Who Pays for HVAC Service Call?

Question

My tenant contacted me late last night saying the heat wasn't blowing upstairs but it was downstairs. As this used to be my primary residence I immediately knew it was the dampers. I asked the tenant if they checked the dampers and she assured me her husband had checked it multiple times and the hot air still wouldn't blow upstairs. Long story short, HVAC guy came out and opened the upstairs damper. $175 for diagnostic and actually opening the damper... I looked over my lease and it doesn't address service calls at all. How do I approach this. I would assume this is general tenant maintenance.

Jon Holdman · Answer

I know people do this, but I think its dangerous.  Rather than calling you about that little drip under the sink, the tenant ignores it rather than risk being charged $50.  So instead of a minor repair it turns into replacing a cabinet.  And countertops.  And fixing the floor under the cabinet.  Etc.

Jon Holdman · Answer

Have you ever explicitly shown the tenant how to use the damper and told them when to do it?  If so, did you say "Do you remember when I showed you how to open the damper?  Did you do that?"  If so, then you may be able to get them to pay.

But, if not, I think this may be your issue.  While it might be nice for tenants to understand mechanical systems so they would really understand what you meant by "did you check the dampers", sometimes they don't.  More than once, I've had a tenant describe a problem and leave me scratching my head about what they mean.  An in-person visit often has an aha! when I get what they were trying to say.  This is a situation where, if possible, I would have gone over there and checked in out myself before calling a service person.  If you didn't, then take the $175 as the cost of not making the trip yourself.

Will Gaston · Answer

@Shawn Dandridge Are they good tenants? I would've probably sent them the bill when I first started investing but have changed my mind on things like this in the last 2-3 years.

It's been my experience that issues like this cause most (80%+) of the work and headaches of being a landlord. Avoiding energy spent on tenant conflict and focusing on buying more property is something I'm intentionally trying to do. I've had many seasoned investors give me this advice and I'd recommend the same.

Jack Bobeck · Answer

@Jon Holdman if time and money grew on trees, I'd respond to every tenant request.

Ten years into this, I have realized that when you rent to good, qualified people, they take care of minor issues on their own and save the major for the phone calls. Its why I do not do Section 8 anymore, I have found the quality of people able to take care of anything house related to be minimal, if existing at all. This is why I give up my 1st month's rent to a tenant placement firm.

Once you get above 4 doors, I think you have to seriously evaluate what your time is worth and how to resolve problems in the properties. Just my 2 cents. I know you have been doing this a long time as well and I value your thoughts! Thanks for sharing.

Guy Yoes · Answer

In my experience, a home warranty is not worth the cost. We got one with each of two houses we bought. First we had a toilet that needed a new flange. We called the HW company and they sent out a plumber ($85.00 service call). He walked into the bathroom and looked at the toilet and said it was not a covered repair. He then proceeded to offer his services "on the side" to do the repair for $300.00. I told him to take a hike and hired a handyman recommended to me. He came the next day and fixed the issue for $125.00. A few months later the other property had a water heater that did not have hot water. Another call to the HW company and another $85.00 charge. Same thing, guy comes out and looks at the water heater (doesn't even touch it) and says its not covered. Wants $1800.00 to replace it. I went to Lowe's and bought a new one for less than $600 and a buddy and I put it in (less than 2 hour).

Here's the deal: they get $85.00 to show up and tell you it's not covered. They offer to do the job for 2-3 times what it should cost. If you say ok, they make a nice profit off you, If you say no, they got to the next house and repeat. Three not covered calls an hour and they make $250.00+ an hour with no labor involved.

Now my experience may be different than others. I would like to hear from anyone who has had a good experience with home warranties and who they used.

Andrew Kerr · Answer

@Shawn Dandridge - you already got some great advice from others on whether to charge the tenant or not.

What I wanted to add is to find a local handy man to do your maintenance and handle issues like these. What I did was advertise in craigslist for part time work for a handy man. And in the add specifically mentioned I am looking for someone that is a full time maintenance person at an apartment complex that wants part time work on nights and weekends. I had a lot of luck getting really skilled folks this way. I could pay them $20-$40 for a service call first, and 90% of the time they could fix the issue or properly diagnose the issue. This saved me the $100+ plumbing/electrical/HVAC service call.

Corby Goade · Answer

I would use my discretion. Are they good tenants who pay on time and don't cause much trouble? If so, it's not worth $175 to change that. I'd just have a conversation with them about it and tell them that you aren't passing on the charge this time.

Michael Bishop · Answer

One interesting recommendation I've seen that you may want to consider in the future is this; purchase a home warranty (in the $400-$600 range per year) and have the tenant pay for any service calls (typically about $60 give or take a few bucks). Depending on how much you want to pay, a warranty can cover almost anything in the residence. This would provide investor/owner alignment and cost sharing, and obviously you'd need to put it in your leases terms moving forward.

I've never done this myself so I'm not entirely sure if there are any stipulations for a rental property. Just food for thought.

Shawn Dandridge · Answer

Thanks everyone for the feedback. I was seriously considering billing this back to the tenant until I read @Jon Holdman post and my wife essentially told me the same thing. I didn't explicitly show the tenant how to use them as I'm out of state but I did explain them to them. Like Jon said, things a lot of the time gets lost in translation. I'll eat the cost on this one. I was assured by the HVAC guy he thoroughly explained the dampers and how they work to the tenants so this shouldn't occur again.

I was also a supporter of the maintenance fee deductible but after reading on it some more, I now believe its a bad idea as tenants are more likely not to report serious issues which in turn will cause the LL a serious outlay in cash eventually. Thanks again for all of the feedback!

Jack Bobeck · Answer

@Shawn Dandridge My lease states that the Tenant is responsible for the first $50 of any service call. This cuts down on silly calls like the one you have above.

Who Pays for HVAC Service Call?

Most Popular Reply