Tenant Displacement Cost Due to Fire - Who’s Responsible?

Question

I'm a landlord in NH and am going to have to displace a tenant for a few weeks due to a fire caused by the dryer in a bathroom.  This is a newer dryer that was serviced only a month ago.  The fire dept doesn't know how it occurred, but it was not due to negligence on my part.  I'm looking to understand if it's my responsibility to pay for the tenants alternative housing or not.  Appreciate any guidance the community can provide!

Richard F. · Answer

You really need to check local laws on this. Depending on how bad the fire is, it might be considered "constructive eviction" and their rental term ends without penalty and they go elsewhere. If you just want them out while you make repairs, it would be for your convenience, and therefore your expense. BUT, if you required them to have Renter's Insurance, they should have coverage to relocate temporarily or permanently, at their choice. You could then potentially collect lost rent on your LL policy. Also, what does your Rental Agreement state regarding such a circumstance? That could determine action also.

So, it all depends...

Theresa Harris · Answer

Talk to your insurance provider.  They should cover lost rent and the tenant should not be paying while they can't live in the unit.  Depending on what short term rent costs and what they are paying, you may pay for their lower rent elsewhere short term.  Often they should have insurance that also covers things like this.

James Jones · Answer

Sorry you’re dealing with this, that’s a tough situation, but you’re asking the right questions.

In most cases, when a fire occurs and the tenant must be temporarily displaced, responsibility for alternative housing depends on cause, lease terms, and insurance coverage.

1. If there’s no landlord negligence

Since the fire department has indicated the cause is unknown and not due to negligence on your part, you’re generally not personally required to pay out of pocket for the tenant’s temporary housing. Instead:

Your landlord insurance policy typically includes Loss of Rents and sometimes coverage for tenant displacement under liability or property damage sections.

The tenant’s renters insurance is usually the primary source for Additional Living Expenses (ALE), which covers hotel stays, temporary housing, meals, and related costs.

2. What usually happens in practice

The tenant files a claim with their renters insurance for temporary housing and personal property losses.

You file a claim with your landlord insurance to cover property damage, repairs, and lost rental income while the unit is uninhabitable.

If the fire was caused by a product failure (like a dryer malfunction), insurance companies may later pursue the manufacturer or service provider through subrogation.

3. Your immediate responsibilities as the landlord

Even without negligence, you should:

Promptly secure and repair the property.

Communicate clearly and in writing with the tenant about the unit’s temporary uninhabitability.

Abate (pause) rent during the period the unit cannot be legally occupied, as required in most jurisdictions when a property becomes uninhabitable through no fault of the tenant.

4. When a landlord might be responsible

You could be responsible for displacement costs if:

The fire was caused by proven negligence (e.g., known electrical issues left unaddressed).

Your lease specifically obligates you to provide alternative housing.

Local or state laws impose additional requirements (less common in NH than in some other states, but always worth confirming).

5. Practical next steps

Contact your landlord insurance carrier immediately if you haven’t already.

Ask the tenant to open a claim with their renters insurance for temporary housing.

Review your lease for any clauses related to casualty loss, habitability, and relocation.

Document everything: service records for the dryer, the recent maintenance, fire department findings, and all communications.

In a no-negligence fire scenario like this, the tenant’s renters insurance typically covers their temporary housing, while your landlord policy covers property damage and lost rent. Your role is to repair the unit, pause rent during uninhabitability, and coordinate through insurance, not to personally fund the tenant’s displacement.

You’re handling this the right way by being proactive and informed.

Tucker LaClair · Answer

@Kevin Sobilo thank you Kevin! From what I've found our states seem to be aligned.

Joel Miller · Answer

This is a perfect example of why we require tenants to keep renters insurance in effect beginning with day one. Unless the landlord negligently caused the event that resulted in the tenants not being able to live in the apartment, the landlord is not responsible for the costs the tenant may incur from needing to relocate temporarily or long-term. In any case, renters insurance would cover that, and the renters insurance carrier would seek reimbursement through subrogation from the landlord's property insurance policy if the landlord was found to be negligent.

Kevin Sobilo · Answer

@Tucker LaClair, I can explain how it would play out in my state:

1. A landlord would not be responsible for alternate accommodations unless they intentionally or negligently caused the issue making the unit uninhabitable.

2. I suspect in most cases the determination of #1 would occur well after the fact by a court. I doubt in most serious cases this might apply that someone would admit responsibility up front because that may open them up to additional liability such as paying for the tenant's lost possessions, etc...

3. In my state, if a unit is uninhabitable and the repairs to make it habitable cannot or will not be completed in a "reasonable" amount of time then the tenant can terminate the lease with no penalty.

For example, if you said it will take 10-12 weeks for repairs, the tenant can simply say that is unreasonable since I would be paying for months of rent for a place I cannot use. They could terminate their lease immediately, you refund their security deposit and everyone parts ways.

4. The sticky part can be what is "reasonable". A tenant often feels like a long term rental is like a hotel service and that a landlord is required to remedy everything almost immediately when in truth a long term rental is more like buying the house.

They get legal possession rights but only temporarily through the lease. So, their experience living there should be similar to that of an owner.

So, for example, you tell the tenant the repairs will be complete in 10 days. The tenant want things like rent abatement, compensation for alternate accommodations, or even to terminate the lease, BUT if they owned the property there would be no mortgage abatement, no compensation for alternate accommodations, or anything else. They are not entitled to those things in my state either.

So, in my state you can simply deny their request and expect them to keep paying and move back in after 10 days. That doesn't mean you have to take that action, but I believe that is what the law would allow in my state based on my understanding.

Joseph Beilke · Answer

This is a good example of why it’s critical to have the proper insurance coverage in place. As the owner, you should ensure your policy includes loss-of-rent coverage, and require tenants to carry adequate personal property and liability insurance.

For example, my insurance broker structures our policies so the owner is covered for lost rental income, while the tenant’s policy handles temporary relocation and their personal belongings.

Tucker LaClair · Answer

@Joseph Beilke thank you very much for the insight! My policy does cover lost business income, but I didn't require the tenant to carry renters insurance.  My lease states it's required, but I didn't police it.  Lesson learned for a few thousand.  I appreciate the response!

Drew Sygit · Answer

This is one of the situations where it is NOT easy landlording - as so many DIY investors state here on BP:(

You'll want to check your lease to find out how strong it really is.

Tucker LaClair · Answer

@Theresa Harris  thank you so much for the advice!

Tenant Displacement Cost Due to Fire - Who’s Responsible?

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