Water Damage - Is this considered tenant responsibility?

Los Angeles County, California
General Landlording & Rental Properties
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Water Damage - Is this considered tenant responsibility?

Jon A.
Member since 2023 · 5 posts · 1 vote

Hello everyone, I'm looking to get some advice on this situation with a tenant in my property. 

I own a condo unit and this tenant has been living there for a few months now. Soon after they moved in, they asked me if I can replace a faucet handle in the bathroom because it was hard to turn on/off. I did not have any issue using it before they moved in and so I told them the replacement wouldn't be needed. The tenant asked me if I could get a material to fix the issue using a lifetime warranty I had, so I did and they received it not too long after.

The issue happened when they decided to replace the handle by themselves. They told me they had shut down the water first (I had told them how to when they moved in, in case if they needed to do,) but apparently it did not shut off the water pipe that was connected to the faucet. They called me when the water started to leak and it took a few hours to have a plumber come in and stopped the leak. The incident caused damages on walls in my unit and a unit below.

The tenant has a renter's insurance so it covered the damage unit below mine, but it did not cover for my unit.

In order to fix the walls it required a partial demolition, drying process, and restoration. In total it's almost $20k.

I believe my tenant should be responsible for the cost because the incident happened when they tried to fix the faucet without getting a professional's help. However the tenant thinks I should use my property insurance for structural repairs, that I should have offered to fix the faucet at the first place that it was supposed to be a landlord's responsibility.

Would you please share your thoughts and advices please? The bathroom has not been restored yet and it's been a few months the tenant has not been able to use it (they have another bathroom to use in the unit, at least.) I really appreciate for your time and help.

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Greg ScottPro Member
Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
3y

First and foremost, you absolutely should make an insurance claim.  Why are you buying insurance if it isn't to use it when you have a loss?  I've made about 10 insurance claims on various kinds of properties, in various states, totaling over $2M.  Given your circumstances, I'd make a claim in a heartbeat. It may get denied, given the circumstances, but it is silly not to try.

Assuming insurance covers it, you are then arguing over the deductible.  You should check with their insurance again.  Often your deductible is covered by their renters insurance.  Also, if you know how to make a claim properly, a claim can legally cover more than just the cost of putting it back to its prior condition.  Get the help of a Public Adjuster.  (google the term)

Try to get insurance to cover 100% of your costs.

If you end up getting in a legal battle, the outcome may be a coin flip.  Denying the repairs without visiting the property after the repair request casts doubt on you.  Sending the parts to the resident without you coordinating the professional installation also makes it look like you were implicitly approving they do the work.

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  • Greg ScottPro Member
    Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
    3y

    First and foremost, you absolutely should make an insurance claim.  Why are you buying insurance if it isn't to use it when you have a loss?  I've made about 10 insurance claims on various kinds of properties, in various states, totaling over $2M.  Given your circumstances, I'd make a claim in a heartbeat. It may get denied, given the circumstances, but it is silly not to try.

    Assuming insurance covers it, you are then arguing over the deductible.  You should check with their insurance again.  Often your deductible is covered by their renters insurance.  Also, if you know how to make a claim properly, a claim can legally cover more than just the cost of putting it back to its prior condition.  Get the help of a Public Adjuster.  (google the term)

    Try to get insurance to cover 100% of your costs.

    If you end up getting in a legal battle, the outcome may be a coin flip.  Denying the repairs without visiting the property after the repair request casts doubt on you.  Sending the parts to the resident without you coordinating the professional installation also makes it look like you were implicitly approving they do the work.

    8Reply
  • Kevin Sobilo
    Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes
    3y

    @Jon A., I agree with @Greg Scott especially the last portion of his response where he says that providing the parts and not coordinating a professional repair implies that you intended to give permission for the tenant to do the repair themselves.

    This sounds like a property management issue in how it was handled from start to finish not a tenant responsibility/liability issue. 

    1Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y

    Is is tenant negligence. Before using your own insurance I would exhaust all options with getting the money from the tenant. 

    0Reply
  • Kim Meredith HamptonBusiness Member
    Real Estate Broker · St Petersburg · Member since 2014 · 2k+ posts · 2k+ votes
    3y

    Never ever let tenants their own repairs especially when it comes to plumbing, electrical etc…

    secondly, you need to file on your own insurance policy

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  • Greg ScottPro Member
    Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
    3y
    Quote from @Eliott Elias:

    Is is tenant negligence. Before using your own insurance I would exhaust all options with getting the money from the tenant. 

    Why would you NOT make an insurance claim?  Particularly on a Condo, there is almost no downside to doing so. 

    The odds of collecting from the tenant are slim.
    0Reply
  • Andrew B.
    Rockaway, NJ · Member since 2016 · 2k+ posts · 2k+ votes
    3y

    This is a perfect example of someone stepping over dollars to pickup a penny. You screwed yourself by telling the tenant you wouldn't maintain your own property, and putting the onus on them. Whether you like it or not, you're responsible to maintain the property and all its elements. Faucets can and will wear out over time. Just because it was functional when you gave it to them, doesn't mean it will always be that way. You should apologize to the tenant for creating the situation, then ask them to kindly never try to fix anything on the property again, and make a promise to them that you will maintain it better in the future. 

    7Reply
  • Wayne YahnkePro Member
    Rental Property Investor · California, CA · Member since 2018 · 50 posts · 14 votes
    3y

    This is the tenant responsibility all the way. The tenant renters insurance has verified that for you by covering the repairs of the unit below. Your home owners policy should kick in here

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  • Tom DegroodtPro Member
    Evans, GA · Member since 2016 · 121 posts · 65 votes
    3y

    We tell our tenants that water is EVIL.  Any plumbing issues get the highest priority.  We have, and will, spend money on plumbing issues without batting an eye.  I never want my tenants working on plumbing.  We had 3 days of freeze warnings here in Georgia at Christmas this year.  I reached out to every tenant before to warn and ask them to take precautions.  I followed up with each one after the weather went back to normal to verify there were no issues.  We had 2 homes that had issues with outside hose bibs.  We paid thru the nose to have plumbers complete the work, but since we have them work on all things thru the year we were bumped up in priority.

    We had an investor friend who was not proactive.  Their tenant was away until January 2nd.  Pipes in the ceiling likely froze and broke on December 24th and water rained down until the tenants came home on the 2nd....  Very bad mess for all involved.

    2Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    3y

    I guess you knew the tenant was not a plumber and you let them install the handle nonetheless, so there is that. We don't even let tenants install a TV mount, it has to be done by one of our contractors. 

    4Reply
  • Jon A.
    OP
    Member since 2023 · 5 posts · 1 vote
    3y

    Thank you all for your responses. So far the tenant paid for the plumbing service when the accident happened (about $450) and also a part of cost for the demolition (I informed them I paid a half of the fee from their deposit and asked them to pay the rest, which was about $1400). Should I take a responsibility for these fees also? I honestly thought the tenant should take care of the fees, but I'm not trying to make them pay for anything they are not responsible for. Thank you again for all your help.

    0Reply
  • Richard F.
    Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
    3y
    Aloha,

    As a Condo owner, you must submit the claim to your insurance company. They can then coordinate with BOTH the Renter's insurance AND the Condo Association Master Policy. Your Condo Declaration and governing documents will be primary in determining which insurance pays for what. Each of these policies has a deductible and a max payout for certain events. IF you have properly informed your Insurance Agent of the details for the Master Policy, they should mesh properly. If not, you could be on the hook for huge deductibles that many Associations are changing to in order to reduce their Premium cost. (Just like you choose your deductible on vehicle insurance). You need to verify and update every year.

    In a condo especially, NEVER allow unlicensed and/or uninsured people to work on plumbing or electrical, the potential liability is too great regardless of insurance.
    1Reply
  • Bud Gaffney
    Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    3y

    Insurance claim. And move on.

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    3y

    @Jon A. appears you've discovered property management isn't as easy as everyone makes it out to be!

    Why didn't the tenant's Renters Insurance cover the damage to your unit? 

    The answer may impact how you move forward.

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    1Reply
  • Jon A.
    OP
    Member since 2023 · 5 posts · 1 vote
    3y

    @Drew Sygit

    This was a letter I received from the tenant's renters insurance:

    The policy purchased essentially provides coverage for damage due to the 16 perils outlined in your policy, things like Fire, Theft, Smoke, Explosion, and more. Unfortunately, damages to Property rented by an insured is not covered under this policy. I have attached the policy language below:

    SECTION II – LIABILITY COVERAGES 

    A. Coverage E – Personal Liability If a claim is made or a suit is brought against an "insured" for damages because of "bodily injury" or "property damage" caused by an "occurrence" to which this coverage applies, we will: 1. Pay up to our limit of liability for the damages for which an "insured" is legally liable. Damages include prejudgment interest awarded against an "insured";

    SECTION II – EXCLUSIONS

    F. Coverage E – Personal Liability Coverage E does not apply to: 

    3. "Property damage" to property rented to, occupied or used by or in the care of an "insured". This exclusion does not apply to "property damage" caused by fire, smoke or explosion;

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    3y

    @Jon A. have never seen a Renters Policy with this exclusion!

    Lesson learned, to not accept similar in the future.

    If you file a claim with your insurance company, be sure to give them the Renter's Insurance policy info as they may be able to get a different result than you.

    [email protected]248-209-6824
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    1Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    3y
    Quote from @Greg Scott:
    Quote from @Eliott Elias:

    Is is tenant negligence. Before using your own insurance I would exhaust all options with getting the money from the tenant. 

    Why would you NOT make an insurance claim?  Particularly on a Condo, there is almost no downside to doing so. 

    The odds of collecting from the tenant are slim.

     I would exhaust having the tenant pay first. Save me the deductible. 

    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    3y

    file insurance claims with public adjuster involved if they're willing to help.

    0Reply
  • Jon A.
    OP
    Member since 2023 · 5 posts · 1 vote
    3y

    Thank you everyone for your responses.

    0Reply
  • Jon A.
    OP
    Member since 2023 · 5 posts · 1 vote
    3y

    Would I have a chance of winning if I take this matter to court? Has anyone had experience sueing their tenants?

    To be honest I didn't mention one thing from my original posting. This is my first time renting a place and obviously I need to learn a lot. When my tenant moved in with their renters insurance, I thought that would replace my property insurance so I cancelled it on the same day theirs kicked in. It took 6 weeks until I found out I need to have my own property insurance so I have it now, but the water incident happened during the 6 weeks period. So if my tenant doesn't pay for the damage I need to pay it out of my own pocket. My tenant wanted to have a mediator involved but I refused it after I found out there would be a multi session procession and first one needs to be three hours long - I did not want to request a half day off of my work.

    I emailed my tenant today and gave them three options - either they pay the fee, they don't pay and I'll start an eviction process and civil lawful for the money, or sign a new contract that they will leave 2 months earlier than the original contract so I can keep their 2 months deposit. 

    0Reply
  • Tom DegroodtPro Member
    Evans, GA · Member since 2016 · 121 posts · 65 votes
    3y

    I see that you are on the West Coast.  Typically where I am most renters are renters because they don't have the means to have a down payment, or own a home.  Going after them for $2,500 in lost rent due to non-payment can take years to get back.  In this area, even if you got a judgement for a substantial amount you would still need to cover the cost and then wait for them to pay.

    I am sorry you are going through this, obviously you are doing this to bring income in, not to receive a huge repair bill. With you canceling your insurance makes me think that you may not be plugged into your local REIA group. By plugged in I mean you are networking with other housing providers in the area, not just going to the meeting. We were told early on the Real Estate Game is a contact sport. You need to see if you can find a local mentor to help guide you. Also we love the book Landlording on Auto Pilot. It helps with the relationship between you and the tenants.

    Early on we found other investors and volunteered our time on a Saturday to help with sheetrock, strip wall paper off, install trim or paint.  We didn't just ask for free advice, we wanted to make sure they knew we wanted to help where we could, while working full time W2 jobs.  Most folks who own and manage their own stuff will jump at the chance of having someone help when a tenant moves out.  If a tenant moves out on a Monday and 2 rooms need a fresh coat of paint before marketing the property again it can be 4 -10 man hours.  If my wife and I both come over and there are 3 of us hammering it, we can be done and at the pizzeria by 8-8:30 on Monday night and the place can be shown the next day.  If we were not there the owner may have 2 or 3 long nights after work.

    0Reply
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