Withholding Rent: Can a Tenant Withhold Rent for any Reason?

Withholding rent is a tactic used by renters trying to negotiate with a landlord. However, just as many tenants often threaten to “sue you” or to “call their lawyer,” the declaration that they will not pay their rent until something gets fixed has no legal standing except for a very few instances. You can diffuse the situation and avoid getting caught up in drama or manipulation if you know exactly what to do when a tenant threatens to withhold rent.

7 things landlords must know when a tenant threatens withholding rent:

1. Tenants cannot simply stop paying rent or they are in violation of the lease agreement and you can issue a pay or quit notice.
2. In those states that allow tenants to withhold rent for egregious repair issues, the damage must be significant and affect the health and safety of residents. Not just any repair qualifies—it must actually be hazardous or dangerous.
3. If the tenant or a guest has caused the hazard, damage or need for repair, they cannot legally withhold the rent and must take care of the repairs themselves out of their own budget.
4. If the state allows tenants to withhold rent for repair failures, tenants must provide written notice to the landlord of the repair request, a follow-up and then a declaration of the intent to withhold the rent. Tenants cannot simply make a threat and choose not to pay rent.
5. Several states require tenants who want to withhold rent to put funds in an escrow account so that it proves the tenant is simply not trying to get out of a payment. If a tenant is just holding on to the money, it’s against the law in some states.
6. Landlords have reasonable amounts of time to coordinate repairs to a rental property. Because major repairs are usually fixed via third party service vendors, there will be some gap between the first report of a repair and when the vendor can arrive on site. Tenants cannot impose their own deadlines on landlords for repairs and set their own agenda on when and if they will pay rent.
7. Different states outline what percent of rent can actually be withheld, whether it’s all of it or just the cost of repair. Tenants who threaten to withhold all the rent don’t get to choose the amount on their own.

So when a tenant is mad at you and is threatening to withhold the rent for some reason or another, you can calmly confront them and explain exactly where things stand.

Here are some tips to keep in mind when your tenant threatens to withhold the rent:

• Analyze Emotions. If a tenant is threatening to withhold the rent, there is generally something else going on that is stirring up their emotions. Are they angry at something in their lives? Did they run out of money this month? Have you neglected to repair something that you promised? Most tenants understand the lease agreement that outlines when rent is due, so if your tenant is making threats, you’ve got to figure out where these emotions are coming from, then try to neutralize them so you can have a rational conversation.
• Know the Law. While the specifics differ from state to state, in general, tenants cannot simply make a decision to withhold the rent as a means of leverage to get a landlord to do something. Well before you get into a situation where a tenant makes the threat, it’s a good idea to brush up on the laws for your state concerning rent withholding. That way, when you are confronted by the tenant, you can calmly explain what the law supports and what it does not. Here’s a link to different state laws regarding rent withholding.
• Respond Promptly. A responsible landlord responds to tenant issues in a reasonable amount of time and does their best to keep the lines of communication open with tenants. Whether it’s communicating via text or email, let the residents know what steps you’ve taken to resolve a repair situation and when you expect the service person to arrive at the rental property. This information will help the tenant keep their cool and back down from threats.
• Document Everything. Keep a paper trail of all the events surrounding a repair, whether its notes of a phone conversation or printouts of emails. If the worst case scenario happens and you end up in court, those documents will help you prove your side of the story.
• Don’t Hesitate. If your tenant doesn’t have any legal ground to stand on when it comes to withholding rent, but does so anyway, proceed with an official pay or quit notice just as you would if they simply failed to pay rent on the due date. It’s not worth losing several days or weeks of time and income in trying to sort out the threat when you know your landlord rights and whether or not your tenant has a case as supported by your state.

Can a tenant withhold rent for any reason?

The answer is no. There are instances a tenant could withhold rent if the apartment is not considered habitable. If the tenant lives in a state that allows tenants to withhold rent for unfinished repairs it is possible they could refrain from paying rent. This has to be in situations with where the unfinished repair is causing harm to the tenant.

If your tenant is upset and demanding action while threatening you, it’s best to respond with facts in a calm and even manner. When both landlords and tenants get upset and make demands, the conversation will go nowhere. If you know your legal rights and are prepared to educate the tenant about withholding rent, you can head off any future threats as well.

Withholding the rent is a legal remedy in several states for tenants who legitimately need to do so, but it is often used as a blanket threat by tenants who want to manipulate new or inexperienced landlords into action. If you know your rights and know the law in your state regarding rent, you’ll be able to diffuse the situation right away and get to the bottom of the situation.

Neutralizing threats and getting to the heart of the matter about a tenant’s nonpayment can get you much further ahead than battling back and forth while emotions are high. Only you know what is best for your business and your property, so stand firm and don’t react to threats from tenants that have no teeth.

Resources:

Listen to this interview discussing if a tenant can withhold rent for a noisy neighbor.