How to handle emergency situations with tenants (AC issues)

48 Replies

Hi fellow landlords,

This year I have been particularly lucky to have 3 AC units blow up and 2 properties have flooding due to sewage back up in my properties (all SFRs). I wanted to ask the experts here if there is a playbook for handling tenants' situation when say an AC goes out after hours on weekdays or weekends. I have a property manager, but AC issues are particularly flexing as most service providers only want to replace and it is costly ($3k-$6k depending on the issue. I have a property manager but have to handle some of the AC issues myself as they are expensive and sensitive. It takes at least 2-3 days to get multiple quotes and get the AC repaired. Similar in case of a sewage back up too. 

Do you let the tenants suffer in 95-100F heat in Texas? (potential lawsuit?)

Do you offer them hotel stay? (again expensive as pets and multiple people/rooms involved)  

Do you ask them to file a claim on their rental insurance for meals/stay? (some have said its not covered) 

Do you offer them rent refund for the days they couldnt sleep at the property? 

Mainly, how do I set expectations that the issue cant be resolved in the same day ? 

Thanks in advance

@Yuvaraj Vimawala First find yourself a AC that doesn't work for a big company that you can develop a relationship with and you trust to just go take care of any AC repair and charge your a fair price. I have 2 such guys that I trust. They fix my HVAC equipment unless it is completely shot which is rare.

You need people you can trust and not mess around with having to get multiple quotes.

They can get to my repairs in 24 hours so I haven't needed to put someone up in a hotel.

I do have some fans that I lend out if needed.

You could also buy a window or portable unit to loan out if needed.

My lease says AC in a non emergent repair. That said if they have small kids or an elderly person or for extreme heat I would do what is necessary to prevent someone from being exposed to this heat for long.

Hi @John Underwood . Thanks for the tips. I really like the fan and window AC tip. I can buy one and give it to my property manager to store. I do have a trusted AC guy, but every 6 months something happens and they bail on me on a warranty dispute, so I have to look for a new one. Hate the big companies, believe it or not, they charge $9k for an AC. My lease is also the same, but the tenants lose all patience and become godzillas in TX heat. How do you go about getting the window AC unit installed on the window on short notice? 

@Yuvaraj Vimawala I can get a new AC system with new duct work installed here from one of my guys for under $4,500.

I have a great handyman that would install the window unit quickly.

They make portable units that the tenant could plug in and stick the exhaust hose out the window easily. The PM could drop it off, or tenant could pick it up from the PM.

@Yuvaraj Vimawala .

@John Underwood . Great advice!

REF: "I do have a trusted AC guy, but every 6 months something happens and they bail on me on a warranty dispute, so I have to look for a new one."

This is a relationship issue! Are you trying to squeeze the HVAC Technician on their invoices? Once you find a good one - don't quibble over a few coins! Settle on 1 or 2 technicians, and treat them right. You want have to be shopping bids while you have tenants sweltering with a blown system. 

I also live where it is stupid hot.  I keep a couple portable a/c's handy, jic.  Sorry to hear you've had so much bad luck this year on repairs. 

@Yuvaraj Vimawala Wait till the window units go on sale at the season end.. buy up several , store them for such emergencies like this . Do not pay out to hotels . They can use fans and window units . Up until the 70’s nobody even used ac in houses . They will live
I agree with the previous responses, finding a trustworthy HVAC technician is critical to running a successful rental business. Shopping for quotes is difficult because each diagnostic fee runs about $65. In the past I’ve sent 3 technicians to diagnosis the same job and they each came up with different answers, so I understand the frustration. I lean towards replacing older units rather than repairing. New units in my area run about $3-4K and I feel it gives me and my tenants piece of mind. Sending out a technician once a year to recharge Freon or replace parts at $300-800 a trip doesn’t seem worth it to me. The investment also helps when it comes time to resell the property as it’s a good selling feature and one less thing to go wrong during an inspection. Keeping extra window units is smart as well. My HVAC guy actually provides them for me in between repairs to keep my tenant comfortable.

@Yuvaraj Vimawala I own a lot of duplexes and some SFH in Dallas and here is my advice:

I send a repair person within 24 hours if the temperature is more than 80C. I want my tenants to be happy and responsiveness to AC repair in hot Texas summer is crucial. I never offer a hotel stay. I have installed a window unit once when AC system needed total replacement, but that's as far as I would go. I also don't offer rent credits unless house flooded and they couldn't use part of the house. It's a slippery slope to offer rent credits.

My advice is to use a reputable AC repair company that does the job right. Over time, you will be able to build a relationship with a professional and get better prices. But, don't expect that to happen immediately. That is the cost of running the business,  and you can compensate by charging higher rents.

AC systems don't fail in a day. They will slowly degrade in performance (taking too long to cool, not able to cool on hot day etc.,). I now have an automation system set up in my rental units where I know when AC needs a filer change and when AC is not performing well etc.,

Do you let the tenants suffer in 95-100F heat in Texas? (potential lawsuit?)

Anyone can sue you for anything. I find it hard to believe a judge/jury would find you at fault if you were taking the necessary steps to fix the AC. Tenants like to threaten.... I would let the tenants know you are doing all you can. Maybe go buy them a portable AC unit to use and then take it back after it is fixed.

Do you offer them hotel stay? (again expensive as pets and multiple people/rooms involved)

never- not required too

Do you ask them to file a claim on their rental insurance for meals/stay? (some have said its not covered)

no, to my knowledge it will not cover that stuff- material goods only, your ins may cover some short term relo stuff depending on the issue

Do you offer them rent refund for the days they couldnt sleep at the property?

no, sets a bad precedence, not required to, get them a gift card or something if you need to

Mainly, how do I set expectations that the issue cant be resolved in the same day ? 

just be honest with them but do not flex too much or you open pandoras box... Be nice, document all in writing, avoid phone calls or if you do talk make sure you record all the conversations- download ACR for your phone- save recordings, always prepare for court...

I have some good vendors in Austin. I speak from experience.... tenants, lawsuits, etc... control what you can control... the rest of the stuff you need to prepare for.

Danny

Texas is a big state, but July and August are almost universally hot across all of it.  Yesterday in Austin was 97F with a heat index of 103F.  Houston was 92F with a heat index of 100F.

When the HVAC breaks, you drop off window units or portables pronto.  No questions asked.  People from northern states should probably not opine on southern cooling system topics, just like people from the south should not opine on northern heating system topics.

You get the system checked *every* spring and fall and don't wait until failure to replace failing components.

You DON'T want to have someone die in your property or land in the hospital because of the heat. This is torts territory, not contract law. Your rental lease doesn't matter and doesn't count. Their fragile health condition is not a defense to your liability.  The standard is what a reasonable and prudent landlord would do.  When it is triple digits, a prudent landlord supplies window units/portables or puts them up in a hotel (or airbnb) for the night.  A prudent landlord doesn't let them die or get hospitalized.

And shame on Danny Webber. That is just bad advice asking for trouble.  There is no "maybe" to this situation.  Advice like this is how you get MORE REGULATION.  Imagine a widow testifying before the Texas legislature on how she lost her baby because an asshat landlord refused to timely fix the HVAC system.  How long do you think it will be before a state senator up for a reelection drafts a bill mandating working HVACs and repairs w/i 24hours?  Who's going to vote against that?  If you think I'm joking, Texas Department of Corrections was just mandated to have AC in all prisons on the grounds that lack of AC is cruel and unusual punishment in Texas.  That's a compelling argument for legislatures and courts that landlord's failure to fix AC swiftly is unreasonable.

Moral of the story: Don't be a dick.

Keep in mind that the tenant is in possession of your property. Treat them fairly and they will be more likely to be a good steward of it.  Treat them like crap and they will treat your property the same way.

Thanks @Danny Webber @Mohammed Elzagha & @Krishna Chava . Have any of you considered buying home warranty for all your properties? 

@Jerel Ehlert - I think Danny's advice is of a firm bur fair landlord. I think someone dying and a widow testifying is too far fetched. And texas legislation? Lol- I think AC unit regulation for landlords is way down on the list and will never make it. Well the prison lobby will always find ways to make more $$ from taxpayer funds. I  really dont think you have even seen the prices to get ACs checked every fall and spring, especially with a multiple properties. It is very easy to give textbook advice (spend more $$, replace everything, dont get multiple quotes). 

Of course, I want to treat my tenants fairly, but one new AC can wipe out my entire cash flow for the year on that property, so I would love to get 2 quotes. I always manage to fix it within 24 -48 hrs. But sometimes it is a Sunday or a long weekend so an extra day can make all the difference. I think the portable AC and fan suggestion is the best mitigation I have got to buy myself a day or two. 

@Jerel Ehlert I think your opinion is valid but from a lawyer's standpoint (obviously). If you reacted to every threat a tenant made you would be in the poor house or out of business. The bottom line is unless you can find case law supporting the mandatory replacement of AC units the day they break down in Texas I will have to lean on my experience. 

Assuming someone warns you that a family member is dying due to not having AC and you do not take appropriate action at that point like calling 911 i can see how you would be open to liability. It is humorous how these what if's go to extremes... 

The tenant could come back and say i was saving so much money without running the AC that i want you to reimburse me for my increased electric bill because your new AC draws more current..... It's truly a no win if we go to extremes.

Better to treat people like you would want to be treated, get everything in writing and call 911 if a tenant may be dying in your property at any point regardless of the cause. 

Plaintiffs would have to convince a jury of your peers or judge that you acted recklessly or carelessly in the long run i think but defer to Jerel on the law stuff. 

my opinion only

It is mind blowing how may landlords just take the attitude that tenants can deal with 100 degree heat for a few days while they find some cheap contractor to do AC work. It is just how they chose to run their business, prioritizing money over customer satisfaction. I am a firm believer that businesses who don't take care of their customers will fail over time (countless examples prove this). 

My rule is problems related to temperature, water or fire all get immediate attention. That means if the AC goes out on a Saturday that I need to pay for weekend service OR drop off portable AC and fans. 

Of course everything needs to be kept in perspective. If the AC goes out in the fall when it is 75F in the day and 50F at night, then it is reasonable to have them wait a day or two. 

One other option is to be proactive and replace items before they fail. You will always pay more in an emergency, versus shopping in the "off season". HVAC people tend to be less busy in the spring and fall when the temperatures are moderate, so proactively replacing during that time will get you a lower cost. Everything has a cost per year. For example if an AC unit costs $6000 and is proactively replaced every 10 years, it costs you $600 per year. If you instead wait until it fails, maybe it lasts 15 years, but in an emergency it costs you $9000 to replace. That still also works out to $600 per year. The point is that the difference could be minimal if you just proactively replaced items. In some cases being proactive can save you money.

As far as setting expectations, that should be discussed during the lease signing stage. I would even use AC as a specific example. I tell people that I respond to problems the same way I would in my personal home for my family. For example if the AC goes out, I will call a service person, but in the mean time I will setup fans and a portable AC. If AC goes out on the hottest day of summer, expect that many other people had the same problem, so there may be a wait list before your problem is fixed.

Good luck. 

@Danny Webber You said "Maybe go buy them a portable AC unit to use and then take it back after it is fixed."  When it is in the 90s, this isn't a maybe.  That was my point.  That is poor property management and poor business judgement.

The Tenant doesn't have to warn you of diddly.  The legal standard, not your standard, is what a reasonable and prudent person would do.  This takes into account what @Joe Splitrock said, when it is in the 70s, AC going out isn't a big priority.  When temps are in the 90s+, yeah, it is a bloody big deal.  A prudent landlord would call the AC guy to schedule for the first reasonable appointment and show up within the hour to drop off window units or portables.

The law doesn't require you to treat them like you want to be treated because that is an unreasonable and unknowable standard.  The law does not assign liability for acting recklessly or carelessly - that's a higher standard of proof for gross negligence.  The law requires you to act reasonably, the absence of which is just...negligence.

The civil justice system tries to be fair, but from a practical standpoint, but when it comes to real estate investors/landlords v. consumers cases, the REI starts out in a hole. Judges and juries start out with a world of bad impressions that your attorney has to overcome just to start out on a level field. This laissez-faire approach will get a judgement against you faster than you can say "not guilty". This is my informed opinion from the trenches.

@Jerel Ehlert

I think you would be in a small crowd assuming a landlord will stop what he is doing and go drop off an AC system within an hour when a unit goes down. 

Who knows, maybe you can hunt down the people with broken AC systems and try to represent them against us bad landlords... Either way, thanks for your opinion here. All is worth thinking about.

AC issues are urgent....but rarely emergency situations.... there is a BIG difference.

The "someone could die" is a pretty extreme scenario....... the only people that are truly at risk are the very elderly or young that aren't capable of taking some basic precautionary measures. The elderly you hear die are often in nursing homes or alone at home where no one give a crap about them and they cant take care of themselves....yes it happens...but if you are physically capable of taking some action, the risks are very very tiny

I would treat it the same way I would treat it for my own family...... not paying big $$ to fix it as an emergency...... fans, portable AC units, going to the mall or the movies or somewhere cooler for the day....suck it up....life will go on while I get it taken care of as promptly as possible...urgent....but not an emergency in 99.9999% of cases.

The portable AC units are the best solution...... will do a decent job while you get the solution to the bigger problem figured out.

You should also run these questions past your eviction (tenant/landlord) attorney. At least in AZ, this is all covered in the tenant/landlord act. 

I have run into similar situations in the past. Off the top of my (non-lawyer) head, I had 3 days to get the AC fixed.  Outside of that, I would have needed to come up with other accommodations. As mentioned in other posts, I would have put the tenant up in a motel at my expense. 

As it turned out, the tenant took it on himself to move into a hotel the SAME day that he reported problems with the AC and then tried to deduct that from the rent. Per my attorney, I was not required to pay for the motel stay. Given how I handled this problem and all his previous problems, I chose NOT to pay for his motel stay.

Landlords need to learn the difference between an emergency and a maintenance issue that needs to be dealt with promptly. Tenants are not fragile flowers requiring that landlords jump through hoops every time they call.

I am quite certain that every single home in your area does not have working AC 100% of the time and when a home owners ac goes out they probably do not have, or rush out an purchase, a window ac.

Ever owner/landlord has their own priorities when dealing with tennat issues but that does not mean their policies are universally mandatory.

I personally do not have ac and have managed to survive many days this summer with the heat and humidex well into the 90s.

@Yuvaraj Vimawala You have to address these situations fast, no doubt. But you should also have good enough relationship with your tenants where they understand that things happen and repairs take time. If they owned a house, which most tenants aspire to, (but may be not), then this can still happen. Or same happen at work. Anyway, I personally don't provide anything for air-conditioning but in winter, I have purchased few portable heaters. I also have developed very good relationship with individual HVAC contractors who take care of me any time of the day or night. I speak with anyone who drives HVAC van to see if they do side jobs. By chatting with them little bit you will know if you can work with them. Same for the plumbers, when I visit Home Depot, I make a point to go to their tool rental area to see who is renting commercial snakes and ask what they do. It has worked for me and they bailed me out for the one third of the price I would pay to a company. I buy the HVAC system directly from Lennox store in my area using my contractors account and he installs it for me for only $600 to $800 depending on the complexity. I have saved tons of money this way. You have to be creative. With all my contractors, I buy the parts and they do the work. I can haggle on the price of the labor.

@Al Pat . Those are amazing tips. I try to do labor only contracts most of the time and fund supplies. I have tried building relationships with AC and plumbers, used to get all new ACs done for $2600 (parts and labor). But its transient as people move on, or have 1 bad experience. Thank you, you seem to have it down to a system. Kudos. 

How did this thread go from AC unit went out to people dying in the streets and the  Texas legislation making laws against all landlords? Oh wait....I'm from a northern state. It never gets hot here and I am not allowed to respond to a Texas question...

@Yuvaraj Vimawala ,

We had a similar situation, in mid-May, when it was like 90+ the AC unit went out... except ours was brand new, and apparently it was just a bad condenser coil... and the part had to be special ordered, and then the HVAC company (which charged us $140 to diagnose it, and everyone else was charging at least $100 to even look at it) said they couldn't fix it until the very end of June.     We got her 2 window AC units until it was fixed.   

Especially in TX, you should have 1-2 AC units as backup.  Buy some for dirt cheap off CL, they don't need to be fancy, just work and provide cool air.     We have extra heaters in the winter too that we loan  as backup. 

I guess it all depends on the type of renter relationship you have, but  if you start the "it's your problem, not mine" attitude, it's a slippery slope of the tenant losing respect for you, and the "IDGAF" attitude which could cost you a lot more in deferred maintenance.    

Originally posted by @Thomas S. :

Landlords need to learn the difference between an emergency and a maintenance issue that needs to be dealt with promptly. Tenants are not fragile flowers requiring that landlords jump through hoops every time they call.

I am quite certain that every single home in your area does not have working AC 100% of the time and when a home owners ac goes out they probably do not have, or rush out an purchase, a window ac.

Ever owner/landlord has their own priorities when dealing with tennat issues but that does not mean their policies are universally mandatory.

I personally do not have ac and have managed to survive many days this summer with the heat and humidex well into the 90s.

Canada is totally different than Austin, Texas. I have relatives in Minnesota and they will go the entire summer without AC. Maybe you see temperatures in the low 80's in the day, but it dips to 60's at night. In Texas you may see a week straight over 100F and night temps in the 80's. So their nighttime low is like your day time high. 

More importantly, you may choose to not have AC, but if a tenant rents a unit with operating AC, they are paying for a service. It is your responsibility as landlord to keep it operational.