Habitability Rules and Laws

By Josh Kattenberg

“Habitiability” refers to the idea that tenants have a right to basic services if they were included in the property they are renting. For example, the landlord does not have to pay for utilities, but he must make sure that the furnace and water heater function properly.  South Dakota law gives tenants the right to withhold rent and fix the broken furnace, if the property owner does not do so within a reasonable time period. By not fixing things that should be fixed, property owners put themselves at a disadvantage. For example, suppose the furnace does not work. Because the property owner does not fix the problem, the tenant takes it upon himself to get it fixed. However, perhaps the furnace is quite old and really should be replaced. Instead, the tenant authorizes an expensive repair and pays for it out of the rent. The tenant does not care so much about the long term cost of such an action, only the fact that they now have heat. Had the property owner dealt with the problem, they could have had a new furnace for a little more than the bill for fixing the old one.

A second cost of not fixing maintenance issues right away is that the tenant becomes disgruntled and unhappy. At the first opportunity, they will leave to find somewhere better to live. Turnover always costs the property owner money and they still have to fix the problem. Hiring a good property manager is one way to make sure maintenance gets done quickly and in accordance with the law. Ultimately, a property manager saves the property owner money by keeping tenants happy, thereby reducing turn over.