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!
"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.
Simple cost/benefit analysis. Are they good long term problem-free tenants? If so, working with them sounds cheaper than vacancy. Are they so-so and you'd not be too bummed to see 'em go? In this instance, you have every right to say yes or no, but I'd look at it financially rather than emotionally.
To piggyback on some of the other posters, I would say defer to your lease. If you have multiple properties and do this for one tenant you "like", then you are presented with the exact same scenario to someone you don't like, it could open up a can of worms. It also opens up avenues for them to start requesting like and kind reimbursements for living expenses, and they could keep trying to come to that well every time.
If you do choose to give aid, I wouldn't do it as a rent credit, but a receipt reimbursement. Easier to track from a business standpoint, as well as not setting the same precedent where they continuously ask for rent credits or anything else that will negatively affect your cash flow.
@Ralph Miller - I would consider offering some compensation, not sure if I'd do half. I would ask them to provide the previous bill then make a determination on the amount, particularly if they are good residents that you want to keep.
@Ralph Miller my home electricity bill doubled in May and June due to much higher temperatures so we ran the AC quite a bit more. As @Colleen F. suggested just get the May and June bills from last year from the utility. Look at the difference and that is the most you should consider paying. I know many landlords don't think they are responsible for anything, but it is a landlords responsibility to keep the HVAC in proper working order. Have you done yearly maintenance service calls on the system? Have the furnace filters been replaced twice a year? If a system is running more often, it will take more electricity, but I am not sure about double.
I once had a property where I replaced the roof and the tenant complained that the workers plugged into his electricity. He asked me to cover the cost of running an air compressor for two days. I told him it was probably $5 at most and offered to take $10 off his rent. Now my lease says that landlord has permission to use tenants power for maintenance and repair on the property. You never know what tenants are going to come up with.
I want to thank everyone for their input! However, this story is far from over. I decided NOT to subsidize the electricity bill and got a huge blow back from my tenant. I decided not to subsidize the electricity bill based on the following:
1) New tenants with little track record with me (just hit the 1 year mark).
2) Since being in my property for one year, they have put in seven service requests, which is a significant increase from the normal one and zero service requests I get from my other properties. This makes me believe these tenants have a tendency to be problematic and prone to issues, whether self-inflicted or not. For analysis, their service requests included replacing an oven they said had a large crack on the top that they swear was already there when they moved in, but not noted on the check-in inspection sheet. They also put in service requests to fix the garbage disposal, replace light bulbs in the kitchen, replace window screens so their cat can sit next to any window without being able to escape outside, and now replacing the AC. To note, I was the person who lived in this property before them and none of these things were ever an issue.
3) I looked at old electricity bills for the year before they were my tenants and found that year past usage was actually more than their usage but the cost is more because electricity has gotten more expensive.
Given my findings, I politely told the tenant I do not intend to subsidize their electricity bill. The tenant did not take kindly to this. Instead of accepting my 'No', he sent me a fairly detailed reply that I felt compared to share. I'm not necessarily looking for input, but figured this would be fairly informative to the BP community of tenant issues.
Before I share my tenant's reply, I will inform you that I have decided to put this property under management, as I just could not deal with the headache that this tenant has been. Enjoy!
Tenant reply:
"Hi Ralph,
Respectfully, I strongly disagree with your analysis, as it doesn't appear to consider the temp/usage data or the fundamental energy usage circumstances in June and July.
I've attached a Powerpoint file (it's short; two slides) to touch on two important ideas:
1) Your energy usage in Aug 2016 reflects different energy use habits, and is not directly comparable to our energy usage; this is borne out by comparison of Aug 2016 and Aug 2017 temp & energy use data.
2) My move-in in mid-August did not introduce a significant change in energy use patterns compared to what Kelly had already established on her own in that time (unsurprising given that we use all the same appliances and utilities); this is borne out by comparison of Aug 2017 and Sept 2017 temp & energy use data. We do tend to be rather energy-conscious if not simply because our combined income is, for now, rather less than we'd like, so it's best to save where we can.
And while the data is compelling, the conclusion of your analysis (that this bill does not reflect an unusual spike in energy usage in the summer months) implies that the circumstances are inconsequential. In June in particular, we left town for a week, meaning that the only utility in use during that time was air conditioning -- which, of course, was failing. I find it remarkable that a precipitous drop in A/C efficiency, causing it to run constantly 24/7 in hotter conditions due to its failure, further exacerbated by the installation of a window unit to cool a room separated from the rest of the hot house solely by a wooden door, *would not introduce a significant change in energy usage*. I don't mean to offend, but I simply cannot see how this could be literally, physically, possible, and I think that the burden of argument must lay on demonstrating how it could be possible.
I hope that you will reconsider given this analysis. Of course, you may understandably wish to wait until the data for August or September of this year is delivered, to get a more comprehensive picture.
Furthermore, in case you decide otherwise, I've decided to also attach the invoice for the hotel stay we had to book here in town after returning to a 95 degree house. Regardless of the stance of the new property manager (with whom I look forward to working) these temperatures constitute unsafe living conditions for the pets at least. Perhaps we humans are hardier -- either way, this was a cost I was more than willing to simply eat until now.
Finally, as was established, I do look forward to working with the new property manager you referenced. I understand that [name], who has really been quite helpful, is probably very busy with law school approaching so soon. But we still have not had our kitchen light bulbs replaced, months after the initial request, and we still have the window unit installed in our spare bedroom, which poses an insulation and safety problem (since to my understanding it was not secured for long-term use). I will bring these issues up with the new property manager as soon as they make contact.
It seems as though you both went through a lot to prove your points. You did one of the two things I would've done in this case. I probably (because I can be soft and non confrontational...which isn't a good thing in this business), would've subsidized half of what the increase was. If it was $200 higher, I would've subsidized $100. But, I think you did the right thing by getting a PM. Is their lease up soon? Might be time to replace them with a hopefully better tenant. Also, why can't they change their own lightbulbs?