Owning a rental property requires that you cover all your bases, and keep your tenants in the know. In doing so, one must cover all the bases and legalities in the rental agreement, ensuring that both you and the tenant are on the same page. And one thing is to be sure: never underestimate the amount of headaches you can have with rental property appliances…
When my boyfriend moved in with me about a year and a half ago, he decided to rent his place out for some extra rental income. Because we were combining households, we had no need for his washer and dryer, BBQ, or refrigerator. He figured that he’d be a nice guy and offer those items to potential renters for their use while they remained renters.
The washer and dryer were nice front-loader models, and had many years of useful life left. The BBQ was just a little free-standing propane deal. The fridge was an old battle-axe from many decades ago that just refused to quit. It was ugly, and we considered hauling it out of the kitchen for property showings because it was so unattractive, but we figured we’d leave it there in the off-chance a tenant would want to use it.
I asked the boyfriend what he wanted to happen if those items broke. Would he offer to replace them, or would he expect the tenant to replace them? He said if they broke due to normal wear and tear, he would want the tenant to replace them, and then the tenant would own the replacement appliances. Essentially, they weren’t supposed to be considered as part of the items he would agree to provide with the rental, they were just “bonus” items that the tenants could use so long as they were working.
My boyfriend has never been a landlord before, so he’s learning the ropes with this one. I told him that when he showed the property, he should be careful to mention that the fridge, BBQ, and washer/dryer could be left behind for the tenant’s convenience, but that they were explicitly not part of the rental, so if they broke due to wear and tear, it would be up to the tenant to replace them.
Why Do You Need to Specify What’s Included in the Rental?
If you don’t specify what’s included in the rental and what isn’t included, then you could be setting yourself up for a problem. The laws of your state may vary, but the general rule is that if you advertised your rental as coming with a fridge, or if the tenant saw the fridge during a walkthrough, or you told them that the fridge would be there when they moved in, then you are responsible for ensuring that a fridge would be available during the entire lease term, unless you and the tenant agree to a different arrangement.
So let’s say you’ve got a leftover fridge from a prior tenant, and you tell the next prospective tenant that the fridge was left behind, but that the new tenant can use it if she likes, or dispose of it. Well, as soon as the refrigerator breaks, expect a call from the tenant insisting that you either repair or replace the refrigerator, or reduce the rent amount to account for the cost of renting a replacement refrigerator.
But you said it was left behind, and that you didn’t care if she used it or trashed it, right? So obviously you weren’t taking any responsibility for the fridge, you were just trying to be the nice guy. Surely the tenant would understand that you meant you weren’t going to replace it if it broke, right? Not necessarily. You need to protect yourself (and set clear expectations for the tenant) by clearly defining your responsibility for the appliances in writing.
Do I Really Need to Have It in Writing? Can’t We Just Verbally Agree?
You’ve heard the saying: “Oral agreements aren’t worth the paper they’re written on.” Some people forget, and other people lie, and either way, you’re probably going to be on the hook if you don’t have something in writing to protect you. A really good rental agreement is worth its weight in gold.
Imagine this scenario: the fridge breaks, and your tenant says you have to replace it. You remind the tenant that you were providing the fridge as a courtesy, and that you specifically discussed that it would be her responsibility to replace it if it broke. She doesn’t remember that conversation. Now she’s angry.
She pays her rent a few days late, minus $50, which is approximately the cost of renting a replacement fridge. You demand that she pay the last $50, and she refuses. A few months of this go on, and while it seems silly to evict over $150, you eventually decide that you have to evict her or she’s just going to continue to fall farther behind.
You file the eviction action, and she disputes it. The two of you end up before the judge, and you tell the judge that you specifically told her at the beginning of the tenancy that the fridge was not included. She says you never said any such thing. She says she’s just a poor [insert occupation here,] and you’re a big, mean landlord, and she specifically rented your place because it included a fridge and she couldn’t afford one otherwise. The judge asks to see your rental agreement, and asks why you didn’t specify that the fridge was not included as part of the rental. Now you’re hosed.
You may get the rare judge who is biased toward landlords, but in most cases, you’re going to look like the person who is more sophisticated (you own rental property!) and more financially able to afford the cost of a fridge (you own rental property!) and more responsible for the failure to address this situation in the rental agreement (you wrote your rental agreement, not the tenant!).
Real Life Scenario
In my boyfriend’s case, I said he needed to explicitly tell prospective tenants that those items were not included in rent. In addition, I insisted that we put it in the rental agreement. We didn’t bury it in the middle of a paragraph, either. We put it in a paragraph clearly titled “Appliances Included / Not Included.”
Guess what happened? The fridge broke, and over a series of emails, the tenant said she expected a discount in the rent because now she was providing her own refrigerator. I specifically remember talking to this tenant before she signed the rental agreement, and telling her myself that the fridge was not included as part of the rental. She claimed not to remember that conversation.
I then politely pointed her to the provision in the rental agreement that discussed that the fridge was not included in the rental, and the replacement of the fridge was her responsibility. Having it there in black and white resolved the situation immediately. She might have been a bit upset at first, but after re-reading the agreement she signed, she got over it.
Article originally published on nononsenselandlord.com