We have a house in New Mexico that is currently being rented. Unfortunately a number of smaller things have gone wrong and required repair (e.g. an appliance, a lock, etc) and more recently there was a plumbing issue that took the plumber 10 days to fix and in the interim, the running water couldn't be used.
We would like to prorate some of the rent for the tenant for the following reasons:
- to make up for the inconvenience of not having running water as the well system was repaired
- The tenant themselves located the repair people to address the various things that went wrong, so we would like to reimburse them for the inconvenience of contacting the repair people themselves.
We are not trying to find out exactly what the limits of the law are in terms of what we are supposed to do, but rather just want to be fair to the tenant and keep a respectively relationship. But I'm not sure exactly what would be reasonable to make up for the inconvenience of time and/or the lack of running water.
Is there some kind of standard practice about how much rent might be prorated to make up for a lack of running water, per day?
Does anyone have any standard way of reimbursing tenants for their time/trouble in cases where they go to the trouble of finding the repair people themselves (we paid all of the repair bills, so we don't need to reimburse the tenant for the repair cost, just the inconvenience of the time it took to arrange repair with local repair people)? Maybe something based on the tenant's time, or knocking 10% off the rent in a given month when they had to make a lot of phone calls to schedule repairs?
The tenant is essentially asking for several thousand dollars in rent reduction to make up for these issues, but this seems way too excessive to us. But we would like to prorate their rent to reflect what would actually be reasonable, and it would be helpful if there were some more standard ways of approaching this that we could use to explain to the tenant how we have come to our decision, so that they feel that what we propose is fair.
We haven't had this situation before--in the past we have just reimbursed tenants for costs that they actually incurred, so we would appreciate any advice from others about what standard practice might be, or about what might be considered reasonable by people who do this more regularly than we do.
Thanks in advance for any advice!
The most common way to account for the non-habitability (which lack of running water would certainly qualify) of a rental unit is to take the monthly rent amount and divide it by the number of days in the month and then multiply that by the number of days that the property wasn't habitable.
For example, if the rent is $1000/month and there was no running water for 10 days during this month (November), you would take $1000 divided by 30 (days in the month) = $33.33 per day X 10 (days with no water) = $333.33 that you would credit off their rent.
As for how much, if anything, to credit the tenant for simply calling the repair company, that's up to you. Some times it's actually easier to have the tenant schedule the visit since they know their schedule and when they're available. But if you want to compensate them for that to keep them happy, you could certainly give them an additional credit as a "good will" type gesture. Up to you though.
Thanks for the reply! The tenant did go to some trouble communicating with and organizing the workmen, so I think we will also chip in something for their time. If anyone has any advice about how you have handled this kind of thing, and you don't mind sharing, that would also be great. I'm not sure what amount might be a reasonable gesture to make up for the inconvenience. Thanks again for taking the time to give such a detailed reply!
I think some type of goodwill gesture is appropriate, but it really depends on how much you like the tenants and want them to renew the lease in the future. However, living without water is pretty inconvenient. I'd agree with Carrie W., but say that 20% off the next month's rent is probably appropriate. I wouldn't, however, go any further than that unless they've been great tenants for a long time. As far as their efforts in calling contractors, etc, that is included in the 20% discount. They still received some type of service for the time they were living there. Bottom line, [email protected]# happens and stuff breaks.
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