Sandwich Lease-option Repairs/Maintenance

[hannadang]

Hello fellow REIN members,

I have a property that the seller is willing to let me do a sandwich lease-option. We`ve got a tenant/buyer in place. The question is, who takes care of all the repairs/maintenance during the lease?

Thanks,
Hanna

 

[markl]

Hi Hanna,

Typically it would be your tenant. If there are major deficiencies you should have the seller rectify them or have it reflected in your purchase price.

I would still obtain an inspection on the property to help disclose any possible headaches.

You would be responsible for ensuring your tenant kept up all necessary repairs and maintenance.

Regards,

 

[hannadang]

Thanks for the advice Mark!

Hanna

 

[Dan_Eisenhauer]

I would also go through the property as part of your move-in inspection, taking photos as you go. Be sure to include the tenant in some of those photos.

You then have documentation of the condition of the premises at move-in. Keep the pix on a CD somewhere safe.

 

[hannadang]

Thanks Dan and Mark,

I have another question, what about bigger repairs such as leaky roof, furnace, and water heater, etc. Can we push this down to the tenant/buyer? Or is there a cap amount?

Hanna

 

[markl]

This all depends on your agreements and how you set expectations before the rental term.

All of our tenants are responsible for all maintenance. So the roof or furnace or other big ticket item they are responsible. We try to make sure there are no major repairs during the rental term if possible. But some of our tenants want the properties in spite of the deficiencies and we sign an agreement stating when and how the repairs will and need to be done and attach it as a schedule to the occupancy agreement.

Regards,