Repair Deductible Charged By Landlord

Investor · Somerset · Member since 2018 · 55 posts · 14 votes

For my rental in New Jersey, I have set a deductible of $60 whenever I make a visit to do any kind of repairs for the tenant. For example any water leak, of the contractor charges me $250, out of that $60 tenant pays.

What do some of the landlords do in general? Do they charge any higher or lower?

I understand a very high deductible may result in Tenant not reporting small issues that may grow to become expensive repairs.

Any advise would be appreciate. Charge of $75 or 100 per service call is fair enough?

Thanks

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Jonathan GreeneBusiness Member

Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes

Why are you charging for a service call for things that are landlord issues? If something breaks in the unit, they should not pay a deductible in my opinion. This is what causes people to not call ever and to have friends fix stuff the wrong way.

If they want something checked out and then it turns out to be fine, maybe then a service call would be warranted, but not every time especially when they are service issues that are on you.

$250 a call for someone is insane. Why are you paying $250 for someone to check a leak unless it's an emergency?

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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
1y
Why are you charging for a service call for things that are landlord issues? If something breaks in the unit, they should not pay a deductible in my opinion. This is what causes people to not call ever and to have friends fix stuff the wrong way.
If they want something checked out and then it turns out to be fine, maybe then a service call would be warranted, but not every time especially when they are service issues that are on you.
$250 a call for someone is insane. Why are you paying $250 for someone to check a leak unless it's an emergency?
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Jill F.
Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
1y
I have found that it is difficult enough to get people to call when they should without charging for 'service calls.' The only time I charge a tenant for a service call is if the tenant schedules a service call with one of my 3rd party vendors (that schedules directly with the tenant at my request) and then either no-shows or doesn't allow the vendor to enter as agreed. I may also charge if one of our people can't perform scheduled maintenance because the tenant has not crated an aggressive dog. I have found excess service calls to be very rare and they have been limited to tenants that were already known problem people (usually people with some kind of pretty obvious personality disorder).
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Adam BartomeoBusiness Member
Real Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
1y
We do not have a fee. Having a fee causes deferred maintenance and the tenant to fix the issue themselves which often causes more issues. When I have seen owners charging these fees they have been around $75 but I am not a fan of these charges at ALL.
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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
1y
Making the tenant responsible for any maintenance is generally a bad idea. If the tenant knows they have to pay, they won't report the problem. When they finally move out, you'll discover a ton of unreported maintenance and possibly damage caused by failure to maintain.
Landlords should encourage tenants to report maintenance issues.
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Tim DelaneyPro Member
Buffalo, NY · Member since 2018 · 790 posts · 530 votes
1y
If the issue is no direct fault of the tenant then I do not think it is fair to charge the tenant anything. It is your property so unless the tenant is intentionally breaking things they should not have to pay for repairs.
As others have mentioned, it is hard enough to get tenants to report small issues that can and do cause larger problems when I am not charging a fee, you are opening yourself up to major issues if tenants are reluctant to call because they don’t want to pay a fee.
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Greg M.
Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
1y
Quote from @Andy S.:

For example any water leak, of the contractor charges me $250, out of that $60 tenant pays.
As everyone else has mentioned, charging a fee is stupid. That $250 water leak started as a $75 service call to tighten a connection and add new plumbers tape. The tenant didn't report it until it could no longer be ignored. By then it turned into a $250 call, costing you $190 instead of $75 and the tenant $60.
Can you imagine a tenant knowing they are moving out in 6 months. Think they report that burning wire smell or the water running down the inside of a wall or the leaky toilet? They'll just let the damage continue and say they never noticed the issue. You'll be on the hook for way more in repairs.
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Frank Chin
Investor · Bayside, NY · Member since 2017 · 1k+ posts · 1k+ votes
1y
I at one point charged tenants the first $50 of repair costs. One small problem I found in most rental units that eventually there would be a small leak under the sinks. When I charged the %50, no one reported the drips. They place a pail under the sink to catch the drips and often they forget to remove the pail when they move and, in some cases, forget to empty it. The wooden cabinet holding up the sink begins to rot. Repairing it costs more than $50.
When I stopped charging such repairs, tenants report it and I had a local plumber who repairs it for %75.00.
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