Tenants Asking for Me to Subsidize Their Electricity Bill

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Tenants Asking for Me to Subsidize Their Electricity Bill

Ralph Miller
Investor · VA · Member since 2016 · 47 posts · 26 votes

I have tenants asking me to subsidize their electricity bill bc it more than doubled in the month of May-June.....this is the story.  Please provide input.

About two weeks ago their AC unit broke.  I immediately had a technician go and fix it (the next day).  It was apparently the capacitor and AC motor fan.  Repairs cost me about $700.  However, the AC unit is running a little rough and it is having a difficult time keeping the house cool so I am replacing the whole thing next week for about $2500.  Additionally, I bought them a window AC unit to use for the time being.  It will have been about 2.5 weeks since the initial problem with the AC unit started.

My tenants are saying that their May-June electricity bill is twice as high as it usually is, claiming it's because the HVAC unit has been running inefficiently due to the motor fan failure.  Thus, they're asking if I can subsidize half of the electricity bill for them.  Has anyone heard of this before?  Also, the months of May-June have gotten significantly hotter since it is the summer months, so I'm inclined to believe the electricity bill increased due to the weather, not because the AC unit has been operating inefficiently.  Any inputs?  Thanks in advance!  I love the BP community!

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Terrell Garren
Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
8y

"I've disconnected your air conditioning". Unnecessarily heartless and unbelievable given the details provided.  A poorly functioning AC unit can certainly double the cost during hot weather. If they are good tenants, look for an acceptable compromise. If they are great tenants, I would pay half.

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  • Harinath Pottam
    Los Angeles, CA · Member since 2018 · 15 posts · 11 votes
    8y

    I would assess the additional power for the window unit and reimburse that cost. It's all about to keep the tenant happy without breaking our Bank. A long term tenant is more profitable than an unhappy and/or short term one.

    3Reply
  • Marco Padilla
    Investor · Philadelphia, PA · Member since 2017 · 104 posts · 50 votes
    8y

    I feel it all depends on your past with them, if they've been good tenants and this is the most they have to complain about, personally I'd take it on the chin I would explain it to them like this. "This is not my responsibility, however due to you being such good tenants and taking such great care of the property I am willing to help you out." Make sure you make them feel responsible for part of the property even though it's yours if you make them feel good and responsible they (tenants) tend take pride in the property and the next time it may influence them to act on their own and fix the problem on their own. Again I am speaking from past experience with my own tenants and I understand and know that every ones experience is different. Good luck!

    3Reply
  • Christopher Winkler
    Specialist · Dallas, TX · Member since 2014 · 900 posts · 392 votes
    8y

    Interesting. We are on our 3rd summer here in Dallas and ours goes from $35 in winter to $150 in summer. This year we broke $200 and i found out we were put on month to month for a higher rate. 

    While a wall unit will draw a lot of power, there might be other reasons why their electric bill doubled, like their plan changed or they switched. I would ask for copies of the last 12-24 month bills, with last summers included to see if it really did double. 

    And I'd flip them a bone since they could do so much more in $ damage on the way out. 

    0Reply
  • Bob Prisco
    Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
    8y

    Sure why not. Help them I am assuming they are good tenants pay on time etc. Happy tenants, happy landlord, Good luck 

    2Reply
  • Bob Prisco
    Specialist · Cleveland, OH · Member since 2018 · 1k+ posts · 666 votes
    8y

    @Ronald West Jr. So many listen to their PM co, and just want to  starting to evict for being a week late or having an issue like this. The only ones that make money doing that is the PM co. Now they get to charge you for repairs, placing a new tenant etc. Work with tenants that you have a relationship with, and are confidant they will pay, get caught up etc. We have tenants that fall behind, and we actually pay the owner their rent out  our of our pockets , ( happy clients happy business ) as if we evict ,the owner is guaranteed to lose at least 3 months rent and then have repairs, so 5- 6k 7k gone! It is not always right to " go by the book" . All the best and good luck , 

    3Reply
  • Andrew Burgoyne
    Contractor · Manahawkin, NJ · Member since 2018 · 4 posts · 3 votes
    8y

    Are these the type of clients, being exceptional, that you want to go the extra mile to keep happy for continued business? Are they some somewhat troublesome? Somewhere in the middle? 

    Situations like this, I believe, are an exchange on value. How valuable the client is to you would determine the extra value you are willing to provide them. 

    If your tenants are somewhere in the middle, finding a compromise is likely the best approach. They would feel less burdened, and even though you might pay out a little, you could have long term good, happy clients.

    Owning Property that you rent out is a business. Like any business, it is you that decides the value you wish to provide to your customers/clients, and at what level. 

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y
    Originally posted by @Terrell Garren:

    "I've disconnected your air conditioning". Unnecessarily heartless and unbelievable given the details provided.  A poorly functioning AC unit can certainly double the cost during hot weather. If they are good tenants, look for an acceptable compromise. If they are great tenants, I would pay half.

    in the deep south central air and heat are mandatory for HUD.. the rest are slum lords basically.. I was talking to one guy and he does not even put in carpet or flooring.. but only charges 250 to 300 for rent. and does nothing to the house.. they can buy their own space heaters and put a wall unit in.. :)

    I had one up in northern IN that I owned.. PM calls me its cooold  tenant has new baby and cant pay rent and heat can you not charge rent for a few months so they can heat the house and then they will add it to the rest of the lease..  me being the biggest softee on the planet sure thing.. no problem.. well 3 months are up and they up and move  LOL.. Oh well .. 

    this one is a no brainer just pay half the bill keep them happy if they are good tenants and be done with it not even worth two minutes of discussion in my mind its sweating the small stuff that just bogs our day down.

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    3Reply
  • Frankie Woods
    Investor · Arlington, VA · Member since 2012 · 1k+ posts · 491 votes
    8y

    I agree with @Terrell Garren.  ACs tend to behave strangely when they have mx problems.  I think having a discussion with the tenets from your perspective (based on you fixing the problems promptly) and theirs.  Consider how much you value the tenets.  

    For example, I have tenets in California (I'm in ABQ) who have been in the house since 2009.  I've received three texts from them in that time with mx issues costing me around $600.  In that case, I would pay half without even thinking about it.  I have tenets in STL that pester me with requests over the smallest issues.  I would definitely be hesitant to meet their request.   Just depends on the circumstances.  

    2Reply
  • Harinath Pottam
    Los Angeles, CA · Member since 2018 · 15 posts · 11 votes
    8y

    I have one condo in CA and the the tenants are good and I gave them a gift card for Christmas in appreciation.

    1Reply
  • Vaughn Smith
    Property Manager · NJ · Member since 2017 · 786 posts · 396 votes
    8y

    @Ralph Miller I would take a look at your lease and the local laws and proceed from there. The other consideration you may want to take into account is how good are the tenants (can they be easily replaced or is it hard to find good tenants in your area?) Take a look at the whole picture before you decide how to proceed, you might not be required to subsidize the entire bill, but it may make sense to provide the tenants with some form of credit.

    1Reply
  • Caleb Heimsoth
    Rental Property Investor · Durham, NC · Member since 2016 · 7k+ posts · 7k+ votes
    8y
    Like others have said it’s best not to involve yourself in your tenants lives. If they pay rent, that’s great. Do any necesssry repairs and that’s really it. The electric bill will fluctuate up and down depending on the season. So that’s just what it is
    1Reply
  • Rhonda Wilson
    Rental Property Investor · Tacoma, WA · Member since 2018 · 113 posts · 149 votes
    8y

    I would not. My response would be to fall back on the rental agreement and state what you are and are not responsible for. Specifically, I assume that you have agreed to provide an A/C unit. Therefore, you are also responsible to repair it. You have not agreed to provide electricity. Others have pointed out that you could set a bad precedent. Yes, some tenants will ask for one thing after another. If they think that you are squishy, they will push and push until you say no. I figure that if they get angry and leave, I'm better off as I am likely to get a reasonable tenant.

    1Reply
  • Scott Culver
    Investor · Owings, MD · Member since 2013 · 22 posts · 4 votes
    8y

    Odds are you replaced the HVAC system with a more efficient one.  I'd suggest to the tenant the longer they stay the more they'll save in the future.   You're welcome.

    1Reply
  • Jeff R.Pro Member
    Investor · VA · Member since 2018 · 42 posts · 11 votes
    8y
    Years ago I rented a room from a friend who rented a house, the power bill became astronomically expensive, $800 approximately. We did not get subsidized in any way, bared the burden of paying the bill. After we left it turned out the unit needed replacement. Had we known it was the unit, we would have requested a rent discount of some sort. I am a landlord as well and have dealt with other expensive repairs, but non utility related. I would request a receipt of the bill for tax records as an expense and agree to assist with 1/3 of the cost, since you are installing a new unit, and if they are good tenants. Additionally if the HVAC guy did a crappy job, maybe have him roll some of the original cost into the new unit. 1/3 of $700 isn’t worth the time of replacing a pissed of tenant.
    0Reply
  • Matthew Chou
    Southern California · Member since 2018 · 1 post · 1 vote
    8y
    Originally posted by @Christopher Winkler:

    Interesting. We are on our 3rd summer here in Dallas and ours goes from $35 in winter to $150 in summer. This year we broke $200 and i found out we were put on month to month for a higher rate. 

    While a wall unit will draw a lot of power, there might be other reasons why their electric bill doubled, like their plan changed or they switched. I would ask for copies of the last 12-24 month bills, with last summers included to see if it really did double. 

    And I'd flip them a bone since they could do so much more in $ damage on the way out. 

     This basically. If they're lower-income, then they tend to be more... destructive, to say the least.

    I've actually seen a SFR where the previous owners smashed every single tile in the kitchen right in the middle with a hammer on their way out. (They were foreclosed upon.) One of my family's friends had a tenant who poured cement down the toilet once he started the eviction process. Yes, sometimes you can jail them for this behavior, but it's a essentially lose-lose situation.

    I definitely wouldn't give them half the bill, but something small so that you aren't completely antagonistic with them. Make sure that you explain to them that this won't be a recurrent activity and stress the responsibilities the tenant has. Otherwise, just find a new tenant.

    1Reply
  • Diana Nichols
    Salt Lake City, UT · Member since 2017 · 3 posts · 2 votes
    8y

    I was in this situation and I have to repeat what the others are saying .. "depends on the tenants and how long the rental relationship"  are they good tenants, are they new tenants?  In my case,  a great couple in my CA rental (4yrs), the temperatures were in the 100's and they had to use alternate cooling methods due to the main AC going out (very old unit) and no one could get to them for a week because of the high volume caused by the heat wave.  For the good of our relationship and the Karma I gave them break on the rent to help cover the additional electric bill.  They didn't ask I just offered because I "should" replace the unit.  To me these particulars make a huge difference, don't want to spoil the child but you don't want to neglect them either.  

    1Reply
  • David Gonzalez
    Realtor · Camarillo, CA · Member since 2014 · 162 posts · 102 votes
    8y
    I would give them a rent credit ONLY for the days that the home had no A/C. Hard to say what the cause of the high bill is and what was caused by the A/C unit.
    1Reply
  • Bryan Devitt
    Contractor · Oxford, MA · Member since 2018 · 807 posts · 745 votes
    8y

    I'd the unit was going out and the bill slowly got higher month after month for a year, would you pay the increase over the year? IMO you cannot be held responsible for something that isn't running like new, because they're not renting a brand new place with a guarantee that it will stay that efficient for life. You're also putting out a lot of capital to put in a brand new unit. You putting out a few thousand dollars should be enough. Wha 5g next? The fridge has been acting up so they want $50 a month back until you replace it? 

    1Reply
  • Keith J.
    Rental Property Investor · USA · Member since 2015 · 5 posts · 0 votes
    8y

    Sounds like you’ve done more than enough for them already.  Any right minded person knows that appliances eventually break down.  Any extra cost that they “might” have incurred will most certainly be offset by the brand new unit that was installed in a timely manner.  Answer is absolutely without a doubt no.  

    0Reply
  • Elkhan Agamirza
    Houston, TX · Member since 2018 · 3 posts · 0 votes
    8y

    If you decide you are subsidizing, you should look at their last year bill and compare kwh usage, not the $ value. Also it would be fair to compare the average temperature for the month last year and this year.

    The electricity prices have gone up since last year by 30%-50% and that could explain the big chunk of the bill.

    0Reply
  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    8y

    I am on the camp of "No". If the thought of "yes" comes up it is important that you accept that anything close is the landlords responsibility to all tenants going forward. You can't decide that this is a good tenant, this one almost pays most of the time, this one is a bad tenant so "no". Once you start treating tenants differently, the "reason" you treat them different becomes open to interpretation by someone else. 

    "Is it because they missed one payment or is the real reason that they are (insert protected class)? "You paid for this (insert protected class) electric bill when the AC went out, but when my client a (insert protected class) had a fridge break down, you didn't replace all of their food". "When (insert protected class) at your rental downtown had a squirrel chew through a wire and fried her curling iron you replaced it". "However when (insert protected class) had a mouse urinate on her wedding dress stored in the basement you didn't pay to have it professionally cleaned".

    Just my 2 cents and good luck on whatever you decide.

    2Reply
  • Ryan McKelvey
    Jacksonville, NC · Member since 2018 · 67 posts · 58 votes
    8y
    In many places if you give them copies of the repair bills they can submit them to the utility company for a one time rate adjustment. Also, many renters insurance policies have utility reimbursement for these types of situations. That’s why my leases state the tenant must carry renter’s insurance. It explicitly states also that it is the tenants responsibility not the landlords for maintaining utilities. Help guide them in the direction so they can get the issue corrected, but this typically is not your responsibility.
    2Reply
  • Ray Harrell
    Investor · Chicago, IL · Member since 2016 · 1k+ posts · 930 votes
    8y

    If you appease the tenant this time, they will ask for a credit every time something goes wrong. A tenant asked me to waive the $25 surcharge per month for a window air conditioner, and I said no. Pay the additional money, deal with the heat, or move. This was after he asked me to install more kitchen cabinets, buy him a fan, and other requests. Don't budge one bit.

    0Reply
  • Rodney Morris
    Charleston, WV · Member since 2017 · 47 posts · 12 votes
    8y

    If the unit was "fixed" by a qualified tech on the first trip it should be as efficient as it was before the service call. Another thing to keep in mind if you review last year's bills is that utilities get random hikes in rates that usually aren't seen until high draw times like summer. 

    I will say I just went through a situation on a flip that taught me something. The house was unoccupied and thermostat set on 75. The thermostat went out over a weekend and tried to run the heat and AC. My bill went from $40 to $450 that month and it was only about. 4/5 days running issues.

    0Reply
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    8y

    Unless they have been there for many many years and are flawless with their payments, I would probably not do it.  

    1Reply
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