Compensating Tenants for Air Conditioning Outage


#1

Friends -

I’ve had an air conditioning unit go out on one of my rental homes. It’s been 90 degrees and it took my (very busy) A/C guy two days to fix their problem (compounded by my manager’s slow response). The tenants could not stand the heat, so they went to a motel for two nights.

I want to do right by them, but this is the world of mobile homes after all, and they just aren’t the perfect dwelling unit.

Should I reimburse the tenants for the two nights motel stay? Or reduce their rent by two nights’ worth of rent, or do nothing, or what would be fair?

Thanks,

-jl-

P.S. They were late with the rent this month and still owe their late fee. Perhaps I could just waive that…


#2

I had nearly the exact same scenario happen about a yr ago on my rental MH. An older man (the neighbor to my tenant) was working on his 4 wheeler and forgot to take it out of gear before cranking. Needless to say once he cranked it, it took off, demolishing the a/c unit to my tenants mobile home. The man offered to replace the a/c and pay for the hotel costs until a/c was fixed…ended up being 3 nights I believe. Of course I was not the one paying for it so I was perfectly fine with him paying hotel costs because it kept my tenant happy. Well a couple months ago the a/c quit working and since tenants have already been boarded once, they thought it was standard practice. These particular tenants have always paid on time and never given any trouble. So, though we weren’t enthused about paying the hotel cost since it was on our dime this time, we did to keep them happy. Since then we have come up with a better idea…buy a window unit and offer to let them use it while the a/c is out.

Kevin Long


#3

You guys need to get a more responsive HVAC repairmen. There is nothing that takes more than 2hrs to repair or replace. This whole hotel issue is a non issue if you get the ac fixed or replaced. Time is of the essence on HVAC or water,sewer, refrigerator problems.


#4

I’m with Shawn on this one. I have never had an hvac guy take more than a few hours to fix or replace anything, including entire furnaces and/or heatpumps. Hours, not days.

We need reliable heat and air guys and unfortunately this usually means they get expensive over time.

At the very least I would seek to buy an asset such as a portable window a/c unit to offer for the time the tenants a/c is down (at best).

I think it is a terrible trend to begin that your tenants think that you will foot hotel bills. I have only had one or two tenants ask this of me over the years and each were explained that that is simply not going to happen. We deal quickly with problems. If the problem is within our control we get it fixed pronto. If the entire area is hit with a problem then the tenants wait it out like the rest of us.

What I think you may run into was the professional deadbeat tenant scenario whereby they first obtain the hotel and then call you the next day to let you know they had a problem and want you to foot the bill for their hotel stay/vacation. Not going to happen.

If something extraordinary were to occur you would first be the one to decide upon housing and I would suggest that if you actually decide to pay for a hotel that you limit your exposure.

You would be ashamed of what some seemingly nice folks will do to hotel rooms and expenses when they think someone else is paying. Even folks who have attended MOM’s because of financial assistance from people who frequent here and wanted to help out have run up hotel expenses in the hundreds of dollars and split leaving the kind investor who helped them, to now have to pay for that cost as well.

My point is fix it quick and have the systems in place to do so. If you feel you have to pay for a hotel (again I don’t think this should become necessary) then do so by not exposing yourself to additional expenses. Maybe you find out what the most reasonable hotel cost is and pay that night’s price to the tenant. They can sleep wherever.

I find that most of my tenants will stay with friends and family if necessary. For example if power is out to an entire town or community due to a devastating storm.

Tony


#5

You are right. We should be looking for more responsive a/c guys…The one we use most often will usually be out within a couple hours. These two cases happen to be over holiday weekends. Tony you brought up a good point regarding the liability I would have by putting the hotel bill on my credit card (which I did)! Hopefully we will not have to resort to paying hotel bills in the future though due to more effective and efficient ways to resolve the issue. Thanks!

Kevin Long


#6

Kevin,

That hidden risk has burned more than one investor.

The beauty is that once we see that instead of paying for a hotel room for a night or 2 we could use that same money, buy a window a/c unit (that we get to keep) with no more financial liability for us and solve the problem.

A couple of days later we drop by and pick up the a/c unit. That unit is now paid for so you won’t have to buy another nor will you be rushing to pay for a hotel or you tenants.

If it makes you feel even better, create a sheet that says you are loaning the a/c unit to these tenants and that if it is not returned they owe you $xxx and perhaps you include the brand name, model and serial number.

I know Lonnie himself had an a/c unit stolen may years ago by a tenant but because he did not have the serial number etc. the police would not let him prosecute. Just another added protection. That form would only take a minute to create. It would basically look like a receipt for the a/c unit when the tenant takes possession of it.

Tony


#7

We lost a bunch of central a/c units to the flood. I have come to the conclusion that it is easier to replace the central unit with a window unit in the central portion of the mobile home. If the tenants want a/c in the bedrooms they can have us install them for an upcharge. So far no major complaints. If they stop working they are easy to replace and relatively cheap. I have found it can be hard to get a repair person into the park in a timely manner. The units typically go down when everyone in the area needs their units serviced.


#8

but I have read much lately on the forum about how they are the answer to all A/C problems, and I disagree. In order to get a window unit large enough to do the job the landlord will need to deal with window modification, sealing up the gaps, bracing the unit, making provision for rain water to not get in the house, making provision for the condensation water to stay out of the house, running a 220v electrical service. then come winter more work is required to avoid massive heat loss. When you are all done, you have noisy, uneven, and expensive A/C(they take more electricity than C/A). On top of these issues, they don’t give window units away, and anyone would consider C/A an upgrade worth more $$ in rents than a window shaker. Unless I have set my goal of being the cheapest housing in the market, (so why bother with it at all?) I’ll not fool with window A/C.


#9

Shawn,

Just to clarify, I was not encouraging landlords to provide window a/c units as a standard practice or permanent ammenity. I simply wanted to point out that providing hotel accomodations on the landlord dime was not my opinion of a viable option, and that in fact I believed it caused greater liability.

A window a/c unit for a day or 2 on loan to the tenant while the a/c repair guy was busy was all I was saying. But even then I felt it necessary to find a bettter hvac guy than one who takes days to come out. Bear in mind I live in a very moderate climate so mileage on this issue will vary.

I have recently had heat pumps stolen that insurance would not cover because it was a rental property. I had just put the unit in about 10 months before.

Since the national standard for heat pumps went to a 13 seer rating, the costs per unit have gone through the roof. I will not replace these units at a cost of almost $2k with install. Especially since they so easily grow legs and walk away.

If a tenant wants a window unit they will have to provide one. If I find a common problem with one home then I may run a dedicated line to that window location.

In a nut shell, let tenants handle problems as best they can. These are blue collar folks with blue collar contacts. If they can’t fix the problem then we may have to but not by exposing ourselves to extra costs and/or establishing a pattern of providing hotel rooms whenever a tenant gets the notion.

Tony


#10

I would offer to waive the late fee and call it even.

Mike


#11

Tony,

Just as a side note, I have been getting some great deals on Craigslist on 10 SEER equipment. Granted it is slightly used but you can’t beat the price difference. I picked up 7 year old A/C unit for $200 and a full system, 90% efficient furnace and A/C for $500, I think it was 5 years old. I installed the A/C in one unit and the furnace in another. Both purchases were perfectly working systems.

I think people are being sold on the new standard and dumping the old units.

Keith


#12

We had some luck with a couple of units but after that we had to go the scratch and dent 13 seer route.

Good idea with craigs list scouting for these units.

Tony