This section is from the book "Practical Real Estate Methods For Broker, Operator & Owner", by Thirty Experts. Also available from Amazon: Practical Real Estate Methods for Broker, Operator, Owner.
While the usual lease requires the tenant to make certain repairs and leaves others to the owner, it is not always the best of policy to hold strictly to the letter of the lease. This is particularly the case when failure to repair a defect may cause extensive damage either to another tenant or to the building itself. In a certain building there was a leak in one of the flush tanks, caused by the act of the tenant. The tenant was notified to fix it. He refused. The owner would not do anything, because the lease placed responsibility on the tenant. In a very short time the water had taken a strip of plaster 25x50 feet off the wall and had ruined a large quantity of merchandise belonging to the tenant below. A lawsuit followed, which was decided against the owner. If he had fixed the leak after the tenant's refusal, he would have had a case against the lessee for the cost of the repairs. Therefore, after a tenant's refusal to fix anything, whether it is in the lease or not, it is up to the owner to fix it. Then the owner can endeavor to recover from the tenant.
Plumbing must never be left unrepaired.
Boilers out of condition are dangerous to the building and its tenants.
Elevator machinery also should never be neglected. A car might run on for several weeks with a frayed cable or some other faulty condition. Then again it might carry half a dozen people to death, through the negligence of those in charge of the building, and the liability, both moral and monetary, would be tremendous. In connection with elevator repairs in a busy building, it is frequently wise policy to have the changes made at night, even if the charge for night labor is higher. Few things irritate a tenant more than to have his business crippled for a day because the owner has allowed the elevator repairs, that could have been made at night, to go over until business hours
In the case of all repairs, it is most important that the agent himself look after the property, inspect it personally every once in a while, and keep a definite picture of its condition in his mind. He should also have actual general knowledge, if not technical knowledge, of what repairs will cost, and be able to judge their real importance to the property. Good mechanics should be employed and proper materials used. Even if there be a competent superintendent, the agent should himself have a look at important repairs, and not rely wholly on reports of others. Naturally there should be the strictest economy, but where saving in this direction affects the building detrimentally, saving on repairs is really future extravagance. The agent, because he visits the property and knows the tenants, is generally a safer arbiter than the distant owner.
In case of petty repairs, it is sometimes good policy to make repairs whether the terms of the lease require you to do so or not. It pleases the tenant, because it saves him the time and trouble of hunting up a mechanic.
The practice of an agent's accepting a commission from contractors cannot be too strongly condemned. A study of such bills will generally reveal the fact that the owner paid a fair price for the job plus the agent's commission from the contractor. It is far better for the agent to refuse the management of a building than to make a bid so low that he is forced to take a rake-off on repairs. Frequently agents, in competing to get a building, name too low a commission with the full expectation of making up on contractor's bills.