Podcast 394: What to Know About Reimbursing Tenants

In this week’s episode, Podcast Host, Property Manager & Business Owner, Andrew Schultz, chats about reimbursing tenants. In this specific case, we’ll talk about a renter with a running toilet that now wants to be reimbursed for the water bill.

How do you keep stray cats away from your property? Find out how to harmlessly keep something like a cat away from your rental property.

Last, but not least, you have a handy tenant who wants to help you replace a window. Should you let them? Find out in our latest podcast.

Andrew Schultz: (00:00)
Hey everyone. Welcome back to another episode of the Rent Prep for Landlords podcast. This is episode number 394, and I’m your host, Andrew Schultz. On today’s episode, we’re gonna be talking about stray cats at your rental properties. Should you let tenants complete repairs on your property and renter requesting reimbursement for bad management, we’ll get to all that right after this.

Voice Over: (00:24)
Welcome to the Rent Prep for Landlord’s podcast. Now your host, Andrew Schultz.

Andrew Schultz: (00:30)
Before we jump into today’s episode, have you had a chance to join the free Rent Prep for Landlord’s Facebook group? We just crossed over the 13,500 member threshold and we’re well on the way to 14,000. Yeah, if you have a question or a situation that you’ve never encountered before or you just wanna bounce an idea off a big group of housing providers, this is the place. If you haven’t checked it out yet, do it today over at facebook.com/groups/rentprep. Don’t forget to mention the podcast when answering the questions so we know how you found us

Voice Over: (00:58)
Water cooler wisdom expert advice from real estate pros.

Andrew Schultz: (01:07)
We’re gonna start things off this week with our water cooler wisdom segment. This is an interesting one that comes to us from the Rent Prep for Landlord’s Facebook group. We’re gonna go ahead and jump right in here. We have a Tomcat that has recently started spraying urine on our porch. Anyone know of a good cat repellent that actually works? And again, this one comes from the Rent Prep for Landlord’s Facebook group. In all the time that I’ve spent as a property manager, I never thought I would reach a point in my career where I would have to describe the difference between urinating and spraying, but here we are. So there is a difference between cats urinating and cat spraying. I think we all understand what urinating is, but spraying is a behavior that cats will use both male and female cats to mark their territory.

Andrew Schultz: (01:50)
If you have a cat in the neighborhood that’s coming to your property to spray, chances are they think your property’s pretty cool and they’re trying to market as their own. In addition, spraying is a very common tactic that cats use when they’re in heat. Cats will also spray if they’re stressed or have medical issues. I’m gonna assume that this is probably an outdoor cat. If it’s not being properly cared for, there’s a good chance that it has some sort of a medical condition that’s causing it to do this. So now that we understand why cats do what they do, what can we do to help stop the cat from spraying? The first thing you’re gonna wanna do is thoroughly clean the area where the cat has been spraying soap and water is not going to be enough for this. You’re going to need to go to a pet store and pick up an enzyme-based neutralizing cleanser.

Andrew Schultz: (02:33)
Whatever cleanser you opt to pick up also needs to have something in it to neutralize the scent. You don’t wanna buy something that has a bunch of scent built into it because you’re not really getting at the root of the issue. You’re just covering up the existing smell and the cat is going to continue to return and spray. Most of these products come in some sort of a spray bottle, similar to pretty much any other liquid household cleaner, which makes it very easy to apply, scrub and rinse the area down. I’ve also heard that you can use white vinegar for this purpose. I’ve never tried that. However, I’m a bit skeptical as I don’t think that there’s anything in white vinegar that would break down the uric acid and urea, and that’s why we’re using an enzyme-based cleaner. The enzymes attack the uric acid and the urea and break it down chemically, which is what eliminates the odor.

Andrew Schultz: (03:19)
Another thing that you can look into is eliminating any potential food sources for cats that may be in the area. So if you know that you have a lot of mice in the area around the outside of your building, you may wanna invest in some sort of extermination service to help reduce the overall mouse population, which at least in theory should help reduce the overall cat population. Make sure that the areas around your garbage cans and recycling are cleaned up and free of loose debris and make sure the tenants understand that cans or dumpsters need to remain closed at all times to prevent rodent infestation. It also recommend reaching out to your local S P C A or Humane Society to see if they offer any sort of catch and removed type services. I know that it’s no longer offered here in my area, but I know that at one point the SPCA here, they would actually offer a service where they could set a trap to catch feral cats.

Andrew Schultz: (04:06)
Then they would take them back to the SPCA, a spay or neuter them and then put them out for adoption. They will still take a cat that’s brought to them for a surrender, and unfortunately, we’ve had to do that a couple times, but it’s good to know that at least the animals getting the care that it needs at that point and hopefully gets adopted out into a loving family. While doing some additional research for this segment, I found a couple of other things that may or may not work, but I figured it would be worth mentioning them here. Just on the off chance that you have some extra time for some reason and decide that you wanna try some of these things out. If you have a particular plant in the area that the cat seems to be attracted to, it may be the plant that’s the problem.

Andrew Schultz: (04:45)
You might wanna try swapping the plants out for something different. Some people recommend putting something prickly in place or something along those lines. I’m not a big fan of that. I don’t see any reason to harm the cat. You just want it to go away. Essentially. Another recommendation was to sprinkle pine cones in the area because apparently, cats don’t like the feel of pine cones on their feet. Another person suggested spreading things around like coffee grounds or citrus peels, something of that nature. All of that stuff’s going to be temporary, and I really don’t think any of it’s going to work because you’re just covering up the smell and not actually dealing with the root issue. The one thing I came across that I was actually kind of intrigued by was using a carpet runner that’s been flipped over so that the prickly side faces up.

Andrew Schultz: (05:27)
That’s not gonna be sharp enough that it’s going to cause any harm to the cat, but it’s probably enough that the animal’s not gonna feel comfortable walking on it. That one’s actually kind of interesting to me. I might give that one a shot. The next time we run into one of these issues, our second water cooler wisdom segment this week also comes to us via the Rent Prep for Landlord’s Facebook group. What is your take on having a window replaced by a tenant who knows how to do it? My take is that unless your tenant owns a contracting company and is able to provide you with a W nine, a copy of their general liability insurance, and a copy of their worker’s compensation insurance, that this shouldn’t even be a discussion worth having. I know that sounds pretty harsh, but let’s get into why it’s a bad idea to have tenants do work for you.

Andrew Schultz: (06:10)
We’re gonna start by going right back to the root of the question, how well does the tenant know how to install the window in the first place? Is this tenant effectively engaged in the window installation business at work, or have they put one or two windows in and think that they know what they’re doing? There’s a big difference, a big difference between the guy that knows how to putter around the house and take care of a few little household projects here and there, the weekend warrior type if you will, and an actual qualified contractor with proper licenses and insurances, you know somebody that actually knows what they’re doing. Another question that’s definitely worth pondering here is by paying this tenant to do work or offering them a credit on their rent or whatever the case may be, are you creating an employer-employee relationship? And if that’s the case, are you set up with all of the appropriate payroll services that you would need to pay them out properly?

Andrew Schultz: (07:02)
Look, I get it. You’re probably talking about paying somebody a few hundred dollars to throw a window in on the weekend. Chances are the IRS is never gonna know about it and it’s never gonna be a big deal. But what happens if something happens to that tenant while they’re doing the work? Keep in mind, you’re dealing with glass. If a tenant sustains a cut and has to go to the hospital for stitches, whose responsibility is that? Now, we could all sit here and laugh and say that that’ll never happen, but I’ve literally watched that exact scenario play out. I had a self-managing client call me to tell me the, almost that exact story. The tenant was working on a ladder, replacing a window to work off some pass due rent, and I don’t know if the ladder moved a little bit or if the tenant just didn’t feel comfortable, feel stable on the ladder, whatever happened, but the end result was the tenant ended up grabbing a piece of broken glass and ended up with a great big slash across their entire palm and had to go to the hospital for stitches.

Andrew Schultz: (07:57)
Ultimately, that tenant wasn’t able to go to work for several weeks after the injury occurred. Who do you think got sued in that instance? The fact of the matter is that having an uninsured tenant handle maintenance for you is generally a bad idea. Our tenant-required maintenance is generally limited to things like changing light bulbs or you know, maybe a furnace filter, a water filter, and a refrigerator consumable type stuff. We might have them do snow shoveling if it’s a duplex or something like that, a single family or a duplex. But if a tenant needs to get on a ladder to change that light bulb or if it’s a three-plus unit property, we’re already stepping in to handle those items so that the tenant doesn’t have to. Okay, so let’s say that your tenant works for a window and door company and wants to do this job on the weekend.

Andrew Schultz: (08:43)
Now you’re dealing with somebody that at least has a pretty good idea of what they’re doing, but they’re not insured by their employer on side jobs and when they’re not off the clock, so you’re still in the exact same boat that you were before other than than the fact that the tenant has some experience, and in my mind, this is still a bad idea. If you’re planning on having contractors come into your property to work, you need to take the steps necessary to make sure that you’re working with an actual contractor. It’s very, very easy to get burned and you cannot take anyone’s word for it, especially in this day and age. This is gonna look a little bit different depending on the different areas that you may be in, but generally speaking, you’re going to want a W nine for tax purposes. That’s the form that gives you their tax ID number, so you can send them a 10 99 at the end of the year.

Andrew Schultz: (09:27)
You’re gonna want a copy of their general liability insurance showing you as additional insured, and you’re going to want a written scope of work that outlines exactly what they’re doing, the projects start and end dates, the pricing, and things of that nature. In some areas, you may also need to get a copy of their contractor’s license. Different states seem to work this a little bit differently. In some states, a contractor can get a license at the state level that’s good to work anywhere in the state. In other areas, the contractor will need to pull an individual license in every municipality that they’re working in, and generally speaking, a quick call to your building department will be enough to find out whether or not a contractor is properly licensed in the area that your property is in and whether or not that they can pull a permit properly.

Andrew Schultz: (10:08)
That’s also a good opportunity to ask the building inspections department if you need a permit for the job that you’re doing. Man, there it is. I just used a couple of the most dirty words in the real estate and investor space permit and building inspector. The one thing that you need to understand is that working with the Building Inspections department and getting a permit when you need one ultimately makes your life a lot easier in the long run because when you have an unlicensed tenant swap out the window and they slip and cut their hand wide open, all it takes is one call from that tenant to the building inspections department and they’re going to be all over your property looking for any sort of changes that might have been made without permits or anything that doesn’t conform to current code. Anything along those lines ask me how.

Andrew Schultz: (10:50)
I know in the past we’ve done jobs and especially early on when we weren’t necessarily quite as astute as we are now, didn’t necessarily pull permits every single time that we should have, and a lot of times we got burned on it. We’ve learned our lesson, and if that’s the practice that you’re engaged in, I assure you that eventually you’re gonna learn that lesson too. What I found over the years is that most people who are willing to skip steps like licensing and insurance and permits are also the same people that have a tendency to do substandard work that doesn’t actually meet the building code. Go figure. Keep in mind that ultimately somebody has to live in the property that work is being done on and you are the one responsible for that property as the landlord. Even if somebody else did the work, it’s still gonna fall back to you in one way, shape, or form. If you’re putting a substandard product on the market, you’re going to wind up getting substandard tenants and you’re going to wind up having a substandard landlording experience. I understand that there’s a budget for everything and sometimes money can be tight, but generally speaking, cutting corners in maintenance leads to more headaches than it’s worth.

Voice Over: (11:56)
Forum quorum where we scour the internet for ridiculous posts from landlords and tenants.

Andrew Schultz: (12:05)
Our third and final segment this week is Forum Quorum. This one comes to us via Reddit. We’re gonna go ahead and jump right in here. Looking for advice from a property manager. I have a long-term month-to-month tenant that had a running toilet for several months, which has increased the water bill by some. He made me aware of the issue two months ago and it was just recently fixed. Long story. The tenant is now seeking assistance from the property manager to help with the cost of the water bill. So this is an interesting one. There’s a couple things right in the question that kind of caused me to raise an eyebrow. First of all, if you’re using a property management company, your property management company should be the first and only point of contact for the tenant. The entire reason that you hire a property management company is to take you out of the day-to-day operations of the property.

Andrew Schultz: (12:53)
So when you say that the tenant reached out to you instead of to the property manager to report this maintenance issue, that’s a bit of a red flag for me. Your property manager should be handling these and all other requests from your tenant directly. Now, let’s take one step forward. You reported this problem to your property manager two months ago when the tenant reported the problem to you. What is the property manager been doing for the last two months that they’ve been unable to get this toilet repaired? Listen, I own a property management company and I understand that not every single repair is going to be the absolute top priority, but when you have somebody that has a leaking device in their home, whether it be a sink, toilet, shower, hot water tank, it’s an issue. Water can cause a lot of damage in a very short period of time if it’s going in places where it’s not supposed to go.

Andrew Schultz: (13:39)
So if you have water dripping out of a pressure relief valve on a hot water tank, for instance, that water is running across your floor, you may wind up with floor damage depending on what the floor is made out of. It’s a little bit different scenario here with the running toilet, but the same basic concept applies. More water is being run through that device than what’s supposed to be, and yeah, that’s going to lead to a higher water bill. The simplest way to resolve this is a timely and correct repair. Swapping the innards of the toilet is not a particularly difficult or time-consuming task, and it seems to me that any professional property management company should be able to get this accomplished in relatively short order. I’m not gonna sit here and put a timeline on it because everybody runs a different maintenance schedule, but certainly faster than two months.

Andrew Schultz: (14:22)
Now, as far as the tenant is concerned, I think that they have every right to request some sort of assistance on the water bill from the property management company, assuming that the tenant reported the issue as soon as they were made aware of it, to be very clear from the billing on the water bill as to when the issue started because you’ll see an increase in usage during that timeframe. So water bills typically get billed on a quarterly basis here in Western New York. So if I have a water bill for $400 and one quarter and it was 200 in the previous quarter, it’s usually a pretty safe bet that something is leaking at that property or the tenants have moved someone in without telling us, or someone is doing a lot more wash than they used to, but something is wrong when you see a water belt jump like that.

Andrew Schultz: (15:06)
At that point. As the property manager, I would likely credit the tenant the difference between the previous and the current invoice because this is pretty clearly an issue where the property manager screwed up. So if it was my company and I realized that this had happened, we would eat that little bit of a loss on this. It’s also worth noting that in many areas, the utility company will give you a one-time waiver from usage as a result of a leak. Again, this is not something that happens everywhere, but I have seen it happen with several municipalities here in Western New York. If I was your property manager, I would certainly be reaching out to the water company to at least ask if that’s an option. Either way, I think your property manager needs to step up here and take responsibility for this issue assuming they were the ones that caused it.

Andrew Schultz: (15:47)
If it’s a situation where the tenant’s been denying them access for two months, that’s a little different scenario. I think eventually I would just force into the unit and take care of the maintenance issue, but again, that’s another story for another day. On a side note, if your tenant was reporting this issue to the manager and it wasn’t getting anywhere and that’s why they came to you, that would be a huge red flag for me. The fact that it took the property manager two months to deal with the issue after you as the property owner brought it to their attention would be red flag number two, and the fact that they’re arguing with the tenant over the water bill would be red flag number three, I would start looking for another property management company. It sounds like the company that you’re working with may have some underlying issues that they need to deal with. What’s the best app on the market to collect your rent payments? In my latest YouTube video, I go over some of the top apps that landlords use to collect rent payments, including the benefits and downfalls of each to watch that video. Head on over to youtube.com/rentprep today.

Andrew Schultz: (16:46)
That pretty much wraps it up for this episode of the Rent Prep for Landlords podcast. Thank you all so much for listening. We truly do appreciate it. Our goal with the podcast is to help as many people as possible make educated decisions when it comes to real estate, and you can help us to reach our goal. If you heard anything in this week’s episode or any other episode that will help someone that you know, please do us a favor and share it with them. If you’re looking to get in contact with me, I can be reached over at whatsdrewupto.com. From there, you’ll find links to everything going on with me over at Own Buffalo, as well as other projects that we’re working on. Grab a copy of our free deal analysis tool today over at whatsdrewupto.com. There’s no obligation and it comes with a free companion video showing you how to use it.

Andrew Schultz: (17:26)
If you’re looking for top-tier tenant screening services, head on over to rentprep.com. There are multiple products to choose from, including a tenant-paid option, and if you’re over 50 doors, ask about the enterprise-level programs and pricing. I’ve been an enterprise user of Rent Prep for years now, and it’s definitely changed the way that we screen our tenants. Thank you all so much for listening. We’ll be back in two weeks with an all-new episode you won’t want to miss. Until then, I’m Andrew Schultz with ownbuffalo.com for rentprep.com, and we’ll talk to you soon.

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