Reduced rent for flooded basement?

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Reduced rent for flooded basement?

Jacob CarlsonPro Member
Rental Property Investor · Omaha, NE · Member since 2017 · 43 posts · 13 votes

Question for the group:

Here is the scenario: I have a duplex that recently flooded in the basement from the Metro Utilities District Company (MUD) doing work in the area. 30+ homes in the area were affected with flooded/muddy basements. MUD is working with subcontractors to clean and replace basements that were damaged. Tenants are now asking for rent to be reduced for not having access to washer and dryer or ability to use the basement for a month... 

My Question: Do I need to offer reduced rent or anything while the situation is remedied? 

I want to basically say I appreciate you getting through this frustrating situation and I am sorry for the inconvenience but rent is still due. This was out of my control but is being handled by MUD. 


Thanks for reading the post and your answers!

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Richard F.
Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
3y
Aloha,

For starters, the tenant should make a claim through their Renter's Insurance for loss of use. You should also provide them with contact info for MUD if they have a specific contact for this event. Ultimately, yes, they should get compensated, but they need to follow through with the process. It is impossible to know what their damages are, until the issue is resolved and the basement restored to prior condition. It may be 10 days or 100 days...they need to pay as usual, and get their compensation once the actual loss is known.
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  • Richard F.
    Honolulu, HI · Member since 2008 · 3k+ posts · 2k+ votes
    3y
    Aloha,

    For starters, the tenant should make a claim through their Renter's Insurance for loss of use. You should also provide them with contact info for MUD if they have a specific contact for this event. Ultimately, yes, they should get compensated, but they need to follow through with the process. It is impossible to know what their damages are, until the issue is resolved and the basement restored to prior condition. It may be 10 days or 100 days...they need to pay as usual, and get their compensation once the actual loss is known.
    2Reply
  • Brett Deas
    CO · Member since 2022 · 590 posts · 428 votes
    3y

    I would reduce the rent and here is why:

    They are paying rent for what was advertised, for example that could be 1$ a sq. foot or something like that. If that value is reduced why would the tenant keep paying you accordingly? They were paying for X but now is getting less from you, so in turn you should get less from them. 

    They do not own the home, so sticking it out through these types for things is not an expectation. They can always move out and go rent a place that has the basement available. 

    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    3y
    Quote from @Jacob Carlson:

    I would not reduce rent because it is not your fault and is outside of your control. I would contact MUD and ask them for compensation. If they offer it, pass that on to your renter. You can also ask the Tenant to file a claim with their insurance provider.

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  • Jacob CarlsonPro Member
    OP
    Rental Property Investor · Omaha, NE · Member since 2017 · 43 posts · 13 votes
    3y

    Thank you all for the replies!

    Ultimately what has happened is I gave the tenants the contact info for the utility company MUD and they are getting compensated for their personal belongings being lost. They also are getting coverage from their own rental insurance. I told the tenants that rent is still due even though this was an unfortunate event it was out of our control and we did everything we could to get it taken care of ASAP. It took about 30 days from start of the even to the basements being back to working order. Tenants are getting compensated by MUD/renters insurance and tenants continued to make payments. So, thankfully in this situation I think good communication really helped smooth things over for everyone involved and everyone is coming out happy for the most part.

    I appreciate all responses as I thought about each of them and made the best decisions I could.

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