Landlord’s Guide to Tenant Repair and Deduct

Last Updated on

When it comes to tenants not paying rent because repairs to the property are needed, there are two separate situations: repair and deduct, and withholding rent. This article is about repair and deduct, and the topic of withholding rent will be addressed in a future article.
The ongoing battle between tenants and landlords finding common ground when it comes to making repairs and who is responsible. often creates frustration and worry for both sides. There are many situations all across the country where tenants, who are fed up with their landlords not making repairs, threaten to withhold rent unless some action is taken. While threats like this may seem like a good idea to tenants, there is a lot to learn about withholding rent when repairs are needed.

Can Tenants Really Deduct from the Rent?

When a tenant doesn’t feel like the landlord is making the repairs they should, they may threaten to withhold the rent until the landlord takes action. Perhaps they’ve heard of another tenant somewhere who tried this and got their landlord to hustle up, or maybe they’ve read about a rent deduction situation from a friend, relative or in a news story. Even the most levelheaded tenants may see nothing wrong with arranging for a repair to be made, paying the bill, then deducting that amount from the rent as a regular course of action, thinking they are helping out the landlord. However, refusing to pay full rent for any reason can land tenants into some hot water very quickly.
There are some circumstances where the courts recognize that landlords are not performing their job of providing a habitable place for tenants to live, and lawmakers have created certain conditions where tenants can take care of repairs themselves and deduct the amount of the repair from the rent. This is called “repair and deduct” and is strictly regulated within the states that allow it. Repair and deduct is very clearly outlined in state statues, and smart landlords should get to know more about this before the issue even arises with one of their tenants.

What Exactly Is Repair and Deduct?

Repair and deduct is the general term for when a tenant has the right to arrange and pay for a significant repair out of their own pocket, then deduct that amount from the rent. It is usually done when a landlord has failed to make a significant repair soon enough and it is affecting the health and safety of tenants or the rental property.
In order to qualify for a repair and deduct condition, the problem with the rental property must be serious enough to truly affect the tenant’s well-being. Generally, the promise of habitability includes a structurally sound unit, hot and cold running water, heat in cold weather and to be generally free of pests. Over the years, courts have supported tenants who repair and deduct for those situations only. Minor to medium repairs simply do not qualify. Also, tenants cannot make improvements to the rental property, like paint or replace light fixtures, and take the amount spent out of the rent.
Another important condition to a legal repair and deduct is that the problem cannot have been caused by the tenant, others living in the property, pets or guests. Tenants are responsible to pay for any damage or repair that they or their guests cause. If the necessary repair is affecting a tenant’s health and safety, they must notify the landlord immediately and work together to arrange for repairs or service, with the tenant footing the bill. The tenant is also expected to pay full rent as usual. There is no legal scenario that allows a tenant to decide to deduct an amount from the rent for anything not charged for the actual repair. Some tenants may claim they deserve to take something like $100 off the rent on top of repair costs for worry, stress, or inconvenience, but this is illegal.
In most states that allow repair and deduct, the tenants must put their first repair request in writing, and give the landlord a reasonable time to either make the repair or arrange for professional servicing. If the landlord fails to do so and doesn’t have a good reason (like the repair service’s schedule), the tenant is usually required to send a second notice with the repair estimate and the message that they intend to do a repair and deduct.

Risks to Landlords

In state laws regarding repair and deduct, there is generally a time period, defined as “reasonable”, wherein the landlord must have completed the repair or made arrangements with a professional to do so. When that time period expires, the tenant can proceed with the repair and deduct the cost from the rent, and will usually be supported by the courts.
Most states don’t specify the time limit for reasonable because it all depends on the problem. This gray area means that landlords should do everything possible to take care of serious repairs soon, keep good notes about their efforts to remedy the situation, and stay in constant communication with the tenant. If the landlord doesn’t make that effort or the repair takes an unusually long time to fix, the tenant may choose to go ahead with a repair and deduct option.
Some landlords may be OK with tenants taking care of repairs and then deducting the cost from the next month’s rent. However, most landlords want to have the control over what happens with the property, choose which service personnel are doing repairs, and ensuring that the cost of repair is reasonable and fair.
The most serious risk for landlords in this type of situation is that the tenant takes them to court where it can be shown that the landlord did indeed fail to perform significant repairs in a reasonable time. Depending on the state, it could lead to the landlord remitting or refunding rent, covering attorney fees and court costs, and paying the amount of the repair, for example.

Risks to Tenants

Tenants might have a lot to lose if they go ahead with a repair and deduct option. While there are some cases with lazy or absent landlords that justify the approach, for the most part, they are at risk of getting evicted for non-payment of rent.
Here are some reasons why tenants may not qualify for a repair and deduct option:

  • If the court doesn’t determine that the repair was significant enough to use a repair and deduct
  • If the problem was caused by the tenants or their guests
  • If the tenant paid for a repair without giving the landlord proper notice
  • If the tenant didn’t allow for a reasonable time for the landlord to do the repair or arrange for it to be done
  • If the tenant failed to follow the state’s strict notice process
  • If the repair cost exceeds the amount allowed by their state
  • If tenants fail to provide receipts to the landlord of the actual repair costs

The risk to tenants includes eviction and appearing in court where the landlord is trying to get all the back rent owed in an eviction process. If the tenant cannot show the court any solid evidence to justify the repair and deduct option they used, they could end up owing for rent, court fees, attorney fees and more.
Landlords who receive notice from tenants who are threatening to make repairs on their own and deduct the cost from the rent should do them a favor and point tenants toward their state’s laws on the topic. That way, they won’t make any common errors and will reduce their risk of eviction for nonpayment of rent.

State Laws for Repair and Deduct

Each state has specific laws about whether tenants can do a repair and deduct, and the timelines and processes differ greatly. It’s a good idea for landlords to learn the specifics about their own state so that when a tenant threatens to withhold rent, they know what the state law will support. Whenever landlords have to deal with the repair and deduct notices, it’s always better to have the law on their side.
The following states DO NOT have repair and deduct laws for tenants:

  • Alabama
  • Arkansas
  • Georgia
  • Idaho
  • Indiana
  • North Carolina
  • West Virginia

The following states DO have repair and deduct laws for tenants:

  • Alaska
  • Arizona
  • California
  • Colorado
  • Connecticut
  • Delaware
  • Washington D.C.
  • Florida
  • Hawaii
  • Illinois (limited)
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Maine
  • Maryland
  • Massachusetts
  • Michigan
  • Minnesota
  • Mississippi
  • Missouri
  • Montana
  • Nebraska
  • Nevada
  • New Hampshire
  • New Jersey
  • New Mexico
  • New York
  • North Dakota
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • South Dakota
  • Tennessee
  • Texas
  • Utah
  • Vermont
  • Virginia
  • Washington
  • Wisconsin
  • Wyoming

How Tenants Must Proceed With Repair and Deduct

Just because your state allows it doesn’t mean a tenant has free reign on making just any repairs and sending you a reduced rent check every month. There are strict standards about what a tenant must do in order to be legally protected under repair and deduct laws.
Each state has different laws that govern when and how a tenant can legally deduct rent for a repair that has not been made. The laws include language that addresses things like:

      • What types of repairs qualify
      • What type of notice tenants must give the landlord about the repair
      • The amount of time the landlord has to fix the problem before the next step
      • What type of secondary notice tenants must give the landlord
      • Limits on how much rent a tenant can withhold
      • Frequency that tenants can use the rent and deduct remedy
      • Miscellaneous other conditions that may uniquely apply to a state

Landlords should find out the details that govern the rental properties in their state so they are informed as to what both tenants and landlords are expected to do in the situation.
For example, in Tennessee, a tenant must give written notice to the landlord about a repair that affects essential services, defined as things related to electricity, water, security, and heat. If after a reasonable time, generally defined as 14 days, the landlord has failed to remedy the situation, the tenant may “procure essential services during the period of the landlord’s noncompliance” and deduct the actual cost of a repair from the rent the next month. (Tenn. Code Ann. §68-28-502)

How to Avoid Repair and Deduct Notices from Tenants

It’s easy for landlords to avoid repair and deduct notices from tenants—just make all repairs in a timely manner and keep communicating. When landlords are notified of a big repair that affects the health and safety of tenants, they shouldn’t delay in making arrangements to take care of it or to call a service person. Landlords who let their tenants know what is happening, such as when the repair appointment is, are showing the tenants they are working on the problem. Some landlords even take extra steps in emergencies, such as providing space heaters for tenants if the furnace goes out and the repair truck can’t make it for a day or two.
Ultimately, taking care of big repairs is the wise thing to do to protect their investment, so most landlords don’t usually hesitate when something goes wrong. The confrontations usually arise when the cause of the repair is in dispute and whether or not it is taken care of fast enough.