A Popular (and Surprising) Living Option for Retirees
Where to live is one of the biggest decisions retirees face.
Should you keep the family home? Downsize to a smaller property? Or, rid yourself of homeownership altogether and rent?
By the time many of us retire we’ve become so accustomed to owning a home that the idea of renting might never cross our mind.
Since 1990, however, homeownership has declined among 55-64 year-olds, and experts expect this trend to continue in the coming years.
Sure, owning a home in retirement has certain benefits, like the ability to capitalize on tax breaks and tap the equity you may have built up.
But homeownership comes with its own headaches too. In addition to paying off a mortgage, you have to maintain homeowner insurance, pay property taxes and budget for ongoing maintenance.
All reasons attracting retirees to renting instead of buying. If you plan on selling and decide you’re going to rent in retirement, here are some things you should know as a tenant.
There’s a misconception that renters don’t have many rights, that the landlord holds all the power. This is not true, in fact, you have rights even before you give your completed rental application to a prospective landlord.
Tenant rights vary state to state, but regardless of where you live, you will always have the right to protect your safety, health, and financial wellbeing should your landlord try to exercise any illegal renting practices.
Here are your basic rights as a tenant and what you can do if your landlord violates any of these:
The Fair Housing Act
First passed in 1968 and amended since, prohibits discrimination based on race, color, origin, religion, sex, familial status, or disability. The Fair Housing Act applies to both renting and selling real estate. Therefore, you cannot be turned down for tenancy based on any of the protected classes mentioned.
In some states, like Massachusetts, this protection also applies to tenants requiring federal or state subsidies to pay all or a portion of their rent.
If you believe you’ve been discriminated against, contact the Department of Housing and Urban Development (HUD) to file a complaint.
All leases should allow for the right of “quiet enjoyment.” What this means is you, as the tenant, have the right to reasonable freedom from being disturbed by your landlord.
For example, if your landlord wants to enter your apartment, by law they need to provide you with reasonable notice before entering the premise.
Unless there’s an emergency, like a fire or natural disaster, you’ll always have this right.
Habitability and Repairs
One of the big benefits to renting over owning a home in retirement is relieving yourself of the burden of maintenance and repairs. If the furnace breaks down in the dead of winter and requires a $1,200 repair, it doesn’t come out of your pocket.
Landlords have the responsibility of making sure your unit is safe and habitable, as well as fixing any major problems that make the property less livable.
An uninhabitable rental, such as one without heating, proper plumbing, or electricity, is one you can stop paying rent on, or make the repairs yourself and deduct the expenses from future rents.
But be careful because there are some things tenants have the responsibility to maintain. Like keeping the rental clean and sanitary, safely operating gas, electrical, and plumbing appliances, taking out the trash, repairing any damage caused by guests or a pet.
For everything else in between a major and minor fix, it’s a bit of a gray area as to who the responsibility lies under. Think leaky faucets, burned-out light bulbs, squeaky floorboards.
Some landlords can be notoriously stingy or really slow to make these repairs.
It’s best to get in your landlord’s good graces by taking care of some of these minor fixes yourself.
But if the repairs needed are serious and relate to the unit’s basic fitness for living, you should request repairs.
First notify your landlord, in writing, of the requested repair. Then give him or her a reasonable amount of time to make the fix. Most laws state 30 days as a reasonable period of time, but 2 days might be reasonable if the issue is broken heat in the winter.
What If the Landlord Doesn’t Follow Through on Repairs?
You have two options:
Make the repairs yourself and deduct the cost of repairs from your rent, so long as the amount doesn’t exceed one month’s rent.
You can abandon the unit.
If the problem is so bad that you can’t live safely in the rental, you have a legal right to vacate the apartment and stop paying rent.
This would obviously be a last ditch effort but if the apartment is clearly unfit to live in and your landlord has made no effort to remedy the situation, the law will usually favor you as the tenant.
Most rentals require a security deposit should any damages occur during your time as a tenant. Most states have a statutory deadline for how long a landlord has to give you back your security deposit after you move out.
In California, for example, your landlord has up to 21 days to refund your full security deposit, less deductions for specified damages.
In Virginia, North Carolina, North Dakota, Ohio, and Pennsylvania, a landlord has 30 days.
Ensure that your landlord has your correct forwarding address or email so you get your money back on time.
What “Rights” Don’t You Have as a Tenant?
There’s a big difference between a legal right and a privilege. Rights typically pertain to nondiscrimination, habitability and safety of an apartment and tenant’s privacy.
Everything else is negotiable.
For instance, you do not, by law have the right to on-site laundry, a working dishwasher, or an off-street parking spot.
These perks can be promised in your lease, but your “right” to these amenities really depends on how your lease is worded. Unless your lease explicitly guarantees you a parking space available 24/7, 365 days a year, you might not have strong recourse if the landlord’s son starts parking in your spot.
That’s why it’s so important you put everything down in writing.
Landlords that try to tell you a lease is unnecessary and give off a relaxed, easy-going vibe are also usually the ones who start to cause you, as a tenant, problems later on. Avoid situations like this by signing a lease that enforces certain responsibilities and specifies terms of the landlord-tenant agreement.
And, if any problems arise, make sure you document everything in writing. All your communication with your landlord should be written down somewhere, including payments and requests for repairs.
If you decide to rent in retirement, it’s worth looking up your state laws related to renting and fair housing, visit rentlaw.com.
Each state publishes a Tenant’s Rights Handbook that usually comes as a downloadable PDF from either the Department of Real Estate or the Department of Consumer Affairs.
If you run into a situation where you’re unsure how to proceed with your landlord, contact HUD. HUD offers free counseling related to renting in all 50 states.
As a renter, you have a lot of rights, most people just don’t realize it. To ensure you maximize the enjoyment of your rented space, get to know what rights you have and don’t have.
To a richer life,
— Nilus Mattive
Editor, The Rich Life Roadmap