Can Your Tenants Legally Withhold Rent?

It’s like any other day as you go about your business running your property. Leases are being signed, rent is being paid on time, and everything is just right with your rental property — until that one phone call from a complaining tenant comes in. This isn’t any ordinary complaint. Emotions are running high, and to make matters worse, the tenant has just threatened to withhold rent until the matter is resolved.

Even when you feel you’ve done everything right — you’ve complete inspections, communicated well, and did your absolute best to satisfy every customer — you may run into a tenant who wishes to withhold rent. It can be tempting to brush these complaints off, but in some cases, tenants may have legal protection for not paying rent. Substandard living conditions, unresolved maintenance issues, or breaches of landlord responsibility are all situations in which tenants may reserve the right to stop rent payments.

In this article, we will look at why residents may withhold rent, the legal framework for rent withholding, and alternatives you can offer before a complaint escalates.

Tenant rights vary by jurisdiction, but there are common principles that apply no matter where your rental is located. Every resident has the right to habitable living conditions, essential service, and to timely repairs.

Many residents mistake the term withholding to mean that they can stop paying rent altogether, but that is not the case. In many states, renters are required to put their month’s rent into an escrow account (a kind of separate bank account managed by your bank) until the complaint has been resolved. Once the issue has been fixed, they are required to pay rent again for the duration of their tenancy, including paying all back rent due. In other states, if the complaint is surrounding a maintenance issue, residents can make the necessary repairs and deduct the cost from their rent, given they provide documentation on how much they spent. Each state has their own determination of how rent can be withheld.

In every state, residents reserve the right to stop rent payments if you have failed to fulfill your obligations as the landlord. Some scenarios include, but are not limited to:

A tenant cannot just legally withhold rent for any reason. In order to qualify to withhold rent, the rental must be deemed unsafe or uninhabitable, and the issue cannot be caused by the tenant or tenant’s guest.

If you have a tenant that refuses to pay rent for a reason your state recognizes as acceptable, the steps may look like this:

Tenants cannot withhold rent for complaints you are unaware of. In most cases, the resident will determine their rental is uninhabitable, and will have to show documentation (such as a repair request that went unanswered) that you have failed to address or remedy their concerns. Once a concern is brought to you, always take immediate action to remedy it. That could involve hiring a vendor, entering a maintenance request on the residents behalf, making reasonable accommodations, or purchasing new equipment.

Not every complaint can be resolved overnight, and in some cases, it may take several weeks to resolve the issue. The exact time frame you must make repairs is dependent on your local and state laws. Always communicate with the complaining resident exactly what the issue is, how you are resolving it, and the timeframe in which you expect it to be resolved. If you are at the mercy of a third-party vendor to complete work, express the urgency to your vendor while also letting your tenant know who you are working with, why you are working with them, and their schedule for completing repairs. If something needs to be rescheduled for any reason, always promptly communicate with the complaining tenant.

If the tenant can prove that you failed to satisfy your legal obligations, they may then proceed with legal counsel for withholding their rent until the appropriate repairs have been made. Once a tenant has withheld rent, always seek legal advice for your next steps. 

If you wish to avoid further escalation with a tenant who wishes to withhold rent, there are a few steps you can try to take:

Navigating situations where tenants choose to withhold rent can be challenging and time consuming. It’s crucial to know what your local and state laws determine as acceptable reasons for tenants to withhold rent, and to recognize the burden the complaint may have on your resident. Approach every complaint with understanding, communication, and adherence to legal requirements. By addressing tenants' concerns promptly, you can mitigate these situations arising, while maintaining a healthy tenant-landlord relationship.