Fire at Duplex - What next ?

Question

Hello!

Unfortunately there was a fire on one side of my duplex which have displaced one of my tenants. Everyone is safe fortunately.

The other side of the duplex did not have any damage aside from smoke entering their property. the fire department said they are clear to stay.

I have filed a claim with my insurance and am going to get the fire department report tomorrow. Root cause of the fire is still tbd but it might be electrical.

Meanwhile, I shared some temp housing options with the displaced tenants.

Here is what I am thinking as far as next steps, but wanted to get feedback on if I was missing something. Hoping someone can provide their expertise.

1. Talk to adjuster from insurance to understand next steps with them.

2. Send out a restoration contractor to assess the damage

3. Return prorated rent to displaced tenant along with security deposit

3a. I assume I still need to do a walk through to evaluate all non-fire damages? However, I ideally would like the displaced tenant to get back on their feet sooner, so anything I can do to help...

4. Document damaged items with notes, videos and pictures

5. Board up the property

5a. How will vendors / adjusters gain access ?

5b. Lock box on property ?

6. Call utilities to ensure they’re off?

Open questions:

*Other side seems to not have any damage aside from some smoke, however, I want to ensure safety of tenant what can I do to help ensure this?

*what kind of communication should I be sharing with displaced tenant?

*should I be concerned about water damage from the fire department ? How can I help mitigate this as things move forward?

*what other items do you suggest?

Thanks in advance !

Theresa Harris · Answer

It sounds like you've thought this through and are also looking out for your tenants which is nice.  I agree with letting them out of the lease. prorating the rent for April and returning the deposit.  Hopefully they have insurance to pay for temporary housing and to replace whatever they lost in the fire.

Joe Martella · Answer

This is an interesting post and I will be following.  Are you putting the displaced tenant in a hotel?  If so, I don't think that you have to give them prorated rent.  Does your insurance policy have provisions for hotel stay?

You have to see what the main cause is.  If the cause is electrical, it doesn't necessarily mean that your entire electrical system is bad.  It could have been a bad breaker, overload, faulty outlet, faulty appliance, etc...  There could be many reasons for the cause of the fire to include tenants negligence (counterfeit electrical appliance, item left charging and catching on fire, unapproved activity, etc...).  Once you get the report, you can get a licensed electrician to inspect the electrical for the other unit if that would make you feel better.

Right now, it is a waiting game, which the anticipation is the worst.  There isn't much you can do but wait for the report, insurance adjuster, and estimate from the restoration company.  How much damage was there?  How big was the fire and how long will it take for the repairs to be done.

My thoughts are for money to not exchange hands right now.  I know you feel some type of responsibility, but know that you should have all the information before you make decisions on handing security deposits, pro-rated rent, etc...

How bad is the damage?  How long will it take to repair? If it is a month, do the tenants want to stay in the temp housing until the repairs are completed?  Lots of questions here, but I think that you need to do a step-by-step here.

I can tell you that if it is deemed the tenant's fault, I would not be giving any security deposit or pro-rated rent back.