment plan. If the owner estimated that the work could be done for two months’ rent, then you could reasonably ask him to pay more when that sum proved inadequate. On the other hand, if you gave a bid for doing all the work necessary to make the home livable but you underestimated the cost, you could fairly be expected to cover the overrun.

What if the work you did was not required to make the home fit for occupation — perhaps you remodeled the kitchen or refinished the floors but the original structure would have passed the “fit and habitable” legal test? In this event, the only question is how you and the owner structured the deal.

Again, if the owner misjudged the cost of the agreed-upon repairs, perhaps he should bear the consequences of his poor planning. But if you bid on the job and just underestimated how long it would take or how much it would cost, you are out of luck.

Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of “Every Landlord’s Legal Guide” and “Every Tenant’s Legal Guide.” She can be reached at [email protected] Copyright 2010 Janet Portman

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  • Michelle Tidmore

    This is the same as a work order/contract, you must put in writing, what needs to be repaired and have his signature showing he agrees to pay your rent in lieu of money for x amount of work done, i.e.: you bid the job will take 37 hours give or take a few hours, figure what the prevailing wage would be and if you are QUALIFIED to do the work at that wage, agree to be paid an hourly wage, or agree to be paid by the project. If materials are needed and you do not have the money to buy them, he should provide those for you. If he cannot do so, any money you have to shell out of pocket, should be reimbursed by the landlord at first opportunity, or taken of sequentially into the NEXT months rent, until it is paid off.
    Do not short suit yourself, if you know how to bid on a job, then be reasonable about it, but if it takes twice as long as you estimated, stop at the point where you are caught up, and let the landlord know, you have worked the contract worth to the point where you are. Yes depending on your verbal or written contract for the repairs, he either has to pay you back for the materials to do the job, or extend the worth onto the next months rent until you are caught up.

  • Abdul

    Janet every time you lay out the ins and outs of a deal gone wrong it makes me really want to know when are you going to publish a book on being the successful landlord that all landlords want to be? You could make a lot of money helping people who need a reference guide as to how to make their properties profitable. Keep doing what you are doing, don’t stop helping us, however if you did publish a book it might be the best selling book on what to do , but more important what not to do to be a good landlord. Just an idea from someone who respects your knowledge and always learns a lot from your insight.

  • Archie Stulc, Jr.

    As someone who has been on both sides of this particular situation, I have more than a bit of non-theoretical advice to offer.

    As the previous answers state, basically, it pretty much comes down to the actual agreement that you and the property owner had. Was it pretty much a time and materials job, or did you bid it? How much is the monthly rent, and what pecentage is the $500 in question? Is that $500 in labor, or is it mostly in materials?

    Even if you bid the job, it would be reasonable, on both sides, for the owner to pay for the materials. That is as long as the extra materials were necessary, as you said, to make the place habitable. If it were a time and materials bid, you are definately due the extra $500, again, as long as the work was just to make the house habitable.

    As I’ve said, I’ve been on both sides of this equation. I’ve been the renter that has made repairs with the OK of the owner, as well as a Property Manager allowing a trade out of rent for the labor. I have always, in either case, made the work that is to be done and the materials needed as clear as possible. Preferably in writing. I have even gone as far as writing up a contract for the work to be done and attached that to the lease.

    Now lets get down to some practical matters. Unless you are paying several thousand a month, I’m going to assume that the $500 would be a significant portion of a month’s rent. As you stated, you have a landlord that is quite a distance away and who has little, if any, interest in overseeing the property first hand. What it sounds like to me is that the property owner just wants to get the place rented and bring in some cash, with little, if any, effort on their part. With this in mind, I would tend to believe that if you discussed the issue with him calmly, factually, and in a timely manner, there should be no problem coming to some agreement on the $500 in question.

    Also, might I suggest, that since he is at some distance from the property, that you come to some kind of a written agreement on basic property upkeep and/or improvements. This has worked well for me in the past, as long as there are clear and open lines of communication between all parties invovled.

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