Should tenants get a one time reduced rent

20 Replies

This summer in the middle of the heatwave, the AC went out on our rental. It took four different technicians and about 5 weeks to finally fix it fully. It would work for a little then go out again. The tenants have been patient and gracious. We have been very responsive to them also. Even spending $1000 to buy 3 portable units so they could sleep at home. They have kids including a baby. During this they spent several nights at her mom's, at out a lot, and now have a high electricity bill. They are caught up on rent but are struggling to pay. We are thinking about giving them a one time reduction in rent. Looking for opinions, pros, cons.

I'll probably be the minority here, but I would give them a slight reduction in rent or subsidize their electric bill. You did everything you could/were supposed to, but I feel having a little compassion can go a long way. I assume they are good tenants. Not sure what their rent is, but if you can afford a couple hundred off their rent for one month, or split it between a couple months to make it less of a burden on you, I'm sure it would be appreciated by them. I know this is a business to make money, but if they were to move out or you had to evict because they can't afford the increased electric bill and the rent, then you'd be out even more money with vacancy and turnover costs.

I would find another way to show that you appreciate them and their way of handling the hassle like a grocery gift card. Setting a precedent of reducing rent gets into slippery slope territory but a one time gift of something equally valuable has a different feel.

How long have they been your tenants? do they always pay on time and you have no issues with them? giving credit my go into a bad road depending on the type of people your tenants are as they might expect it again down the road. if they are great tenants, never bother for the small stuff and you want to keep them, I would give them a small reduction on rent to help them off set the electricity bill. Living with no A.C in the summer is brutal but think of all the outcomes before you provide a credit.

I agree that a rent reduction goes into dangerous territory. Offer to pay the electric bill for a couple months if you are feeling generous.

As you are probably aware, AC on and off for 5 weeks is pretty extreme and I think you should definitely spend some time in the next couple months to beef up your vendor/tradesmen database. Clearly at least 3 of those HVAC technicians aren't great. I try to fix HVAC problems in 24 - 48 hours so they can have a comfortable home at minimal extra cost to me.

No, Rent rebates/reductions is a business practise you do not want to set a presidency on with these tenants. It opens the door to them asking for a rent reduction every time there is any slight inconvenience. Thank them for their patients and leave it at that.

As for the electric bill you went out of your way and spend beyond a necessary amount to insure their comfort. It was their decision to use the window AC units. Leave it at that.  

I wouldn't do it. The rent is what the rent is. I don't know where your rental is but no AC makes a house uncomfortable but not unlivable. That's different from a massive flood or a fire. I'm not sure the electric bill would be higher, as central heat & air is usually more energy consumptive than a window unit. 

I suspect you're suffering from a bit of guilty conscience, which is probably warranted as it shouldn't take 5 weeks and 4 techs to fix an AC unit. There's not that many moving parts there. As for the tenants, not having AC doesn't mean you have to eat out. I can't see  that they should be struggling to pay rent because they had to eat a few meals out and sleep on mom's couch. 

Your lesson here is to have competent technicians and to replace junk when it becomes junk. If you give them a rent reduction, they're going to expect it the next time the junky AC system blows up (which is probably not too far off if you had to have people out that many times). 

Thank you for all your thoughts. Super helpful! There's obviously more details to the story and lots of lessons learned here. It wasn't a junky AC unit (6 years new). The issue ended up being a warranty item. This was a case of a bad property manager (that we fired). And yes a vendor database is gold! But something you don't usually keep up on when you have a property manager. I love the idea of a bonus instead of a credit. You guys are right, it sets a bad expectation. We decided to offer them an option: a gift card for groceries or a new shade cover for the backyard. Hoping they pick the shade cover as it will be both an improvement to the property and a write off. The lesson for us here was to always periodically check up on your property management. We aren't quite sure yet what systems to put in place for that. Had considered maybe a yearly tenant survey that, if returned, gets them a $10 gift card to coffee or something.
They could have been a real pain in your side with this dragging on for 5 weeks during summer. I’d do something as a token of appreciation. Everyone wants to be a hard *** and say it’s a business, so cut no breaks ...we’ll business is also built on relationships over time and respect. Show your appreciation and next time there’s a problem, maybe they’ll give you some time to fix so you don’t get slammed with emergency repair pricing.

I have done rent reductions for things like that in the past but it depends on the situation. You say they are struggling to pay rent, then it may be a deeper issue than the AC problem. When I gave a rent reduction it was to a tenant that had been with me for a couple years and never had a late payment before or since. Just depends but like a lot of people have said, this is a business and as much as I hate saying it, we landlords need the tenants to make the investments work so you gotta have a little compassion without getting walked all over. 

@Jenn A. Not only would I not pay out anything ... but I would be looking for new tenants based on the “ struggling” aspect they are dealing with . I don’t want to “ struggle “ to pay the mortgage taxes and insurance so I’d be looking to get them out if they fall behind Business is business . You’d be setting a bad example and training them incorrectly if you bought them gifts or reduced the rent . Why would anyone want tenants that barely can make the payment ?
@Jenn A. Imo part of the deal is providing a home with consistent functionality. At minimum I would pay the increase of the electricity bill and I would probably pro rate them the nights they had to sleep out. That may not be the most shrude business decision but it seems fair to me. I'm also not the world's best property manage lol
I would say definitely not, I agree with the other poster who said a grocery gift card, that would be an excellent way to help out. The best part is they most likely won't ask you "Hey, can I get another grocery gift card?" Bur they very well may ask "Can you reduce our rent this month, just one more time??"

I don't feel that rent concessions are appropriate due to maintenance issues but five weeks is a game changer.  I imagine that time period was miserable for both you and the residents.

Did you do everything humanly possible to get the HVAC system dealt with as quickly as possible? Do a good job communicating when there were issues out of your control that delayed it?

If so, you have ZERO to feel guilty about...... stuff happens in life....get over it. If they owned the place, would they get a discount on their mortgage that month? Did you ?

At best, I would send them a gift card in appreciation for their patience with the issue taking so long

Do not apologize...... say 'I appreciate your patience with this taking so long...here's a $50-100 gift card to take the family out to dinner...thank you for your understanding". Apologies shift blame to you

Yes this business can be built off customer service and good tenant relationships.... treat people with respect and dignity....don't be an a-hole. But don't concede control in the process of doing that...

DO NOT GIVE A RENT DISCOUNT...... this will only give them leverage to try and squeeze in other things that may generate a reduction in rent. The rent is the rent....no exceptions..... any other costs are outside of rent..period

@Jenn A. I’m like other ppl, you only need to give them a grocery gift card. You already did your best to fix the AC unit & bought portable AC. That’s more than enough.
@Jenn A. No AC in the middle of a heatwave? Definitely should at least give a grocery card. I am not sure how long it was before the window units came into play, but any nights without them were probably hell, and dangerous for the child. Of course this is not something that was within your control and things happen. I have an arrangement with my friend where I stay with him one or two nights a week for cash, and his air went out. He only had a window unit for his room. I can tell you that even as close friends, when he told me “too bad, pay up” I was furious. I was unable to sleep. Got maybe 2 hours a night before work the next morning. I stopped staying with this “friend”. The point I am trying to make is, I liked the guy and resent him now. Your tenants had a much longer period to deal with No AC which is no joke in a heat wave. You should do something to help if you were not able to provide the window units in a timely fashion.