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Should a Landlord rely on a Tenant to Pay their Bills?

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Real Estate Agent with Hansen Real Estate Group Inc.
Should a Landlord rely on a Tenant to Pay their Bills?

As a Wellington Rental Agent I never recommend a landlord rely on the tenant to pay their bills especially if the bill is in the landlords name;  mortgage, HOA dues, property taxes or even items that need regular maintenance like the pool or lawn.  

Wellington Landlord pays billsWhy?  Because if the tenant doesn't pay the landlords mortgage, HOA dues or property taxes THE LANDLORD will be the one held liable.  If the tenant decides to forgo maintaining the pool or lawn because they want to save money THE LANDLORD is the one who may end up with a lien on their property, not the tenant.

While a Wellington landlord can take action against the tenant for failure to perform it will not erase the damage that was already done.

In my opinion a Wellington Landlord can avoid a possible headache by paying the bills and not relying on the tenant.


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About the Author:
Michelle Gibson is a full-time Realtor with the Hansen Real Estate Group Inc. She has been specializing in residential real estate throughout Palm Beach County Florida since 2001. Specific areas of expertise include; Wellington, Lake Worth, Royal Palm Beach, West Palm Beach, Boynton Beach, Loxahatchee, Greenacres, Lake Clarke Shores, Palm Beach Gardens, Jupiter, Delray Beach, and Jupiter.
 
Whether you're looking to buy, sell or rent Michelle will be able to walk you through your entire real estate transaction from start to finish.
 
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Shane Willis
Re/Max OB - Pensacola, FL
MBA, CDPE, CIAS, E-Pro

Michelle,

I think I understand your point behind the post, but let me pose a question. If an investor is not relying on a tenant to pay the bills (and get a return on the investment) then why invest in real estate? I always recommend my investors put some of the annual revenue aside for repairs and a vacancy reserve, but the point of investing in real estate (or anything for that matter) is to get a return on your investment. Does that make sense or am I just rambling?......Happy New Year

Dec 31, 2011 01:14 AM
Liz and Bill Spear
Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH
Transaction Alliance Cincinnati & Dayton suburbs

Michelle, I'd be nervous relying on someone else to handle the bills.  There's too much at risk to do other than what you suggest.

Dec 31, 2011 03:03 AM
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Shane - I may have not been clear in the post or maybe I was and we're just on two different pages.

I'm talking about who actually pays the bills, not where the money to pay those bills comes from.

If the landlord is going to charge $2,000 a month for rent and make the tenant be responsible for lawn maintenance the landlord should consider charging $2,050 and they pay for the lawn care for two reasons.

1.  They know the lawn is being taken care of

2.  The lawn bill is being paid

In my area if the lawn isn't maintained their is a strong possibility the village of Wellington and/or the community itself will fine the owner and in some cases put a lien on their home.  While they can turn around and go after the tenant it's a nightmare that can be avoided.

Dec 31, 2011 03:08 AM
Jane Peters
Home Jane Realty - Los Angeles, CA
Los Angeles real estate concierge services

Generally here, the HOA covers the common areas and in a house, usually the landlord pays for all the maintenance, although occasionally they do want the tenants to take care of it.  But this is an excellent point. It is much safer for the landlord to handle everything and maybe increase the rent slightly to cover the extra expense.

Dec 31, 2011 03:18 AM
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The RIGHT CHARLOTTE REALTOR!

Yes, everything needs to be in the landlord's name and the basic rent needs to cover those bills--one check from the tenant and the landlord needs to take care of the dispursement.  Otherwise, the owner/landlord is rolling the dice each month--I want to be the one jeopardizing his investment AND his credit score!

Dec 31, 2011 03:38 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Good points Michelle.  And when the tenants opt out of doing things like lawn care, although it might be agreed to in the rental agreement, it's a good idea to put in a clause that says if they don't the landlord will, and bill them accordingly.  The fines that can accumulate in an HOA or PUD is the reason! 

Dec 31, 2011 05:03 AM
Todd Clark - Retired
eXp Realty LLC - Tigard, OR
Principle Broker Oregon

I wouldn't even allow a 3rd party to take care of things like that. Collecting rent from a tenant and evictions yes, but when it comes to my mortgage and my bills, I'll make sure those get paid.

 

Dec 31, 2011 06:51 AM
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

It's a good idea to have those things lined up and included in the rent.  Renters here cringe at pool care (which is really easy) and lawn care!

Dec 31, 2011 09:42 AM
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Liz & Bill - Me too

Jane - Some of our HOA's cover a lot, but not all.

Debe - I agree

Carla - Yes it is

Todd - I completely agree with you

Renee - I think so too 

Jan 02, 2012 07:57 AM
Anonymous
Bill Bob renter

For example, I am a renter and I lost my job. I continued to pay my rent but was continously late. The landlord waited to pay HIS morgage with my payment and it effected his credit score tremendously. I still offered to pay late fees but this does not fix bad payments history on his credit. I felt horrible even though it's his responsibility to pay his morgage. I don't want this to happen to others.

Mar 31, 2016 09:54 AM
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