What is a Tenant Chargeback, and How Can You Avoid Them?

Acting as the landlord of a property can be tough, especially when there are damages or issues with the property that need to be corrected.

A landlord or owner of a property sometimes spends their own money on a repair which should have been charged to the tenant. This can create a messy situation that can be difficult to solve.

However, with a few quick tips, you can learn more about tenant chargebacks and how they can be avoided.

What is a Tenant Chargeback?

Sometimes when a tenant is living in a property, something on the property may need to be repaired. While the owner may initially cover this cost, when the responsibility of this bill belongs to the tenant, it leaves the owner trying to get their money back in what is known as a chargeback.

Chargebacks can be tricky, as tenants may argue about the bill when they receive it. Occasionally the tenant may even try to leave the property without paying the bill, leaving the owner to take the tenant to court or deduct the amount from their deposit.

How to Avoid Tenant Chargebacks

The best way to deal with chargebacks is to avoid them entirely. Of course, saying you should avoid tenant chargeback is often easier said than done. Below are some tips to help you avoid tenant chargebacks.

Tip 1: Make the Lease Clear

Spend the time to outline all costs the tenant could be responsible for in the lease. This way, when one of the situations occurs, the tenants won’t be surprised when the bill arrives.

These items could include lock replacement when a key is lost, extra trash pickup for bulk items, or broken window repair.

Establish in the lease that these items are the tenant’s responsibility, then attach the cost of the item, so they know exactly how much they are responsible for when one of these situations occurs.

Tip 2: Open Communication Channels

Sometimes, a tenant may think it is their responsibility to pay for an incident but be nervous to ask you about it. For example, your tenant may want to throw away a bulk item in the dumpster, but they are unsure if it will cost them extra.

Keep a channel of open communication with your tenant, such as a number they can text or an email where they can reach you. This will allow them to easily reach you and decide what they plan to do before they incur a charge on your bill.

Tip 3: Use Billing Software

It may be challenging to reach a tenant to tell them they have a chargeback, especially if the rent check is mailed monthly.

Invest in software to facilitate the process of collecting rent and messaging your tenant when they owe you money.

Ready to Avoid Chargebacks?

Chargebacks can be a hassle, and unfortunately, even with the above tips, you may still be stuck chasing your tenants for unpaid maintenance bills.

We can help you navigate the ins and outs of a property owner. Contact AMG Props today to learn more about our property management services and learn how we can help you.