Is a new refrigerator a repair?

Question

Hi,

I'm brand new to the world of real instead investing.  I bought our first property in November, a townhouse.  Everything was newer, including the HVAC, new floors, etc.  It was a place I could buy and not have worry about much renovation.

Our first tenant signed on Jan 15.  The first weekend, that sent a picture of mold in the plastic shoot of the ice maker.  I had the refrigerator replaced ASAP, they had a new one installed within a couple of days.  Our lease agreement stipulates they pay $100 for each repair.  They're arguing that a new appliance doesn't constitute a repair.  I contend it does.  Any advice?

Thanks!

Janice Carter · Answer

Troy, congrats on your first property. On the repair fee, I would be cautious here. A $100 trip/repair deductible typically applies to tenant-caused issues or minor maintenance, not to a potentially defective appliance that was already in place at move-in.

Since the mold was in the ice chute right after occupancy, it would be hard to argue tenant responsibility. Replacing the refrigerator was the right move from a habitability standpoint but charging them could create unnecessary friction early in the lease. Sometimes preserving goodwill with a new tenant is worth more than $100, especially if you want a smooth first year.

Joel Miller · Answer

Very good insights posted by everyone so far. I just thought I would add something from the taxation side. Assuming the new fridge cost less than $2,500, even though you did not "repair" the old fridge...you replaced it, the entire cost of the new fridge may be written off this year as a repair instead of capitalizing it and depreciating it.

Drew Sygit · Answer

How do you think a judge is going to look at this?

A mold issue right after a tenant moved in?

James Jones · Answer

This comes down to two things:

What your lease actually says

Whether the charge is legally enforceable in your state

First, semantics.

A refrigerator replacement is typically categorized as a capital replacement, not a repair. A repair restores an existing item to working order. A replacement substitutes the entire asset. From an accounting and legal standpoint, those are different events.

If your lease literally says “tenant pays $100 per repair,” a strict reading favors the tenant. You did not repair the fridge. You replaced it.

Now the more important issue:

In Pennsylvania, especially Philadelphia, courts are very cautious about tenant-paid repair clauses. You cannot shift responsibility for normal wear and tear or system/appliance failure to the tenant unless it was caused by tenant negligence. If the mold was due to a manufacturing defect, internal failure, or condensation issue unrelated to misuse, the repair is generally your responsibility as the landlord under habitability standards.

Charging them $100 simply because something broke can backfire in court.

Here’s how I would approach it:

• If you have clear evidence the tenant caused the issue (improper cleaning, damage, misuse), then you may have a case.

• If this was a defect in a new appliance, I would not push the $100.

• If the lease language is vague, judges usually interpret ambiguity against the drafter, which is you.

Also consider the business decision. This is a brand new tenancy that started January 15. Starting the relationship with a fee dispute over $100 may cost you more long term in friction, renewals, and cooperation.

My practical recommendation:

Review the exact wording of your lease clause. If it clearly says “service call or repair,” you are on thin ground calling a full appliance replacement a repair.

If this were my unit, I would likely waive it unless I had clear tenant-caused damage.

Long term:

Instead of a blanket “$100 per repair,” many landlords structure it as:

• Tenant responsible for first $100 only if damage is caused by tenant misuse or neglect

• Or tenant pays for clogged drains, disposals, etc., but not mechanical failure

That reduces gray area.

Joel Miller · Answer

Single items under $2500 may be expensed without the need to put them on a depreciation schedule.

Alan Asriants · Answer

Right! Especially in Phila.

Unfortunately this is not really a case for the $100 repair credit. If it was a faulty fridge it not really on them to fix it. If it was new it shouldve been under warranty and potentially you could've gotten it addressed then - unless it was LG forget about dealing with them...

Personally I do not like the $100 repair clause. It creates a lot of ambiguity, tenants are put off by it and they can even throw it back at you when a repair they caused is more than $100 by only giving you the $100 of responsibility.

I have it very simple - you break it, you buy it. If its something that needed to be replaced or a repair that was no fault of the tenant then I take the L. if they broke something, its usually easy to identify and I hold them responsible and bill them. Polite but firm

Kenneth Garrett · Answer

@Troy Smith

I totally get where you are coming from on the repair.  If you would have had the ice maker and shout replaced then it would have fallen under a repair, but since the issue was identified within a couple of days of move in, the issue had started before they moved in.  Do not charge them.

I know you want to, but that’s a bad way to start a tenant landlord relationship.  I would suggest in your next lease you identify the difference of a repair v a replacement.  The lease is your guiding document.  I have seen where landlords provide appliances, but stipulate any repairs are on the tenant.  I personally don’t like that, but you should see what other landlords in your area are doing.  It is market specific.  No difference then some areas don’t provide appliances at all while other areas it is customary.

Bo Smith · Answer

Honestly, I'd eat the $100 here. Mold within days of move-in screams manufacturer defect, not normal wear. Keeping your first tenant happy is worth way more than $100 - bad reviews cost thousands. How's the relationship with them otherwise?

Marc Winter · Answer

Sorry, a replacement is not a repair.  You may depreciate it over time if you have that area of tax expertise.

Sheryl Sitman · Answer

@Troy Smith I am wondering how this small issue lead to buying a new appliance instead of having the fridge deep cleaned or better yet, a tech diagnose the cause and cleaning it. Also, depends on the property class, but I recommend avoiding icemakers completely - they have a tendency to fail and repairs are crazy expensive. Even if you already have the icemaker, you can either disconnect or put in the lease that should it fail, repair is at your discretion - but that is less desirable especially in Philly. These are mistakes that are common among new investors. I suggest joining Philly centric groups and meetups to learn the many nuances of our complex market and how to manage things like tenant relations and repairs. Those $100 clauses are silly IMO - if you use that clause, tenants will hesitate to report issues you definitely want them to report. Why should a tenant pay $100 for a leaking faucet, roof, broken window . . .

Is a new refrigerator a repair?

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