Who Pays For Property Repairs – You or Your Management Company?
A common problem that arises without warning is property repairs. When you choose your management company, they will likely cover this issue, but not always. So if something does happen, who pays for property repairs – your or your management company? Especially if you use a company to help manage your Airbnb rental, here is a closer look at what the potential outcomes are and how they will likely be handled.
You or Your Tenant
The first question that has to be handled is whether the repairs are your responsibility or your tenants. In general, you will pay for a majority of them because they will arise from “general wear and tear”. At the same time, if the tenant takes some action that specifically causes the problem, then they will likely be responsible for it. There may be some shift in responsibility based upon how the lease is written, however it will always be in favor of the tenant not paying in most cases. The reason for this is simple – it isn’t their property so if they didn’t cause the damage, there is no reason that they should pay for it.
The Next Step
So once it is determined that your tenant isn’t responsible, the next question is will you have to pay for the repairs or will your management company. This is sort of a loaded question. In the end, you will be paying for it. As a general rule, no management company will take the financial responsibility of fixing “wear and tear” problems. The bigger question is how the payment will actually be handled.
There are two potential scenarios. The first is that the management company will make the actual payment to the people who do the repairs and will take that amount out of the payments the send you at the end of the month. The second is that you will make a payment to them to reimburse them for the repairs and they will send your full monthly payment to you for rent.
What About the Vendors
Since the property management company is choosing the vendors that will make the repairs, but not paying the bills then you may have some additional concerns. There have been cases where low quality management companies have over-charged the property owner for the repairs and then hired a low-cost, low quality vendor to make the repairs. Fortunately, as long as you hire a reputable property management company, this should never be a problem. If you have concerns about this issue then the first step is looking at the maintenance records. If you notice that the same problem has been repaired multiple times, then there could be some sort of issue – either a low quality vendor or inattentive property manager. You can also request the property management company to send you a copy of the invoice to double-check everything.
So who pays for property repairs – you or your management company? The short answer is you, although there could be several variations as to how the entire process will actually play out.
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