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Brad comments on Landlords vs Tenants: A match made in hell

I am not sure who thought that it would be a good idea to put landlords and tenants together in the same business arrangement, but this relationship has caused more turmoil and strife than almost any other. Let’s examine this:

First, we have a landlord. A landlord is someone who has invested his money into real property with the expectation of a good return on that investment. And in order to exact a good return, it requires minimal outlay of funds concurrent with maximum inflow of income.

Then, we have a tenant. A tenant is someone who wishes to pay and stay for a finite amount of time in a property paid for and maintained by someone else.

OK, well on the surface, that sounds pretty good. Landlords can’t generate income without “lending” their properties to tenants, and tenants can’t “borrow” properties unless someone else has bought and paid for them. So this is a pretty good match, right?

When we drill down into the details, we find that this is a volatile pairing in many cases, one that causes stress and disharmony to the parties. But why does it have to be this way? Landlords and tenants need each other!

I would say, if I had to give a one-one word explanation, it would be “expectations”. The expectations of the parties are often at the root of the discontent. TR Realty has a large and busy property management division, and as a result, I am privy to the mismatch of expectations on a daily basis.

Landlords, who are often labeled as “cheap” by tenants, feel that anything that breaks or wears out or requires replacement on a property should be at the tenant’s expense. Antique appliances that have been repaired more times than can be counted suddenly go bad? That’s the tenant’s fault. Stained carpeting that was installed during the Nixon administration? The tenant must have done that. Roof leak? Broken hot water heater? Dying landscaping here in the parched Las Vegas desert? That damn tenant: he must be going crazy over there, roughhousing, breaking things, just hell-bent on destruction.

Tenants, who are often labeled as “miscreants” by landlords, feel that anything that breaks or wears out or requires replacement on a property are automatic justification for rent credits. Many tenants seem to be of the belief that they are staying in a five-star hotel, and act indignant when something is not perfect or up to their standards. Leaking toilet that needs it’s components replaced due to wear and tear when there are two other working toilets in the house? Terrible landlord! Puddles of rainwater in the driveway after a downpour? Crappy, selfish landlord. Sliding glass door that doesn’t slide so easily? Handle fell off a cabinet door? Door lock needs lubrication? The landlord is just getting rich off of not caring! It sucks to live in a hovel!

So how do we reconcile the widely-held beliefs that landlords don’t want to fix anything or pay for anything, they just want to collect every single penny that they can; with the widely-held beliefs that tenants don’t want to take any responsibility for their actions, they just intentionally destroy properties and insist that landlords make repairs at the snap of a finger?

Oh, and did I mention that stuck somewhere in the middle is the well-intentioned property manager? Talk about a thankless job, trying to appease both parties at the same time, even though the parties have opposing interests. Guess who ends up taking the majority of the punches from both landlords and tenants?

Those real estate-savvy readers of this blog probably know that property managers, by way of property management agreements, have the authority (I would argue that they have a duty) to initiate repairs which costs do not exceed a certain threshold as delineated in the agreement. Landlords need to understand that they should not and cannot micro-manage these small repairs. And tenants need to understand that if any given repair exceeds the property manager’s limit of authority, then the landlord’s consent is required before the property manager can do much.

I guess any attempt at an amicable solution would sound Pollyannaish.

But at least we can try to adjust our expectations, no?  Landlords have to understand that owning an investment property is a business, and as such, it comes with it expenses that have to be paid and issues that have to be resolved. And tenants have to understand that life happens! Air conditioning systems sometimes break, even and especially in the summertime. No one planned it, and it’s not an irresponsible landlord in most cases who caused it. It just happens. And parts take time to be ordered and delivered, and companies take time to schedule service visits, and . . . . Everyone has to calm down and chill out.

Now, this is not to excuse parties with bad intentions on either side, mind you. But is that really the majority of the time?

When a property is rented out, title is transferred. Not the deed, but the title. That means that the rights to the property have been temporarily conveyed (rented), including the right to use the pool, sit in the backyard, park a car in the driveway, use the storage shed, and on and on. Upon renting out the property, the landlord may no longer do any of these things. Renting a property means vacating that property completely, and transferring all rights to that property to the tenant in exchange for his rent payment. And when these rights are transferred, the tenant has full control and all rights of enjoyment and usage.

Furthermore, after renting out a property, a landlord should never attempt to make any repairs to that property himself, due to the incredible liability of using an unlicensed, uninsured vendor (himself!).

It is my belief that tenants are only entitled to some restitution when they are unable to use the property or a substantial portion of the property. If there is no hot water, or no air conditioning in the summer, or a roof leak that damages possessions or causes mold, these are issues that may call for some compensation in the form of rent credits, especially when it takes several days for repairs to be completed (unless it is not due to any fault of the landlord). But minor inconveniences like one shower not working when there is another, or a washing machine that is out of service for only 48 hours, are exactly that: minor inconveniences. And if the tenant owned the house, the tenant would be dealing with these problems, as well.

So, in conclusion, if I may offer advice: landlords need to take immediate action, preferably through their property manager, to initiate repairs as soon as they are notified of those deficiencies. Yes, everyone likes to pay as little as possible. But keep in mind: someone else is paying for the right to occupy the property, and they should feel confident that their landlord is doing his best to maintain the property in the same manner that the landlord would want if he were living there. And tenants need to understand that rental properties are not hotels, that things break occasionally, that things need to be repaired occasionally, and that sometimes, these repairs take time.

Both landlords and tenants, keep in mind one thing: we need each other.

Date posted: September 7, 2014