Is A Tenant Allowed to ‘Repair And Deduct’ Costs From The Rent

Ques. What is ‘Repair and Deduct’?
Ans: In keeping with the law, repair and deduct permits a tenant to carry out essential maintenance tasks in his / her rental accommodation, deducting the repair costs from the rent, later on. As a rule, most state or local laws only allow repairs that make a place habitable i.e. getting a broken furnace to work again or plugging a leaking roof.

Ques. What restrictions, if any, surround the use of ‘Repair and Deduct’?
Ans. Local laws place a limit to the dollar amount a tenant is allowed to spend on repairs. Take for example, the Chicago ordinance that restricts a tenant from spending more than $500/- on rental accommodation repairs, while other existing laws limit a tenant from spending more than a month’s rent.

On the other hand, jurisdictions that do not have an explicit repair and deduct legislation, rely on the implied warranty of habitability, limiting ‘repair and deduct’ to only the reasonableness of the repairs, so much so, a tenant may even buy a new furnace, and then deduct its cost from the rent.

Ques. Does a tenant have to follow a special procedure before going in for ‘Repair and Deduct’?
Ans. A tenant must serve his / her landlord with a written notice, specifically listing what repairs need to be carried out. He / she must warn the landlord that failure to comply within the stipulated time-frame will see the tenant carrying out the necessary repairs, deducting repair costs from the rent, later on.

Ques. What is meant by reduced rent?
Ans. If rental premises fail to comply with the local housing code standards, the law allows tenants to pay reduced rent, instead of the full contract amount, a reflection on the reduced value of the premises.

Ques. What calculations do courts use to calculate rent reductions?
Ans. Several standards are used, with no consistency across the country. Reductions may be permitted based on the fair market rental value of the premises i.e. the rental amount may be reduced from the contract amount to the value a court considers fair considering the defects. Or, a proportional use standard is used, meaning rent reduction is determined on the basis of how much the defects reduce use of the premises i.e. 40% use reduction involves a 40% reduction in rent.

Ques. What procedure is to be followed by a tenant for paying reduced rent?
Ans. A written notice must be served to the landlord, listing what repairs are required to be done, as well as, stating the timeframe within which they must be carried out, failing which the tenant will pay reduced rent, unless and until the landlord carries out the repairs within the specified time.

Ques. Is a tenant allowed to seek past months rent reduction for defective premises, even though he / she has paid rent in full?
Ans. Possibly, only in this case, the tenant may have to sue the landlord to collect. Both, implied warranty of habitability and local ordinances grant a tenant the right to recover damages from a landlord for failing to maintain the rental premises according to local housing code standards. Take for example, the case of a tenant whose lease calls for $500 per month as rental charges, which he / she has paid for 7-months = $3,500 in sum total. If, the courts declares the rent charged should not have exceeded $350/-, then it can ask the landlord to refund overpayment of $1,050 to the tenant.

Ques. Is a tenant allowed to withhold all of the rent?
Ans. A tenant can do that to catch the landlord’s attention. However, it is also possible that the landlord will retaliate with a notice to pay or get out. If, the premises are habitable to some extent, a certain amount of rent is due the landlord, and only a court can decide the reduction that is justified.

Ques. Does a tenant have to hold the withheld rent in an escrow account?
Ans. It is not a legal requirement, though perhaps, it might be a good idea, as some local landlord-tenant ordinances might require the rent money to be placed in escrow, in the event the case goes to court, when the judge may ask if the disputed money is available.

However, to avoid expensive litigation, landlords should screen prospective tenants thoroughly, weeding out undesirable elements with past evictions or criminal pasts. Visit www.e-renter.com for tenant screening and background check services.