How Rent Withholding Works
If your landlord has not met the responsibility of keeping your unit livable, you may be able to stop paying any rent to the landlord until the repairs are made. This is called rent withholding.
If your landlord has not met the responsibility of keeping your unit livable, you may be able to stop paying any rent to the landlord until the repairs are made. This is called rent withholding. Many states have established rent withholding, either by statute or court decision. To withhold rent, the problem must be serious (and not caused by you or a guest), you must be paid up in rent and in compliance with all lease terms, and you must have met all requirements (described below) for withholding rent. See your state law on rent withholding for information on your state rules.
Rent withholding can be done only in states that specifically allow it by law. If yours isn’t one of them, you’ll have to use another approach, such as repair-and-deduct, or face a termination notice and eviction lawsuit for nonpayment of rent. See the article Tenant Options if Your Landlord Won’t Make Repairs for other ways to get repairs made.
The term “withholding” is actually a bit misleading, since in some states and cities you can’t simply keep the rent money until your landlord fixes the problem. Instead, you often have to deposit the withheld rent with a court, a neutral third party, or an escrow account set up by a local court or housing agency until the repairs are accomplished.
In states that have not established an escrow scheme, your right to withhold the rent is somewhat indirect: When you don’t pay the rent and the landlord tries to evict you (which surely will happen), the statute allows you to argue in your defense that you didn’t owe any rent because the unit was unfit. If the judge or jury believes you, you will win the eviction lawsuit and will be allowed to stay.
Requirements for Withholding Rent
Here are the steps to follow if you decide to withhold the rent.
Step 1: Research the law. If rent withholding is allowed in your state (or under a local rent control ordinance), find out:
- what circumstances justify rent withholding
- whether you must give the landlord a certain amount of notice (ten to 30 days are typical) to fix the defect, or whether the response time must simply be “reasonable” under the circumstances, and
- whether you must place the unpaid rent in a separate bank account or deposit it with a court or local housing agency.
Step 2: Notify your landlord. Give your landlord written notice of the problem and your intent to withhold rent. Refer to your state’s law or statute that allows rent withholding and include a copy of it. Give your landlord a reasonable deadline. Send the letter certified and ask for a “return receipt.”
Step 3: Collect evidence. In case your landlord tries to evict you for nonpayment of rent, you will want to prepare your defense from day one. You’ll want to keep copies of all correspondence with the landlord, plus proof of how bad the situation was. Take pictures of the problem or ask a reputable and impartial contractor or repair person to examine the defect and give you a written, signed, and dated description of the problem and an estimate for repair.
Step 4: Repeat your request for repairs. If the landlord hasn’t responded satisfactorily to your first letter, give the landlord one last deadline—say, 48 hours or whatever period you feel is reasonable under the circumstances.
Step 5: File any court papers. Under some state laws, you must ask a local court for permission to withhold rent, provide compelling reasons why your rental is not livable, and follow specific procedures. You can get the necessary information and forms from the court or housing department that is named in your rent withholding statute.
Step 6: Deposit your rent in escrow. In some states, you may have to deposit your rent with the specified local court or housing agency or in a separate bank account. Even if your statute does not require this, we recommend that you deposit the withheld rent into an escrow account held by a neutral third party. This will dispel any suggestion that you are withholding rent simply in order to avoid paying it.
If a court or housing department is not set up to handle withheld rent, try asking a mediation service if it will establish an account for this purpose. Or ask your attorney to deposit the withheld rent in the attorney’s “trust account.” You can also set up a separate bank account of your own and use it only for withheld rent.
What Happens to the Withheld Rent
If the rent money is being held by a court or housing authority, landlords can sometimes ask for release of some of the withheld rent to pay for repairs. While repairs are being made, you may continue to pay the entire rent to the court or housing authority, or you may be directed to pay some rent to the landlord and the balance to the court or housing authority. When the dwelling is certified as fit by the local housing authorities or the court, any money in the account is returned to the landlord, minus court costs and inspection fees.
If your withholding law does not require you to escrow the rent and a court has not been involved, you and the landlord are free to make your own arrangements as to the distribution of the money. Once your landlord has made the repairs, he will probably expect full payment of the withheld rent. If you don’t pay up, you can expect your landlord to file an eviction lawsuit for nonpayment of rent.
Understandably, you may not feel like paying full rent, in retrospect, for the months you spent living in a substandard home while politely trying to convince the landlord to take care of business. In short, you may want a retroactive reduction in rent, starting from the time that the premises became uninhabitable. (Some states will limit you to a reduction starting from the time you notified the landlord of the habitability problem.) Reducing the rent after the fact is known in legalese as rent “abatement.” You may get a retroactive rent abatement through a court process or through negotiation with your landlord.
Rent Withholding Laws by State