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Can Tenants Take Renovations Off of Rent?

A landlord-tenant relationship is not merely defined by the ability to use property in exchange for a fee. Both the landlord and tenant have a responsibility to maintain the property and keep it in good working order. Beyond those obligations, any improvements to the property need to be negotiated between the landlord and tenant. How those improvements are to be paid for will be defined by a resulting contract.

  1. Tenancy Law

    • When a landlord enters into a relationship with a renter, that relationship is called a tenancy. The renter is known as the tenant. In exchange for paying rent, the individual gets to use and occupy the property. Laws regarding tenancy are defined by the state where the property is located, so standards vary. The Residential Landlord and Tenant Act was drafted in an effort to establish consistent landlord-tenant standards across the country. It has been endorsed by the American Bar Association and has been adopted by 19 states as of 2011. Therefore, for general discussions about tenant rights it is best to use the RLTA as the framework.

    Landlord Obligations

    • In regard to the physical condition of the property, a landlord must ensure that the building is habitable. This means that the landlord must make sure the property conforms to all building and housing codes in the area and that the common areas are clean and safe for use. In addition, the landlord must provide a means for the tenant to dispose of waste; maintain all necessities such as electrical wiring and plumbing; and ensure that the tenants have enough heat and hot water during the winter months. If the landlord does not comply with these obligations, the tenant may terminate the lease if the breach is not or cannot be remedied by repairs. If the condition can be fixed, the cost of the repair is less than half the tenant’s monthly rent, and the landlord does not fix the condition within 14 days of being notified, the tenant may fix the property in an efficient direct manner. After submitting to the landlord an itemized bill of the repairs, the tenant may deduct the repair expense from his rent.

    Tenant Obligations

    • The tenant also has a responsibility to maintain the rented property as well. This requires him to comply with the sections of the building code relevant to his position as a tenant; to keep the premises clean and safe; to dispose of garbage an waste; to keep the plumbing clear; and to use the utilities of the apartment in a reasonable manner. The tenant also cannot deliberately or negligently destroy any part of the property. Repairs resulting from breaches of these obligations are to be paid by the tenants and are not deductible from rent.

    Renovations

    • Renovations that go beyond the standard maintenance requirements and how those alterations are paid for can be covered in the rental agreement. As the tenancy relationship is currently defined on contract law, the relevant conditions for a good contract will apply when establishing how the renovations are to be paid for and the terms of the work. To be binding, the clause regarding the construction of the renovation must specify the work required for the renovation, how much the landlord will pay for the work. If the lease states that the costs associated with the renovation may be deducted from rent, the tenant may do that.

    Considerations

    • If you are having issues with rent, either collecting as a landlord or in determining what you owe as a tenant, consult a licensed attorney in your area to determine what options may be available to you. While every effort has been taken to ensure that this article’s completeness and accuracy, it is not intended to be legal advice.

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