| When you purchase rental income property, you | | | | full rent again. He is living on a different income, |
| may decide to maintain it on your own. Perhaps | | | | and cutting back may not be as easy as either of |
| you know a few things about maintaining heating | | | | you thought. Will firing your live-in handy man |
| systems, how to paint and plaster, and a little | | | | cause an unanticipated eviction for non-payment |
| carpentry knowledge. You figure, you have only | | | | of rent? |
| four apartments to care for, you live in one of | | | | Here is where a lease and employee contract is |
| them, and you can handle it. | | | | mandatory. You have created two relationships, |
| Forty-five percent (45%) of homeowners (U.S. | | | | tenant and handy man. When you terminate one |
| Census Bureau) spend from one to eight hours a | | | | relationship, it will have an impact on the other |
| week devoted to the maintenance and | | | | relationship. Outlining the relationship before you |
| management of their property. Some | | | | hire him in writing will help. Still, you will have to |
| homeowners either do not have the time or the | | | | defend both relationships in housing court if the |
| experience necessary to put toward their | | | | tenant cannot or refuses to pay the full rent. |
| property. | | | | You may also have your other two tenants |
| Let us say you are currently getting a good profit | | | | taking sides. If they liked him as the handy man, |
| from the property. Your own job or business is | | | | they will resent his firing, unless it was for |
| keeping you busy. So, you think it would be great | | | | something that had a direct impact on them. If |
| if you could get someone else who lives in the | | | | they didn't like the handy man, well, he knows |
| building to clean and do repairs. The tenant would | | | | where all the bodies are buried. Either way, your |
| be compensated by a small reduction in the rent. | | | | handy man tenant may decide he has a chance |
| This way, you can devote more of your time to | | | | fighting the eviction. |
| your business or career, have someone who is | | | | Before you begin any legal action, go over your |
| always on the property, and can clean, shovel, | | | | duties as a landlord and employer of the former |
| mow, and take care of whatever repairs are | | | | handy man. Go over the lease and employee |
| needed. What could possibly go wrong? | | | | contract. Review and anticipate any potential |
| Well, what if your live-in handy man is not what | | | | problem that may come up in court. For example, |
| you expected? As a tenant, he is great, and he | | | | did you provide the handy man with a written list |
| appreciates the cut in rent. But, after a few | | | | of duties? Do "the courtroom test". If you were |
| months, working his own full time job and taking | | | | hearing your story, would you find a judgement |
| care of the building prove to be too much for him. | | | | for you, or for the tenant? |
| In another scenario, what if you decide there is | | | | Did you pay the appropriate state and federal |
| not enough work to be done at the property to | | | | witholding taxes on the handy man? If you hired |
| justify the amount of rent that is deducted each | | | | the handyman as an independent contractor, did |
| month? | | | | you give him an annual Form 1099 tax report?If |
| So, you let him know that he will no longer be | | | | you pay money or forgive all or a portion of the |
| your handy man. You give him written notice of | | | | rent, did you declare the rent he did not have to |
| his termination as the handy man, and a | | | | pay as his income and your operating expense to |
| thirty-day written notice that he will have to pay | | | | the IRS for each year of service? |
| the full rent on his unit. He may agree that he | | | | It is not always easy to have a tenant become |
| couldn't handle the property; he may not agree. | | | | part of your real estate investment. If you are |
| There begins one problem, the job termination. | | | | hesitant about anything, contact your attorney |
| If you cut $100 a month from his rent to care | | | | and/or your accountant before going to court. |
| for the building, he may not be able to cover the | | | | |