08 June 2010
Until recently, I would either pay them in cash, or simply drop off a check in their mailbox. Now, the tenants are asking me to offset their payment from their rent. I told them I’d think about it and get back to them.
If I accept their request to just offset the value of their repair work from the rent, am I asking for trouble?
A: You should never mix your tenancy relationship with the work performed by your tenants. Keep the relationships separate and distinct. Not only is it good business practice, but it also prevents many legal issues from arising.
If you mix the issues of services performed in exchange for payment of the rent, you have now expanded your tenant’s potential defenses as to why he or she should not pay the rent. If the rent is a separate transaction, the tenant will have no claim that he is entitled to a reduction or a credit for work performed but not paid.
Also, if you have problems with the tenant’s work product, you can hash out those work-related issues while the tenant continues to pay rent. Be very cautious when allowing your tenants to perform work on your building. The benefits may seem great, but the pitfalls are many.