Water Damage and Tenant Threatening to Withhold Rent

[Brett B.]

Hey All,

Need some help navigating through this.  The rental is located in NJ, there is 1 person on the lease, but her friend also lives there.  I have not gotten her on the lease as she was supposed to stay for 3 months, but now it's been 5 months.  The house has 4 bedrooms and 2.5 baths.

June 1: Tenant informs me there was a leak from upstairs toilet.  I imediatley follow claim with insurance company.  Damage went through the floor and into the ceiling and walls of kitchen and laundry room below.

June 7: Insurance company sends someone to inspect damage, set humidifiers

June 10: They come back to remove humidifiers 

June 14: Insurance submits claim and payment to me

At this point, the tenants father, who is in the business of plumbing and renovations, informs me that they seriously underpaid for the amount of damage.  He suggests I talk to his friend that is a public adjuster to see if there's a chance to get fully amount.  I reach out to the public adjuster on June 14th as well and send him all information.

July 5? (not sure exact date): Public adjuster goes to house to inspect damage

July 11: I sign contract with public adjuster to take on case

From this point on, things get hard to pinpoint.  The public adjuster and insurance company are going back and forth about damages, and I am not included in anything.  Nothing seems to be moving forward.  I call adjuster and get voicemails and no follow ups, or vague messages about how he's working on it.

August 13: I get revised estimate from the public adjuster and he sends to insurance company, and then hear nothing more

September 15: I call insurance company and go above the adjuster because I don't know what's going on.  Insurance company sends me revised payment for a little bit more. Case still remains open as I haven't heard back from adjuster yet.

The current tenant is now saying they want repairs made in 10 days or withholding rent in an escrow account with a lawyer.  They also mentioned getting reimbursed for the months they paid rent where they didn't have the bathroom functional.  

I have been ready to make repairs since this happened but there was an open insurance claim.  My thought now is to accept payment, close the claim, pay the adjuster, and be done with this headache.  Any advice or something I am missing here?  

[Scott M.]

hmmmm, so you got the payout and then you hired a public adjuster?  That is pretty backwards.  Surprised that the insurance company doesn't consider this closed unless you didn't cash the check?

Either way by involving the public adjuster you have extended the time.  They take forever but they are the proper way to go (from the start).  The one thing you don't say (that I ready, sorry if you said it) is that you have estimates on getting it fixed.  Why not see what the costs are and if it is covered by the check you already got just do it?

If they don't have a working bathroom you really need to get on this or they should be leaving, asked to leave or even told to leave by the city as you are required by law to provide a bathroom.