Minnesota Furnace broke - Renter demanding discount

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Minnesota Furnace broke - Renter demanding discount

Nick Johnson
Investor · Saint Paul, MN · Member since 2016 · 3 posts · 1 vote

We recently had a furnace break two weeks ago and the renter is demanding a refund.  The night we were notified, we examined it found some loose connections and got it running again.  The next day it broke again we delivered multiple electric heaters, and scheduled an inspection from an HVAC guy.  long story short it took a week to fix as we had to do an entire replacement of our HVAC system.  When we visited the property the second day it was 70 degrees inside, the HVAC guy assured us over a period of 3 visits through the week that "the house is plenty warm inside".  Outside temps throughout the week were in the low 30's which is unusually warm for Minnesota.

The renter is now demanding a rental reduction, or will take action.  The renter has stated two different low temperatures, neither which were experienced by us, or the HVAC guy.  The renter claims the electric heaters were not adequate as they were blowing circuits.  We told her upon delivery of the portable heaters, and one more time the heaters draw too much power to be on the same circuit and should be spread through the house.

Any advice on our responsibility as a landlord, and how this may play out if we go to small claims court?

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Joe SplitrockPro Member
Moderator
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
9y

@Nick Johnson you could offer to pay their electricity bill for the month. Electric heat costs more than gas so you would be covering their extra expense. Since you are paying the entire electric bill, it would also cover some extra for the inconvenience. Alternately you could offer to take something like $100 off rent for the inconvenience. They are going to have trouble proving the house was inhabitable without hotel receipts or some other proof the temperature was dangerously low. You have a witness in the HVAC guy. Try to work out some deal. Nobody wins in court.

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  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    9y

    @Nick Johnson you could offer to pay their electricity bill for the month. Electric heat costs more than gas so you would be covering their extra expense. Since you are paying the entire electric bill, it would also cover some extra for the inconvenience. Alternately you could offer to take something like $100 off rent for the inconvenience. They are going to have trouble proving the house was inhabitable without hotel receipts or some other proof the temperature was dangerously low. You have a witness in the HVAC guy. Try to work out some deal. Nobody wins in court.

    3Reply
  • Darren Budahn
    Investor · Milwaukee, WI · Member since 2014 · 811 posts · 420 votes
    9y
    Try to work something out with them. Give them a small discount and move on.
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  • Tim SwierczekPro Member
    Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    I"m with @Joe Splitrock  I have taken a legal class and I feel they would have a good case against you and it would not be in small claims court it would be in housing court.  I'm not an attorney but my off the top of my head guess at your liability is 1/2 months rent and most of the electricity bill, plus court filing fees, and if your lease allows for legal fees to you in a case the judge will automatically rule that you pay their attorney with no cap on fees, that could be more than the furnace cost, so if you can satisfy them with paying their full electric bill and possibly a further small discount do it.   I highly recommend you go to homelinemn (dot) org and buy their landlord book.  Its $25 and will save you huge some day.  They have a once a month class too and I have attended, you would be surprised at the things you think you are doing correctly but actually break the law.

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  • Wes Brand
    Investor · San Francisco, CA · Member since 2016 · 314 posts · 153 votes
    9y

    I'm not familiar with MN but generally cities give you a reasonable amount of time to cure defects before penalizing you, where reasonable is left up to the courts and depends on specifics. A week to fix the problem is probably fine but your laws may vary in your local area.

    I did find the following which seems to say you're completely fine to say "nope, not going to give you a discount", since the rules are only when the LL provides/pays for the heat.

    https://homelinemn.org/2642/when-is-my-landlord-re...

    That said, if you want to keep them around, why not pro-rate the week of rent and charge them for 3 weeks for the month instead of 4?

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  • Nick Johnson
    OP
    Investor · Saint Paul, MN · Member since 2016 · 3 posts · 1 vote
    9y

    Wow, for this being my first post I truly appreciate everyone's insight.  I have discussed with my investment partners and we are going to see if the tenant will agree to a rent refund for a determined amount to close this matter.  

    Thank you everyone,

    Nick

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  • David Moore
    Investor · Crystal, MN · Member since 2013 · 486 posts · 277 votes
    9y

    @Nick Johnson

    This issue is bigger than has been discussed, and there are several issues that need to be addressed.

    First, whenever you buy a rental property, it is in your best interest to have the furnace maintained, at least every other year.  It was your solution that upset the tenant.  It took a week.  What was your communication during this time?  You said you went to the property, fixed the wiring, and got it going, but was that the right response?  

    What if instead, you had brought the HVAC guy in day #1.  It shows commitment.  The HVAC guy on day #1 would diagnose the problem.  Whatever he says, you tell the tenant.  You cannot over communicate.

    The tenant is probably mad because his/her expectations were that this problem should have been fixed immediately.  

    This past winter, there was a 7 inch rain in southern Minnesota, and my tenant basement was flooding.  I left work, pick up a pump, and sat in her basement until it was completely dry, then called in the HVAC guy the next day.  I brought space heaters to her, and we communicated.  It took a week to get the furnace repaired, (because the event hit the whole town, and every plumber quickly ran out of inventory),and new water heater, so I brought her space heaters as well.  We communicated every detail continuously, and even bought a dehumidifier to take care of moisture in the basement.  We looked into other living arrangements, and suggested options for her for the week.

    The tenant stayed in the house, never a complaint.  We still haven't gotten our space heaters back.  

    Talk to the tenant and admit where you made mistakes, and ask them what will make it right.  Don't come up with the solution for them...talk to them.  It is a hassle for them to take you to court...a lot of paperwork.  Let them set the initial terms, and see if you can whittle it down to something that is a win/win.  

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  • Nick Johnson
    OP
    Investor · Saint Paul, MN · Member since 2016 · 3 posts · 1 vote
    9y

    Update: The tenant has agreed to a rental refund of 1/4 month as resolve to the lack of heat.  

    With the scenario at hand we decided our best outcome was a happy tenant, and to move on. 

    1Reply
  • Tim SwierczekPro Member
    Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    @Wes Brand  I see where you are coming form with your analysis, but MN has tenant rights and responsibilities and the same for the landlord that cannot be overridden by any lease term.    MN requires the LL to  the following

    A.  The Premises and all common areas are fit for the use intended by Landlord and Tenant.  

    B.  Landlord shall make necessary repairs. The landlord need not repair damage caused by the willful or irresponsible conduct of Tenant, Tenant’s guests, or a person under Tenant’s direction or control.

     C. Landlord shall keep the Premises up to code unless a violation of the codes has been caused by the willful or irresponsible conduct of Tenant, Tenant’s guests, or a person under Tenant’s direction or control.

    While it may seem that a week is reasonable, the courts have ruled that there is no reasonable amount of time a tenant can be without heat in MN, and not be compensated.  In practice, if a LL keeps a tenant happy, but in court, a LL would be forced to prorate rent for even 1 day.  Of course, this never happens, because tenants do not sue for one day and its rare that a happy tenant would sue,  but that is how it works in MN when it comes to heat.

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  • Wes Brand
    Investor · San Francisco, CA · Member since 2016 · 314 posts · 153 votes
    9y

    @Tim Swierczek Mind citing something? 

    I couldn't find anything that said there was a requirement for a landlord to provide heat for a tenant, unless it's specified in the lease that the landlord pays for heat. I found several sources that said a tenant could repair and deduct, I found several sources that said a utility company can't cut off heat in the winter without first giving 7 days notice, and I found several sources that said there is no minimum interior temperature law/code/guideline in MN at large, but some cities may be more specific. 

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  • Tim SwierczekPro Member
    Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    The landlord is not required to provide the heat, they are required to provide the working furnace.  There is no specific language in the law that says landlord must provide, heat, furnace,   The language I provided earlier which is from the MN bar association lease mimics state statute and has been interpreted to mean that a LL must provide a working heat source, it does nor require them to pay the utility cost to run the heat source.  I hope this helps.

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  • Wes Brand
    Investor · San Francisco, CA · Member since 2016 · 314 posts · 153 votes
    9y

    @Tim Swierczek I believe you are incorrect. 

    I am unable to find *any* citations that a landlord must maintain a specific interior temperature in MN at large. Certain cities have more stringent requirements of a specific interior temperature, but nothing for the state. Additionally, in many places space heaters are deemed insufficient via building codes or tenants rights, but I was unable to find anything in MN that said "you must have a furnace".

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  • Tim SwierczekPro Member
    Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    @Wes Brand I understand where you are going with this and I respect your diligence.  The fact is you will not find a state statute about temperature.  The courts use this statue below, and a working furnace is considered necessary for a home to be fit for intended use.  If you really must find the citation you will need to search county housing court records.  I do not have that ability

    As an aside I have previously owned a shared utility duplex in Saint Paul and there was a minimum temperature requirement I was quoted by the fire inspector.  I don't recall what it was but it was a city of Saint Paul inspection.  I do not know if that was a city, county, or state requirement but they did come and test it in one location in each unit.  i do remember I passed but not what the guideline was.

    https://www.revisor.mn.gov/statutes?id=504B.161&ye...

    504B.161 COVENANTS OF LANDLORD

    Next OR LICENSOR.

    Subdivision 1.Requirements.

    (a) In every lease or license of residential premises, the PreviouslandlordNext or licensor covenants:

    (1) that the premises and all common areas are fit for the use intended by the parties;

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