Wednesday, August 19, 2015

Appliance Guide for Landlords

Appliance Guide for Landlords

With every rental property, landlords must think about maintaining each part of the unit, from the walls and windows to the electrical and plumbing systems. One significant area that landlords deal with is the unit’s appliances. Because there is no single approach to appliances—from providing them in the first place to keeping an inventory or repair list on them—many landlords struggle with the ins and outs of appliances. This appliance guide for landlords can help streamline your efforts in approaching and dealing with appliances, from start to finish.

What Exactly Are Appliances?

Appliances are generally considered to be an individual piece of equipment for use in the home in the performance of domestic chores. By this definition, a dishwasher, refrigerator or stove would be considered appliances, but a water heater, garbage disposal or a toilet would not. In most rentals, the landlord often provides some or all of the following appliances:
  • Refrigerator
  • Stove/oven
  • Dishwasher
  • Clothes washer
  • Clothes dryer
  • Microwave
It’s not uncommon for landlords to list the appliances that come with the rental unit and what is not. In fact, a discussion about appliances is one of the top things applicants want to know about when inquiring about a rental property. Landlords who provide appliances can often charge a higher rent than they would if the property came with no appliances.

Must Landlords Provide Appliances?

There is no law requiring landlords to provide appliances in a rental unit, and most states don’t consider an absence of appliances to violate the habitability requirements that landlords must meet. In other words, a rental property must have working electrical, heat and plumbing systems, but there doesn’t necessarily have to be any appliances hooked up to those systems.
It’s rare for a rental property nowadays to not provide any appliances, because they are highly desirable for renters who most likely don’t own appliances of their own and are seeking rental properties that provide them. In order to stay competitive with the competition, many landlords specifically mention provided appliances when marketing their rental units.

Appliance Inventory Lists

When it comes to managing and monitoring a rental property’s appliances, you should take a certain approach to ensure that they are inventoried and well-maintained. Some landlords don’t find a need to document anything about the appliances, and simply have a “wait until it’s broken” attitude, but you will save time, money and stress if you develop a start-to-finish approach to your rental property’s appliances.
An appliance inventory list is a comprehensive document that tracks the purchase, repairs, inspections and more for each appliance in a rental property. There are many all-in-one forms available to keep this task from being time-consuming and it keeps all the relevant information in one convenient place. You can go online to find one or create your own.
Remember the more rental properties you have, the more appliance inventory forms you need to keep you from getting confused and stressed about what’s going on. An appliance inventory list generally has the following categories:
  • Property name/address/unit number
  • List of appliances
  • Dates of purchase
  • Any warranty information
  • Each appliance’s model number and serial number
  • Detailed description of each appliance
  • Repairs list
  • Inspection/maintenance list
  • Misc. notes about appliances
  • Photos of appliances (optional)
As part of your ongoing management duties, having a document for the appliances in each rental property can save you a lot of trouble down the road. Remember, this inventory form is in addition to the move-in inventory and current condition form for appliances that gets filled out as part of your walk-through inspection with your new tenant. That form, which should also include a detailed description of appearance and working condition and be signed by both of you, doesn’t need all the other info about serial numbers and so forth. Keep the master inventory document for yourself, and the walk-through form with the tenant’s paperwork.
It’s important to point out that a combination of written documents and photos are the best way to keep track of appliances for many reasons. Whenever you take a photo of an appliance, make sure it is time stamped with the move-in or inspection date. Those photos, combined with a signed checklist by you and your tenant are extremely hard to dispute in court if the tenant damages, breaks or steals them. If there is pre-existing damage like scratches or discoloration, make sure to get close-ups for your records.

Appliance Repairs:

 Who is Responsible?

Probably the hottest topic between landlords and tenants after late rent is appliance repairs. Because there is so much gray area on who is responsible, it opens the door to a lot of confusion, miscommunication and bad feelings. As a landlord, you’ll be much happier if you can head off conflict before it even starts by clear communication and a solid lease agreement.
The bottom line is that there are no across-the-board laws for who is responsible to repair a broken appliance. In other words, whatever a landlord includes about appliance repair responsibilities into the lease agreement will generally hold up in court. If the lease agreement says that the tenant is responsible for appliance repair starting from the first day of occupancy, then the court will uphold that. If the lease agreement states that the landlord is responsible, then that will also be upheld.
No matter which way the lease agreement handles repairs, it is critical that you and the applicant have a discussion about responsibility before the lease is signed. You may even want to include an appliance repair addendum that outlines the specifics of responsibility. It goes without saying that if the tenant is supplying their own appliances, they are completely responsible for repairs, plus any damage that their appliance might cause to the unit, like water damage from a leaking washer.

Lease Language for Appliance Repair

If you want to include language in the lease agreement or addendum that puts the responsibility of appliance repair onto the tenant, you can put in a clause that states that you have provided the appliances for the tenant’s use but they are not part of the rent. In other words, once the tenant takes occupancy, the use and any repairs as a result of that use, become theirs. Some landlords take a middle ground and differentiate between damage or breaking vs. normal wear and tear. For example, if a refrigerator needs repair due to tenant damage, he or she would be responsible for the repair. If the refrigerator just stops working due to age or normal wear and tear, the landlords handles it.
Also, many landlords include language that puts responsibility on the tenant if they fail to report a problem with the appliance, like a leaky dishwasher, and the delay causes more damage to the appliance or surrounding area. If the tenant does contract out for repairs, make sure your agreement states that you get a copy of the invoice for your records. Never assume that tenants understand your approach to appliance repairs without discussing it, simply because every landlord will handle it differently. If your tenant has come from a rental where the landlord did fix appliances whenever they broke, he or she would have no reason to think your lease would be any different unless it was pointed out to them.
Likewise, many landlords automatically assume that if they provide an appliance, they must repair it whenever and however it breaks, no matter what. If the tenant is supplying their own appliances, then you can have an addendum that states the tenant is responsible for any damage to the unit caused by that appliance. In summary, make sure you are clear with your expectations in writing, and take the time to have the conversation with the tenant about everyone’s repair responsibilities. As with everything, communication is key to avoiding conflict.

Timely Repairs

If an appliance does break down and you are the one responsible for repairs, the law steps in and ensures that the tenant doesn’t go without for too long. Most states give a deadline of a reasonable amount of time—usually anywhere from 14 to 30 days—to arrange for a repair. If you fail to get the repair done in that time, the tenant has the right to repair and deduct the cost from the next month’s rent.
For example, if the dishwasher broke and the tenant notified you, you have a reasonable time to hire a service person and/or replace the appliance. If the problem is not solved within that time, the tenant can arrange a repair and deduct that from the rent, along with a copy of the invoice as proof of the expense. It’s always a good idea to develop a list of services and contact people that you trust and can rely on to provide affordable, effective repairs on all your appliances.
Don’t wait until that refrigerator or that stove is broken, because then you will most likely be thumbing through the online directory just looking for a place that you hope will do a good job. Do the research ahead of time and find a company that has a good reputation, good references and affordable rates. Don’t forget to check if that broken appliance is still under warranty, because the approach to repairs will differ slightly.

Keep Appliances Under Control

Appliances can be amazing amenities for your rental property that can put it above the competition when it comes to attracting quality tenants. However, without some kind of organized approach to tracking purchase, maintenance and condition, managing the appliances within your rental properties can create way too much stress and work for you. To protect you, your tenant and your wallet, develop an appliance inventory system that works for you.
Do you have an appliance inventory system? What are some tips you’d like to share on how you make it work?

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