My Rental Property Flooded

7 Replies

Looking for advice.... My rental property flooded. The toilet (feeder line) broke on the 2nd floor while the tenant was not home and did quite a bit of damage. The unit needs all new flooring/carpet,Sheetrock (walls/ceiling) , tile, base boards, paint, etc. In the current enviroment, it is tough to find labor and I expect this project will take 2 months to get all the materials and labor. The tenant still has 7 months on their lease. They are wanting to try and stay duing the renovation, yet I do not think it is a good idea. Can I terminate the lease?...Any other options? My insurance will cover lost rent.

I had something similiar with a tub spout that was slowly leaking into the walls for a month before catching it. My insurance covered everything and actually more. They wrote me a check and i was able to find my own contractors for a lot less than what they got estimated from a contractor they sent out. My tenant allowed me to install all new floors while they were living there. It was about 1600 sqft 2 story house and if you can find the right guys they can knock it out in less than a 3-4 days. Im not sure why yours would take 2 months but you can get all new flooring material from places like home depot, costco, lumber liquidators. Perhaps you have way extensive drywall repair than i do. Mine was just couple walls on the first floor and one one near the bathroom where it was leaking. 

As a Contractor who has (unwisely) taken on projects where the resident stays on site for the duration of the project....I would ask your tenant to leave, esp if your insurance covers it. Throw a few bucks to the unfortunate tenant as well. The contractor will add on 20% or more to his ticket if there are people on site. He's gotta start late, stop early, plastic sheet everything every day, worry about his crew (or subs) taking something of the tenants...Etc...you get it I'm sure....

You may not even find a Contractor in todays climate. As a matter of fact, if you did, I would be very wary.  Why would anyone would take on a project with all this extra crap, when they can get any other job they wanted?

I think if you can claim the house is a house hazard and unihabitable then you can get your tenant to terminate the lease. Mention like there might be mold growth. If you have awesome good tenants then it maybe worth to try and keep them though but if your rent is below market and tenants are less desierable i would certainly try to pull that card. 

How many bathrooms are in the unit?  If there is only one, then it is a no go.  Your insurance should cover the repairs, let them deal with it.  Tell the tenant they need to move out and (if they are a good tenant) they can have the first chance to move back in once it is fixed.

This has happened to me twice, my only big claims. (I bet your supply line is a metal one with sheathing that looks like snake skin or knights armor, not braided.) It MIGHT come down to your insurance company. Mine (Allstate) paid service-pro an insane amount of money ($30k+ each time) and they finished within 2-3 weeks and the tenants stayed. 

You might see if you have tenant relocation ride that will pay for them to stay in a hotel room. (I didn’t and still don’t.)

Jeff, since you live in Frisco, TX, I assume that you property is in Texas.  See Texas Property Code Section 92.054.

Sec. 92.054. CASUALTY LOSS. (a) If a condition results from an insured casualty loss, such as fire, smoke, hail, explosion, or a similar cause, the period for repair does not begin until the landlord receives the insurance proceeds.
(b) If after a casualty loss the rental premises are as a practical matter totally unusable for residential purposes and if the casualty loss is not caused by the negligence or fault of the tenant, a member of the tenant's family, or a guest or invitee of the tenant, either the landlord or the tenant may terminate the lease by giving written notice to the other any time before repairs are completed. If the lease is terminated, the tenant is entitled only to a pro rata refund of rent from the date the tenant moves out and to a refund of any security deposit otherwise required by law.
(c) If after a casualty loss the rental premises are partially unusable for residential purposes and if the casualty loss is not caused by the negligence or fault of the tenant, a member of the tenant's family, or a guest or invitee of the tenant, the tenant is entitled to reduction in the rent in an amount proportionate to the extent the premises are unusable because of the casualty, but only on judgment of a county or district court. A landlord and tenant may agree otherwise in a written lease.

Also, check your Lease provisions.