Tenant asking me to cover high utility bill

Rental Property Investor · Moseley, VA · Member since 2018 · 19 posts · 6 votes

I have a utility bill question. My tenants are required to pay their electric bills. However, my HVAC unit needed a part so the tenants ran on emergency heat for 12 days. This has the unit run off the main power source. As a result, the electric bill was $100 higher than usual. Should I pay for the $100? My gut says yes, but I don’t want them coming to me every time they have a high bill.

Thanks for the help!

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Colleen F.Pro Member

Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes

So I got to look up and learn a little about heat pumps today. It seems you have a heat pump and if you use emergency heat either because of low temperatures or a problem with the heat pump there is a higher cost because it is basically resistance electric heat, not the more efficient heat pump. If it were me and they were there a year I would look at it in relation to last years bill to see if it is out of line for the same time last year (not last month). If it is, you might credit them for the total impact of this repair rather then say I am paying part of the electric bill. Say this credit/gift card etc would be compensation for the impact of the repair in total. Any days of no heat etc. I find it cleaner that way. The amount is up to you.

I recently had tenants with a needed oil tank change out and I credited for lost oil and days with no heat. They stayed in the house and opted to use an electric heater but I did not pay the electric just rebated the rent for those days.

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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
7y
How long have they been in the home? Were the higher costs only due to emergency heat or due to normal colder weather in winter? If they've been in the house over a year, you can look back at their costs last year. I'm assuming the HVAC runs off gas or some other energy source, did that bill go down for the month? I'd probably also pay it as it is $100, but I'd also get some more info from them.
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Joyce Tavares
Real Estate Investor · Hayward, CA · Member since 2015 · 134 posts · 88 votes
7y
I would pay it since they were on emergency heat due to the length it took to get the part for the unit, and would
thank them for their patience.
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Colleen F.Pro Member
Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
7y
So I got to look up and learn a little about heat pumps today. It seems you have a heat pump and if you use emergency heat either because of low temperatures or a problem with the heat pump there is a higher cost because it is basically resistance electric heat, not the more efficient heat pump. If it were me and they were there a year I would look at it in relation to last years bill to see if it is out of line for the same time last year (not last month). If it is, you might credit them for the total impact of this repair rather then say I am paying part of the electric bill. Say this credit/gift card etc would be compensation for the impact of the repair in total. Any days of no heat etc. I find it cleaner that way. The amount is up to you.
I recently had tenants with a needed oil tank change out and I credited for lost oil and days with no heat. They stayed in the house and opted to use an electric heater but I did not pay the electric just rebated the rent for those days.
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Shane Woodman
OP
Rental Property Investor · Moseley, VA · Member since 2018 · 19 posts · 6 votes
7y
@Theresa Harris they have been in the house for 2 months. It is not gas heat. We have a heat pump that runs off of the electric when switched over to emergency heat. They could have run the heat without the emergency, but could have done damage to the HVAC unit.
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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
7y
@Shane Woodman Can you call the utilities and find out costs for last Jan? I don't know enough about how efficient heat pumps are (despite one of my rentals having one) to know if a $100 increase is reasonable. One site I found where they sell heat pumps (so biased) showed a $120/month saving (eastern Canada) with the heat pump.
If they were on emergency heat for Jan and the heat pump was fixed for Feb, you could always ask to see the difference in their two bills and offer to pay that amount.
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Mike Groseth
Liberty Township, OH · Member since 2019 · 5 posts · 0 votes
7y
I have had a similar experience with a SFR in MI. In my experience I gave them the $ to help them out since technically they were dealing with a MUCH colder home while I was working on the heat pump to get it back up and running again. I figure that if they had kept off the emergency heat and damaged your HVAC equip that would have cost you much more.
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Chris Szepessy
Catskill, NY · Member since 2018 · 636 posts · 668 votes
7y
It's hard to tell how a tenant is going to be only two months in, but I would give them the $100. I had a similar issue with (great) tenants of mine. The hot water heater was leaking causing it to run constantly, so their electric bill went up about $100. I took the $100 off their rent and they were extremely thankful. I felt it was the right thing to do.
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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
7y
You have to determine if the overage is completely due to the heat source or if it was also due to colder temperatures. We just had a cold snap across the country and that could be a big part of it.
To keep it simple, you could offer to split the difference. The problem wasn't due to your negligence and they took responsibility for the utility use so it's fair for them to suck it up.
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Jason Young
Contractor · Meeker, OK · Member since 2018 · 13 posts · 9 votes
7y
@Shane Woodman
Was it a lot colder temps than normal sounds like the electric heat was having to run quite a bit if it racked up a extra hundred on the bill that fast. As temps drop heat pumps loose efficiency on the first stage of heat and have to fire the second stage in your case that’s the electric heat. I’m asking if you had really cold weather during that time frame they would of seen a increase in their electric bill anyway because the unit would have been running both stages of heat to keep up with the load of the house. So if it was really cold durning that timeframe the electric heat would of been running anyway. So if that’s the case I would say no I wouldn’t help out with the additional cost because it would of been normal. Maybe even a little cheaper if it was really cold because they weren’t running both stages of heat
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Shane Woodman
OP
Rental Property Investor · Moseley, VA · Member since 2018 · 19 posts · 6 votes
7y
Thanks for all the input. I decided to split the bill 60/40 and provided a credit toward their next months rent. The temps were considerably higher during the past month. It is my belief that there was nothing they could do to keep that bill down.
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Ned J.Pro Member
Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
7y
Since they have only been there 2 months, you have no reference for it truly being $100 more than it would have been if you didn't have the HVAC issue...
Even without the HVAC issue, their bill may have been $75 higher than the last 2 months purely due to the fact that it was colder that month. You are assuming that their bill went up $100 only due to the HVAC issue....but its impossible to prove either way.
The 60/40 split is a reasonable compromise..... I however NEVER do any $$ exchange as a credit towards the rent. The rent is the rent...PERIOD. Any expenses are handled as expenses....I write you a check etc. When you start giving "credit" towards rent, tenants tend to find other ways to try and earn "credit" towards their obligation to pay rent. It starts a mindset that the tenant can pay you in other ways than the actual rent...bad idea. Plus from a bookkeeping standpoint, tax write offs etc, its a bad practice. Keep them separate....
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Shane Woodman
OP
Rental Property Investor · Moseley, VA · Member since 2018 · 19 posts · 6 votes
7y
@Ned J. Thank you for your input. Temperatures during that period were not cold. We have had a mild winter. During my rehab period, the electric bill was consistently $100 less and my previous tenant confirmed her bills to me.
I agree about the credit. That is bad practice and will not transfer that to other properties.
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Elenis Camargo
Property Manager · Jacksonville, FL · Member since 2018 · 514 posts · 470 votes
7y
@Shane Woodman It depends. Did you know that it needed this part and it just took long to get the part in? Or did they not report the issue till the last minute? If you knew about it then you can deduct $100 off next month's rent and let them know it'll be a ONE TIME deduction due to the HVAC issue. I wouldn't go giving them cash or paying the bill directly at all. Now if they reported it late then it's on them to pay the extra $100.
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Shane Woodman
OP
Rental Property Investor · Moseley, VA · Member since 2018 · 19 posts · 6 votes
7y
@Elenis C. Thanks for your feedback. They reported it immediately and I advised them to switch to emergency heat so the unit could thaw. After that, it took 2 days to get the technician out there and then another 12 for the part to arrive. They did the right thing by bringing it to my attention. It is my belief this could have cost me much more if not reported properly.
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Shane Woodman
OP
Rental Property Investor · Moseley, VA · Member since 2018 · 19 posts · 6 votes
7y
@Theresa Harris I really like that idea. I’ve already made an agreement on this particular issue, but that’s a nice tactic.
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Elenis Camargo
Property Manager · Jacksonville, FL · Member since 2018 · 514 posts · 470 votes
7y
@Shane Woodman That's great that you have attentive tenants. I would give them the $100 off their next rent then. They'll appreciate that and continue being good tenants :)
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Matt M.
Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
7y
@Shane Woodman
Its not even worth figuring anything out or wasting your time debating. It’s $100.
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