Who Pays for Water Damage in Rental?

Question

Hi Fellow Investors! I have a rental property (condo) and the tenant is the absolute best. She recently told me that the one kitchen cabinet was "wet", so I had a plumber go out to fix the problem. Come to find out that the dishwasher I installed a few years ago has been slowly leaking. It's now at the point where the base cabinets are swollen with water & mold is growing under the kick plate areas & up the bottom parts of the walls. How no one noticed before I have no idea, but it looks like I will have to replace all base cabinets, all wall cabinets (so everything matches), countertops, and do mold remediation.

Has anyone experienced something similar? How did you handle? Who paid: landlord, tenant, insurance, other creative ideas?

Thanks!

Has anyone experienced something similar? How did you handle? Who paid: landlord, tenant, insurance, other creative ideas?

Thanks!

Rodney Sums · Answer

Unless you can demonstrate the tenant did something willfully to cause a leak that'll be your cost.  If you weren't implying the following then excuse me.  I understand you may feel she should have noticed and told you sooner.  The same can be said for you doing your routine inspections of the property if you were doing them.  You can file a claim with your home owner's insurance.  You'll have to fork over the deductible.

Austin Jones · Answer

Thanks everyone for the input, it is very much appreciated!

Tracy Streich · Answer

@Austin Jones Sounds like a landlord issue for sure.   Would have to show will full negligence on the part of the tenant...

Bo Bond · Answer

Austin,

You mentioned that this is a condo unit.  If that's the case, you should certainly visit with the condo association board about the loss to see if their policy should/would respond to common area damage in your unit.  Condo insurance is set up in 3 different ways (bare-walls, walls-in, and all-in), so there's a chance you could be protected by the association's master property policy.  However, if the claim is as small as it sounds, your damages still may not surpass the condo association's policy deductible either.  Either way, you should visit with them about this as they may be responsible for any damages to the common areas of a unit when damages are less than the condo association's deductible.  If this loss is really pretty minimal, then it's always easier and better to pay out of pocket when you can afford to do so.

Nathan Gesner · Answer

I doubt it will qualify for an insurance claim and I don't see how you could justify charging the Tenant when they haven't done anything to cause the leak. She reported it as soon as she discovered it, which is what you want.

Pay out of pocket.

Rodney Sums · Answer

@Austin Jones to Bruce's point about newness, the repair may be a tax deduction for you as well given the cause of the damage and how much it'll cost.  Ask your tax pro

Bruce Woodruff · Answer

Probably on you. But don't feel that you have to replace all the cabinets. A lot of projects now have different colors for the walls and bases. It's considered the new thing.....

Chris Seveney · Answer

@Austin Jones

This is a case where I would recommend paying out of pocket

Insurance deductible probably will be more or close to amount of work

Tenant would only be responsible if they caused the leak and proving they did would be almost impossible

Austin Jones · Answer

@Rodney Sums thanks for the feedback. I thought this was the case but definitely helps to ask around in the forums to double check. Happy holidays & all the best.

Who Pays for Water Damage in Rental?

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