Barter Trade for Rent Lease : ezLandlordForms

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Kim Y

started a topic over 10 years ago

We have a prospective tenant that we want to do a trade for maintenance and repairs for rent. I want to have a month to month lease in place. Do I use the same lease forms that I use for my standard rent paying tenants and then just spell out details regarding expectations for the rent trade or is there a different lease form I should be using.

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Bob R

said over 10 years ago

You’re asking for trouble. If you believe that by having an agreement you’re protected, you’re not. Consider collecting rent and paying tenant after rent has been collected and job has been completed. If you think that you don’t have to report any rent, IRS requires you to report barter value. -----Disclaimer: Since I’ve been answering a lot of questions, I thought I would make the following statement. I’m not affiliated with EZlandlord Forms. I’m just here (not sure how long) to help those that have questions. Having 40+ yrs with Rental Property and done well, it’s my way of “Pay it Forward (check out the movie).” However, it is up to you to become familiar with your State/Local laws. I always like to know if the suggestions I offer are helpful. Feel free to comment anytime. Thanks in Advance. BTW...check out the Rental Property Organizer at Simp-List.com. Free Trial Download with data.

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John C

said over 10 years ago

First of all, if you in any circumstance enter into a month to month agreement with any Tenant, you should procure, provide and make the agreement subject to all of the rules and regs of a lease, in compliance with and subject to all state, local and municipal ordinances. My only month to month Tenants have been residents who had uncertain circumstances at time of renewal, usually employer related with possible relocation on the horizon. I never rent a unit out that way. I agree with Bob that an arrangement is fraught with potential for an array of future problems for you. I once had a contractor working for me who later became a resident. Even with a lease my experience was not good. There are many horror stories I could share. A common occurrence was settling by bartering work which in some instances was promised and not delivered on time and in others (and there are a multitude of ways in which this can happen) I was charged for work which was nerver performed. My advice: Take a pass and find another renter. If you want to use him as a maintenance man, pay as you go and only after the work is completed and verified.

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John C

said over 10 years ago

BTW: Another point Bob brought up is well worth re-enforcing. Bartered work must still be accounted for as value in exchange for rent with the IRS. In my case, I not only paid for services not rendered, I paid tax too. I wouldn't repeat my mistake and I strongly encourage you to avoid making it yourself.