Tenant flooded my 2 family. Best options?

Tenant flooded my 2 family. Best options?

Investor · Clifton, NJ · Member since 2017 · 53 posts · 54 votes
Short version: my tenant (without my consent) tried to fill their own steam boiler, and ended up flooding my entire two family from the top down with dirty water from the radiators leaking through the radiator vents. I’m currently in the cleanup process with Servpro drying the place out, and moving forward there will be a lot more work to be done(carpet removal, opening walls to check for damage, insulation). Both of my tenants are on month to month leases currently so it would be easy to part ways with them by giving my one months notice. Which I’m currently thinking is my best option, since i won’t know the construction timeline and can’t make any promises on living space. Also, it’s only fair to them to let them pursue other arrangements; i would let theM go now if they wanted. I feel badly, but i don’t think it’s my responsibility to find them housing. One tenant is being very understanding and cooperative. The other(the one that caused the damage, ironically) is being very difficult. Giving me a hard time at every turn, attempting to deny me access to the contractors who are trying to make the house safe. I originally didn’t lay blame, or pursue damages from this tenant to reimburse my insurance deductible, but his behavior now is making me regret that. You try to be nice about it.... When all is done, I’d love to have tenant one back, but i can’t guarantee them housing at this point so that’s no given. Tenant two seems like the type to cause me a lot of problems, i think I’m going to post notice to end their lease, and may even consider a cash for keys situation (even though they should be giving ME money!) . Any input would be appreciated. Never been in this sort of situation before. Thanks, people.
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Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
7y

Your lease (and possibly the law) should allow you access to the unit to make repairs. Inform them that you will need access every day from X AM to X PM until the repairs have been made and if they are unhappy about it they are free to leave. If they block access, contact the police non-emergency line and ask that an officer come out.

Given the fact they are being difficult, I would get them out ASAP. I don't know New Jersey laws and thought they were very hostile to landlords, but if you can legally get them out, do it. Perhaps the scope of repairs will make the place uninhabitable? One thing to consider, your insurance company doesn't just pay out the money and forget about it, they are going to look at your tenants for reimbursement of all the repair costs. They may look at your tenants and figure it is a lost cause and just eat the loss. However, they may feel they can get some money back and file suit against them. If your tenant declares bankruptcy over the debt, they could potentially stop paying you rent while it works its way through the court.

And absolutely take your deductible from their security deposit.

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  • Investor · Clifton, NJ · Member since 2017 · 53 posts · 54 votes
    7y
    For the record, i formatted all of that, but I am on mobile. @Robert Resz
  • Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
    7y

    Your lease (and possibly the law) should allow you access to the unit to make repairs. Inform them that you will need access every day from X AM to X PM until the repairs have been made and if they are unhappy about it they are free to leave. If they block access, contact the police non-emergency line and ask that an officer come out.

    Given the fact they are being difficult, I would get them out ASAP. I don't know New Jersey laws and thought they were very hostile to landlords, but if you can legally get them out, do it. Perhaps the scope of repairs will make the place uninhabitable? One thing to consider, your insurance company doesn't just pay out the money and forget about it, they are going to look at your tenants for reimbursement of all the repair costs. They may look at your tenants and figure it is a lost cause and just eat the loss. However, they may feel they can get some money back and file suit against them. If your tenant declares bankruptcy over the debt, they could potentially stop paying you rent while it works its way through the court.

    And absolutely take your deductible from their security deposit.

  • Investor · Clifton, NJ · Member since 2017 · 53 posts · 54 votes
    7y
    @Greg M. Thanks for replying. The work will be extensive. All carpet in both apartments being removed and replaced. Walls being tore down. Maybe insulation. Definitely uninhabitable IMO. I’m going to draw up the notice to end lease tonight and offer to release them ASAP. I sense I’ll be getting some pushback. I’m going to do the same for the first floor. Insurance should cover rent until the repairs are done and they’ll go smooTHeR if the house is empty.
  • Investor · United States · Member since 2015 · 415 posts · 487 votes
    7y

    I would definitely charge them for the deductible if the damage was caused by their negligence (assuming your lease says they're responsible for damages they cause). 

    The two times I have had a tenant who's a pain and isn't happy with the space or is being difficult for whatever reason, I have asked them if they'd like to end the lease early. Both of them accepted the offer, and we were both happier for it. If it's not too hard to find a replacement tenant, I'd just move on from them. The most difficult 20% of tenants cause 80% of the headaches.

  • Nathan GesnerBusiness Member
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    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    7y

    The tenant is liable for the damages so why is he pushing you around and being difficult?

    I would notify both tenants that the house is uninhabitable and they need to move out immediately. I would give them a week to 10 days. I may be kinder to the tenant that was a victim.

    If the tenant refuses to let contractors in, even once, I would hit him with an eviction notice.

    I would also charge the responsible tenant for my deductible and anything not covered by insurance.

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  • Investor · Vancouver, WA · Member since 2013 · 3k+ posts · 4k+ votes
    7y

    If the units are truly uninhabitable, then the tenants need to vacate now. Where they go and for how long depends on the how soon you can get the units repaired, what you would like to do, and what the tenants would like to do.

    It may be possible to get the repairs done more quickly than you think. If it can be done in less than a month, then talk with tenant #1 about temporary housing options and storage for their belongings until their unit is ready. Give them the option of terminating the lease or waiting for the unit to be repaired.  

    As to tenant #2 who caused the problem and is being difficult, hold him culpable. Now would be the time to talk with him about a move-out plan. Give him the choice of voluntarily moving and release him from the lease without penalty. If he doesn't agree to that, then proceed with eviction.

    Establish a policy to require Renter's Insurance and make sure the tenants get it and maintain it.  It's relatively inexpensive. Have yourself added as an "additional interest" so the insurance company can notify you if a tenant drops their insurance.

  • Rental Property Investor · Edison, NJ · Member since 2016 · 753 posts · 565 votes
    7y
    @Robert Resz. I would call a real estate attorney tomorrow to find out the quickest way to get them out. Then take the lawyer’s advice.
  • Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    7y
    You are being much nicer than most landlords . Get the tenants out and I’d hit the idiot that caused this issue with as much of fees as possible . Completely ridiculous . Donot let hIm push you around !
  • Rental Property Investor · Closter, NJ · Member since 2015 · 884 posts · 722 votes
    7y

    Perhaps get an automatic fill valve on that steam boiler.

  • Rental Property Investor · Closter, NJ · Member since 2015 · 884 posts · 722 votes
    7y

    And evict that tenant

  • Member since 2016 · 13k+ posts · 12k+ votes
    7y

    Robert you have a very unusual response to your situation. Not sure how you survive in this business without knowing your state codes or your own rights.

    Hopefully you will not continue to allow your tenants to walk all over you in the future.

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