Rent Abatement Explained
What is Rent Abatement?
It is quite common for apartment or multifamily leases to include rent abatement clauses. A rent abatement clause is a special provision in a lease agreement that allows tenants a period of time in which they do not have to pay their rent or must only pay a fraction of their rent. The activation of such a provision is typically contingent on the property becoming uninhabitable for any number of reasons.
A good portion of the time, rent abatements are granted due to damages caused by natural disasters such as hurricanes, tornados, fires, or floods. As a matter of fact, some states often require that rent abatement clauses be included in lease agreements due to the sheer likelihood of such an event occurring. Still, there are also cases where a lease agreement doesn’t include a rent abatement clause — nor is it required to — and is instead requested by a tenant due to unforeseen circumstances.
Regardless of the reason behind it, once a rent abatement has been granted, the unpaid rent (or the amount left over if only a portion was paid) is either taken on and paid directly by the landlord, or is paid by the relevant liability insurance — which is often the more likely of the two. In many cases, if a landlord does not repair damages to the property in a timely manner, the tenant may be entitled to a rent abatement for the full costs of the repairs to the property. Sometimes, if a tenant is displaced as a result of an uninhabitable property, rent abatements also cover the costs of temporary housing, including the costs of staying in a hotel, motel, or short-term rental during the repair period of the property.
Rent Abatements vs. Rent Concessions
Rent abatements are often confused with rent concessions. Unlike rent abatements, however, rent concessions are typically granted to tenants at the beginning of a lease to cover the period in which the property is being built or customized to meet the tenant’s specifications. Rent concessions are also used as incentives to entice tenants to sign or renew leases. Often, a landlord will offer rent concessions in the form of a free month’s rent or reduced rent for a set period of time to attract new tenancy. Rent abatements, in contrast, exist as a means of aid for tenants during difficult situations.
Related Questions
What is rent abatement?
Rent abatement is a special provision in a lease agreement that allows tenants a period of time in which they do not have to pay their rent or must only pay a fraction of their rent. The activation of such a provision is typically contingent on the property becoming uninhabitable for any number of reasons. A good portion of the time, rent abatements are granted due to damages caused by natural disasters such as hurricanes, tornados, fires, or floods. As a matter of fact, some states often require that rent abatement clauses be included in lease agreements due to the sheer likelihood of such an event occurring. Still, there are also cases where a lease agreement doesn’t include a rent abatement clause — nor is it required to — and is instead requested by a tenant due to unforeseen circumstances.
Once a rent abatement has been granted, the unpaid rent (or the amount left over if only a portion was paid) is either taken on and paid directly by the landlord, or is paid by the relevant liability insurance — which is often the more likely of the two. In many cases, if a landlord does not repair damages to the property in a timely manner, the tenant may be entitled to a rent abatement for the full costs of the repairs to the property. Sometimes, if a tenant is displaced as a result of an uninhabitable property, rent abatements also cover the costs of temporary housing, including the costs of staying in a hotel, motel, or short-term rental during the repair period of the property.
How does rent abatement work?
Rent abatement is a special provision in a lease agreement that allows tenants a period of time in which they do not have to pay their rent or must only pay a fraction of their rent. The activation of such a provision is typically contingent on the property becoming uninhabitable for any number of reasons. This is often due to damages caused by natural disasters such as hurricanes, tornados, fires, or floods. In many cases, if a landlord does not repair damages to the property in a timely manner, the tenant may be entitled to a rent abatement for the full costs of the repairs to the property. Sometimes, if a tenant is displaced as a result of an uninhabitable property, rent abatements also cover the costs of temporary housing, including the costs of staying in a hotel, motel, or short-term rental during the repair period of the property.
Sources:
What are the benefits of rent abatement?
The benefits of rent abatement are that it allows tenants a period of time in which they do not have to pay their rent or must only pay a fraction of their rent. This is typically contingent on the property becoming uninhabitable for any number of reasons, such as damages caused by natural disasters. In many cases, if a landlord does not repair damages to the property in a timely manner, the tenant may be entitled to a rent abatement for the full costs of the repairs to the property. Sometimes, if a tenant is displaced as a result of an uninhabitable property, rent abatements also cover the costs of temporary housing, including the costs of staying in a hotel, motel, or short-term rental during the repair period of the property.
Sources:
What are the drawbacks of rent abatement?
The main drawback of rent abatement is that it can be difficult to determine when it should be granted. In some cases, landlords may be reluctant to grant rent abatements due to the potential financial losses they may incur. Additionally, if a tenant is granted a rent abatement, they may be required to pay back the amount of rent that was abated at a later date. This can be difficult for tenants who are already struggling financially. Finally, rent abatements may not cover the full costs of repairs or temporary housing, leaving tenants to cover the remaining costs.
What are the best strategies for negotiating rent abatement?
The best strategies for negotiating rent abatement depend on the situation. Generally, it is important to be aware of the laws in your area, as some states may require rent abatement clauses in lease agreements. Additionally, it is important to be aware of the landlord's liability insurance, as this may cover the costs of rent abatement in the event of damages to the property. It is also important to be aware of the landlord's timeline for repairs, as this may affect the amount of rent abatement that is granted. Finally, it is important to be aware of any temporary housing costs that may be incurred as a result of the property becoming uninhabitable, as these costs may also be covered by rent abatement.
For more information, please see the following sources: