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Hot water System burst, tenant is asking for compensation

Discussion in 'Property Management' started by Ali, 22nd Jul, 2016.

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  1. Ali

    Ali Member

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    Hello everyone, I need your opinions on following issue; I am remotely managing a property. Tenants are nice and they are with me from year a half. Yesterday they called me and told me water is leaking from hot water system. I arranged for Plumber which recommended for a new hot water system. Today plumber is installing a new hot water system.

    Now the tenant send me a text asking for compensation in electricity bill for the last quarter. As per tenant, their usual bill is around $275 but last bill is $500. They claiming that bill is high because water was continuously draining from hot water cylinder.

    My position is that as soon as they told me, I arranged a plumber and then next day installed a new hot water system so I must not compensate this electricity bill.

    What's your views on this and how you will handle the situation without damaging the good terms with the tenants.
     
  2. thatbum

    thatbum Well-Known Member

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    My view? You probably don't need to compensate them as it was fixed when reported.

    But "without damaging the good terms with the tenants"? I'd just pay it or go halves on the increase.
     
  3. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    If the water only started yesterday then I dont see how the last quarters bill is relevant as it wont account for yesterdays power.

    If the hot water has been leaking for months and they only told you yesterday, then their cost since they didnt advise the fault in a timely manner.
     
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  4. shimmy

    shimmy Well-Known Member

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    I agree with this comment. I think you will damage the good terms with your tenants if you do not help out with the extra electricity costs. It is likely they didn't realise the hot water had been leaking for ages and this has become apparent now the hot water system broke down and electricity bill came in higher than normal.
     
  5. Phase2

    Phase2 Well-Known Member

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    You'd be within your rights to refuse them. There's no proof that the HWS was leaking sooner than reported, and you've acted immediately to rectify the problem.

    If you are concerned about keeping good-terms with the tenants you could tell them that you'd consider their request if they give you a copy of all their bills since they moved in. You might see a seasonal pattern in electricity use from aircon or heating. ie same quarter last year might have been a similar sized bill.
     
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  6. Darren

    Darren Well-Known Member

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    I am renting and a few weeks ago when the weather was freezing and snowing in the blue mountains I had the hot water system fail, having to take cold showers after surfing in winter isn't fun.
    The owner delayed having it replaced due to it being a very expensive system and wanted extra quotes, it was 6 full days until it was fixed. Didn't even get an apology from the owner let alone compensation.
    Probably thought they saved me money on my gas bill haha.
     
  7. wylie

    wylie Moderator Staff Member

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    I'm with the others who suggest that they didn't notify you of the leak, so you have done all you could do once notified. But for a good tenant, I would meet them halfway rather than have them feel bitter about it. Be aware the next bill is likely to be high too, and they might ask for more money. Our water bills are three months behind (in Brisbane).

    Edit: I actually don't charge for water for the first bill because I'm too lazy to read the meter and calculate the usage and then try to explain it to the tenants. The usage cost is so cheap compared to the infrastructure charge we have to cover ourselves anyway. So I wait until the "usage" period covers the time they've been there and charge from then.
     
  8. S.T

    S.T Well-Known Member

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    It's also winter, electricity bills are higher. Might want to get them to compare with last year's.
     
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  9. Xenia

    Xenia Adelaide Property Manager Business Member

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    They are definately not entitled compensation.
    Access denied!
     
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  10. Scott No Mates

    Scott No Mates Well-Known Member

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    As per @S.T - it's winter they'll use more energy. Is the hws gas or electric?
     
  11. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    Is the HWS instantaneous or off-peak? In the case of the latter, the electricity bills won't change much and their higher bill is probably due to some other usage like an electric heater or aircon.
     
  12. Lil Skater

    Lil Skater Well-Known Member Business Member

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    You've done what you need to do and replaced it immediately.

    As for the electricity bill, it's winter. We have gas ducted heating here at home, normal bills are less than half what they are in winter because of the heating.

    In my opinion they're not entitled to any compensation as if it was leaking for months it's their own fault, and if it wasn't then there's no way their bill would be so high overnight. It's your choice which way you go though, if you want to play nice you could offer them some form of compensation but I probably wouldn't in this scenario.
     
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  13. wylie

    wylie Moderator Staff Member

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    I agree with those who say there is no need to tip in at all. However, as I posted before, for a good tenant, I'd rather offer $100 of the overspend than lose any goodwill.

    It is $100 "income" I wouldn't be claiming and I think it is a pretty cheap way for me to show the tenant that I'm not a hard hearted landlord.

    I see it as win/win. We've had tenants before who have asked for stupid things, and we've said no, and for some tenants, that just means they try to find some other way to get a "win".
     
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  14. fullylucky

    fullylucky Well-Known Member

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    Don't give them anything.

    See 6th dot point here, tenants are jerks...

    If you are thinking about starting Student Accommodation Please Read this First.

    They only notified you once they got a high bill...

    You did the right thing and called plumber asap. Didn't do anything wrong so why should you compensate?

    Only if they are the best tenants in the world and worth keeping etc then compensate even if you are right and they are wrong.

    also another thing, it's winter so $200 increase in electricity bill is very normal. Seems like they are trying to capitalise on this event.

    When the ambient temperature is different to the 70 80 90 degrees hot water the bigger the difference the higher the heat transfer (losses).
     
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  15. fullylucky

    fullylucky Well-Known Member

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    kmart fan heaters...
     
    Last edited: 22nd Jul, 2016
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  16. Ali

    Ali Member

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    Thanks everybody for your opinions and suggestions. I was just making sure that if I refused to pay then legally I am on safe side.

    But as most of you suggested that maintaining good terms and refusing to pay is not possible, I offered them $75 discount on their next weekly rent. Which I think is appropriate as I am paying almost 50% of extra electricity bill.

    Once again thanks for taking time and giving your valuable inputs.
    Have a great weekend
     
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  17. Azazel

    Azazel Well-Known Member

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    Make sure any agreement is in writing.
     
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