What should be the best course of action for a 44-space park with only 4 tenants who currently have natural gas lines, where one of the lines has recently failed, with an estimated cost of $4,000 for a new line from the meter to the tenant’s unit?
Additionally, considering that new tenants will not have the option of natural gas, and given the age of the existing gas lines, which are likely to fail in the future, which option is recommended:
Repairing the failing gas line.
Allowing tenants to install propane tanks and convert their appliances.
Gradually shutting down the gas lines as they fail and covering the cost of new electric appliances for the four tenants currently using natural gas?" We would only need to offer this to 4 tenants as the lines fail.
I’d have them switch to propane. Tanks are free, minimal cost to convert appliances. I would probably do it sooner rather than later since it’s only 4 lots, eliminate the potential liability as quickly as possible.
Switching to electric could potentially open up a whole can of worms with the homes’ electric systems, I would avoid that.
I agree, have them switch to propane asap.
I would give the 4 tenants a heads up that they need to switch immediatly. The cost will be their’s but it is minimal.
Some jurisdictions will not allow propane use if natural gas is available. Check your local laws.
I have found it worthwhile to fix gas lines myself, except for the final hook-up.
Digging the trench and installing PE piping is very simple. Why pay a plumber $100/hour/guy to dig a trench?
I pay them to make the connections and relight all the appliances.
If you do the job yourself, get a permit and use the correct size pipe. I like to go one size bigger than spec. ie if the spec is 1", I go 1.25".
We got a $100K bid for a significant gas line repair a few years ago. We rented a bobcat, installed all the lines, and hardware, and then paid the plumber to make the final connections and weld the joints. We saved $70K.
The plumber was pissed, but our pocketbook was very happy.
I’m sorry this is happening to you, this isn’t a fun thing to deal with. I would work hard to try and keep natural gas in the park- it’s a more affordable solution to heating during winter months compared to propane/all electric homes. I’m sure there is a 3rd party gas provider currently and they’ve written this park off as too much to maintain etc. with tenant delinquencies, etc. I had a similar situation and I fought hard and told the natural gas company I would guarantee any unpaid gas bills from my tenants in order for them to keep providing natural gas to the community, I call them monthly and get past due bill amounts and add these amounts on my tenants RentManager statements to make sure they don’t get too far behind. I also have deposits to pull these funds from if needed from when they moved in. I would try to repair gas lines there currently- or even better get the natural gas company to do this (what ours did in Ohio). Propane tanks for each would be my backup but this can be expensive, especially during winter months, to get refilled.
I too find this question unique as all of our acquired value-add parks have natural gas and when we come in to do in-fill the local gas companies are legally required to insure their gas lines are safe. We have had the mains and secondaries replaced at no cost to us by the gas companies without any push-back. Maybe we have just been lucky, but we also have never purchased a community with an economic occupancy of four (4).
If as @keelteam has suggested the provider is a third-party, I would hope you might have other options, or you have a plan for in-fill and rehab and convince the supplier that you have plans to increase occupancy that maybe they will take care of the currently existing deferred maintenance and as you bring in more homes that connect them on a case-by-case basis. I have also seen income sharing agreements between the City (such as when you pay to connect to city utilities) that you get paid back for your investment over time.
In the case where there is natural gas available, and if they are the only option and don’t want to do the work, I can not see how you can be prevented from bringing in propane at least temporarily until you get things turned around.
I also like @SDGuy suggestions, but I am still surprised because in all of our existing communities in Illinois, Minnesota and Oregon (where we have had gas line replacements), we were not allowed to touch anything gas related and the utilities were required to do it themselves. I guess we have been fortunate to be in the right locations.
