Landlord Tenant Q&A: LAURENE H. YOUNG, (B) MPM, RMP, REALTOR
Young Hawaii Homes, Inc.
2011 President, Oahu Chapter
National Association of Residential Property Managers
Q. I have a rental that needs some repairs and painting. A friend of a friend was looking for a place to rent and said he would do the painting if I let him live in the unit for free for the first month. I let him and his family move in without a rental contract. It is now the third month and the painting isn’t finished & I haven’t received any rent. Can I evict him even though we don’t have a written lease? I also have lots more repairs that need to be done. Should I ask him to do more repairs until he pays off all the rent he owes me? I’m trying to be a nice guy and help the tenant out.
A. I’m not sure where to start. Well, first of all, you should always have a written contract. Any and all of the terms that you mutually agreed to should be spelled out in that contract. Without a written contract, however, the term of the rental agreement is a month to month tenancy. As such, you can start the process to evict the tenant by first sending a written notice that, unless payment is made in full within five business days after receipt of the notice, that you will terminate the rental agreement and begin eviction proceedings. Eviction procedures have been discussed in previous columns, so I will not go into detail here. You can contact your attorney for information.
Having your tenants do repairs is not a good idea mainly for liability reasons. If your tenants have no insurance and they get injured or injure someone else, or damage your home or someone else’s home, you could be liable for any damage or injury they cause. Even if you had an agreement with your tenants that they would be liable for any damage, if they have no insurance, you would likely be held responsible. You never know which way a judge will rule in that situation, so always have an insured professional doing your repairs.
Some landlords do not allow tenants do any repairs that involve even getting on a ladder higher than a few feet, such as changing a lightbulb in a 15-foot stairwell. Having a tenant crawl into an attic space to put rat traps, trimming tree branches, cleaning out rain gutters and the like is not a good idea and should be done by an insured professional hired by the owner. There are many repairs that owners may do by themselves in their own homes that they cannot expect tenants to do in a rental.
You may think this is a win-win situation for you and your tenant, but it really isn’t. The tenant may not do the work the way you would want it done or they may use inferior materials. The repair or painting they do may end up costing you more to fix later.
You have to declare the fair market value of any services provided by your tenant as rental income, so you might as well have a professional do the work and do it right. If your tenant paints your house or does repairs in lieu of rent, you must first include the value of those services in your rental income and then deduct it as an expense on your tax return. You still have to pay the general excise tax on the full value of those services.
Your tenant doesn’t seem to be making a good faith effort to hold up his part of your deal and do the work he agreed to anyway. Why do you think giving him another chance to do further work would be a good idea? At this point, I would cut my losses, evict the tenant, get an insured professional to do all the repairs and then try to rent out the unit in move-in condition. I know you’re trying to be a “nice guy” but I assume you still want to make a profit in your business. Good luck to you.