Have you ever been in a situation where your tenant withholds the monthly rent – or threatens to withhold the rent? There are only a few situations where this is legal, and depending on your local laws, your tenant will have to follow a strict set of legal rules and requirements to withhold the rent.
Your tenant can’t withhold rent because he is angry, because he is out of money or because he simply wants to. In states that allow rent withholding, there are rules in place that outline exactly when a tenant can withhold rent. What does “withholding” actually mean? Your tenant can’t simply stop paying rent; depending on where you live, there is a process that must be followed.
In many states, your tenant will have to deposit the rent with your local court. This ensures that tenants are not simply avoiding paying the rent to save money, not because of an actual problem with the rental property. If your tenant has simply stopped paying, it is essential that you review both your lease and your state law to see what is required of both parties when there rent is withheld. While every state is different, the following rules apply to rent withholding:
- There must be damage to the home or apartment that impacts the enjoyment and use of the home. Your tenants have the right to safe housing. To withhold rent, there must be significant damage or problems that are not subjective; the hazard would have to be obvious to an objective third party like a building inspector.
- Your tenant can’t have caused the damage himself. Even in areas that allow your tenant to withhold rent because of needed repairs, the damage can’t have been caused by the tenant himself. If your tenant has bred several generations of rats – and those rats then infest the attic, the tenant can’t withhold rent until you provide an exterminator. The damage also can’t be caused by a member of the tenant’s own household or a guest of the tenant; you can’t be held liable for their actions and the damage they cause.
- Written notice in advance is required: Your tenant should notify you in advance of the need for repairs; depending on where you live, they’ll need to give you several days or several weeks’ time to take action before withholding rent. They should also let you know, preferably in writing, that they are withholding some or all of the rent prior to the actual due date.
- The amount of rent that can be withheld may be variable: Your state law will let you know how much of the rent can legally be withheld. In some cases, the full amount can be held back; in others, just the cost of repairs can be withheld, if the tenant has had to pay for the repairs themselves.
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What you can do to resolve the situation
Learn about your local laws and rent withholding, preferably before you have a problem. If you know your rights and what is legal in your area, you’ll be a step ahead when it comes to rent withholding.
Respond promptly to any repair requests by tenants. Even if you start by just taking a look, don’t neglect to respond when a tenant makes a complaint. Visit the unit if possible, and ask about the damage; you can learn more about the problem and also determine what caused the problem.
Try to resolve the situation without conflict: Both sides can be upset by and make demands when repairs are involved, particularly expensive repairs. Make sure your tenant knows you are willing to work with them, and make a plan to get any needed work done as soon as possible.
Know your legal rights and responsibilities, and document every visit and repair made to your home. If your tenant is withholding rent, make sure they are doing so legally; if your state requires escrow for withheld rent, your tenant needs to follow the law or you can evict them for nonpayment. Every state has different rules, so careful perusal of both your lease and your local laws will help you decide what action is best for you and your property.