For the most part, having a tenant trade work for rent is not a good idea. Most tenants are not skilled in home maintenance tasks beyond the ordinary upkeep. A landlord who receives substandard work, in exchange for rent, has little recourse other than to damage the landlord/tenant relationship even further by refusing compensation.
One of the more frequent tasks prospective tenants will negotiate with landlords is painting. After all, painting is not that hard to do. It doesn’t require specialized tools or a high degree of experience or skill to accomplish. The landlord often consents with the idea of saving money. However, they don't realize the problems it can create, particularly if they don't give any limitations or quality standards when it comes to painting.
Landlords should consider many factors about an offer to paint:
- Can the tenant adequately paint the property? A botched paint job, or spilled paint, can be incredibly difficult or impossible to remove.
- What type of paint and color(s) will the tenant use? The owner should control the materials used, ensuring adequate quality and avoiding garish color choices.
- Who will inspect the paint job to see it's completed and properly done? Any compensation should be offered, subject to the approval of the work after its completion. Never give the concession upfront, with the promise of work to be done later.
- Are there any legal issues that could arise from allowing a tenant to paint? What is someone falls off a ladder? Does the tenant have adequate insurance for liability, in case they cause damage in the course of doing work?
- Why would a qualified tenant pick a property in poor condition, but offer to paint? The big question is what kind of tenant is attracted to a property that isn't move-in ready, and why would the landlord market the unit when it isn’t ready to occupy?
Here is a true story about a landlord who allowed a tenant to paint:
Mr. Johnson agreed to allow the new tenant, Mr. Morton, to paint instead of paying a security deposit, as well as reducing the first month’s rent by 50 percent. The tenant bought the paint and did the work. In the course of painting, Mr. Morton damages the floor, woodwork and more. The paint job is sloppy, and the paint is of poor quality. To make matters worse, he used intense paint colors in the bedrooms, fuchsia and black, because it matched his decor.
Upon inspecting the property, Mr. Johnson was appalled with the condition and poor quality of the work, and demanded Mr. Morton repaint and clean up the damage. Mr. Morton refused. Mr. Johnson had no agreement as to what he required and therefore had no recourse. The tenant is in possession and has no security deposit.
Mr. Johnson decided to give the tenant notice to vacate. Mr. Morton challenged the notice as retaliation, and it went to court. The court decided the tenant hadn't violated his rental agreement. Mr. Johnson lost the court action and had to pay all attorneys’ fees. Eventually, Mr. Morton defaulted on his rental payments and Mr. Johnson evicted him. He left the property in even worse condition, and Mr. Johnson took a net loss for his misguided generosity.
Now, the owner has a poor paint job requiring more money in the future to clean up the damage and to put the walls in good condition. The flooring and woodwork need a major cleaning, but they might not clean up. Special primer and additional coats will be necessary to remove the bright colors.
In addition, there isn't a security deposit to cover the painting damage, other repairs and loss of rent. It was a costly lesson to Mr. Johnson.
This story simply didn't have to happen. One mistake was not having an explicit agreement in writing on the type and color of paint, as well as requiring the tenant to fix any damages. Compounding this mistake was to allow the tenant to move in without a security deposit for any future damages or loss of rent.
One mistake was not asking why a good tenant would accept a property in poor condition. Good clean properties attract good tenants. Mr. Johnson was anxious to rent the property and save money that he didn't check out Mr. Morton’s qualifications.
Whether the tenant is renting the property or has lived there several years, it's simply more cost effective to hire a professional to do the painting, eliminating many problems. In some states, allowing a tenant to paint instead of making a payment can even cause payroll or tax problems.
While this sort of scenario plays out with some frequency in private rentals, professional property managers like the ones at TREG know what a bad idea it can be to engage a tenant to perform maintenance.
If you own rental property, having a professional manager in your corner can be a great asset. Let the property managers at The Real Estate Group show you how worry-free it can be to own investment property. Contact us at (757) 512-7225 or on our website, at our complete Property Management portal.