General Landlording & Rental Properties
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated over 10 years ago, 05/19/2014
Tenant Paying for Energy Audit
I tried searching the forums for this topic and could not find one, so apologies if this has been asked before and I did not see it....
I have a tenant who wants to pay for an energy audit (Includes installation of CFL lights, water heater blanket wrap, low flow showerheads, improved weather stripping, etc.) In additon, they are doing a blower door test to see where the main areas of heat/cool leaks are in the house. I have no issue with this being done and appreciate my tenant wanting to do this and pay for it themself. The audit results are only sent to the tenant (Since tenant pays utilities) My question is this: After the audit, can the tenant hold that audit results against me to leverage new window installation, or somethiing major? By the way, windows are in good shape. Has anyone dealt with something like this before? I have added insulation in the attic, replaced and repaired storm window's, storm doors, etc., but as all homes have to breathe a little (They have to or it would be dangerous to live there) wondering what limits there are. The home is in great shape and never had an issue with drafts, leaks, and have it will maintained. Any thoughts, advice or experience on this is appreciated!
i would think they can ask you to change the windows or make changes but ultimately it is your house so you can do as much or as little as you want. i don't think there are any rules about how efficient the house has to be . i personally would not worry too much about it because i wouldn't be willing to change anything to save them money on their utilities.
Short Answer: No. Unless there is something going on in WI that I'm unaware of.
Long Answer:
Still no, but the information in those audits is pretty cool. I have a property that I just had weatherized. I saved about 21% this past winter on heating the place. The audit plus weatherization should pay for itself in about 4 years.
The tenant can't hold the results over your head using anything except guilt. If this is a great tenant, spending a few hundred bucks to shore up a leak or three, there will be a few, is probably a good idea.
As a landlord the tenants are welcome to ask anything they want but I wouldn't allow it unless it infringed on "quiet" enjoyment or state laws! I also wouldn't allow an audit on my house unles I got a copy!
i am in a similar situation where my tenants in an adult community and everything is electric and realized a $300 bill may be a regular occurrence. They are talking about getting an audit as they have concerns. I told them feel free to get an audit and let me know what is said. I know the windows are old the hot water heater is towards the end of its life. Now if there are easy fixes i will address them. If there are other larger issues like windows well i am not going o nor can i afford to buy all new windows. I will consider changing the hot water heater as it is a cheap way to perhaps keep the tenants happy and it something i need to do in the next year any way and it buys me lots of good will and perhaps keeps them quiet for a long time about small issues. As they are new tenants and hopefully will be there for the long haul.
Great feedback and thanks! Actually, the house is in MN, and I live in WI so not just "Down the streed." to check out either. Like you Gil, I dont mind good, quick fixes or fixes that are realtively inexpensive but I do not plan on replacing all the windows, etc. Again, thank you all for your feedback!!
One thing to consider is offering $50 or so off rent in exchange for a copy of the report so you know the results first hand and potentially can use the results for future marketing.
I would definitely allow the energy audit if I could have the results as well. I would be clear that I would take the results into consideration for my long term updates plan. I would not do things that would be cost prohibative and not make financial sense for both parties.
With that said I am shocked by some of the other replies here. Not wanting to update windows? I could care less as they pay for utilities? I am updating the windows on one of my duplexes this year, should be about $5,500 for about 22 double pane windows with low-e and argon. Why wouldn't I want to do this? It increases the value of my property. It makes my property more desirable, easier to rent for a higher amount and helps retain tenants longer. it protects my investment by better protecting it from the elements. It lowers use of the HVAC system and lowers long term costs on utilities as well. Lastly, it is just a win win. Put in new energy efficient products that improve the functionality amd comfort or the property as well as saving the tenant money on utilities and raise the rent just less than their cost savings. They still come out ahead moneywise and you have a greatful tenant and all the benefits mentioned earlier....
We want our properties to be energy efficient. I would welcome an energy audit and would ask for a copy of the results. Over the years we have made upgrades as we could afford it. If the findings show a significant deficiency, I would address it head on. It doesn't pay to hold one's head in the sand.
@Kyle Hipp made some great points. For us, providing good service to our tenants and doing the best we can for for the environment is good for business. We build the costs into our pricing. In marketing our properties, I point out the features that are energy efficient and it helps us attract better customers. Think about ROI (return on investment).
Our local electric utility company offers incentives for energy conservation from time to time. Sometimes a low income tenant can qualify for some free or low priced weatherizing improvements, including some big ticket items like insulation and repairs. The improvements aid the current tenant and stay with my building.
Many communities have energy conservation programs. Over the years I have ordered many free "energy savings kits" and free "weatherization kits" from our local utility companies or have picked them up at home & garden shows. The kits include compact fluorescent light bulbs of various wattages, LED night lights, smart power strip, whistle that attaches to your HVAC air filter and alerts you when it's time to change the filter, low flow shower heads, dryer vent cleaning brush, water temperature thermometer, refrigerator thermometer, weatherstripping, caulking, foam pipe insulators, window film, rain gauges, etc. Google "energy conservation kits" and click on images to have a look at what is out there!
Contact your local utility companies (electric and natural gas and water) and ask what energy conservation programs are available in your area. Ours offered a free energy audit. Multiply that by my 15 residential rental units and that added up to super savings and gave me reliable information to go on.
@Douglass Belt A tenant can't hold the findings against you unless they indicate something that makes your property uninhabitable. But they can make for good negotiating points. And negotiation is two-way.... the property rents "as is" or we can make improvements and make a rent adjustment. :-)
Originally posted by @Aaron Montague:
Short Answer: No. Unless there is something going on in WI that I'm unaware of.
Long Answer:
Still no, but the information in those audits is pretty cool. I have a property that I just had weatherized. I saved about 21% this past winter on heating the place. The audit plus weatherization should pay for itself in about 4 years.
The tenant can't hold the results over your head using anything except guilt. If this is a great tenant, spending a few hundred bucks to shore up a leak or three, there will be a few, is probably a good idea.
so i am confused... sounds like a "maybe" to me. :)
I think all the tenant could do is try to use the results of an audit as a lease leveraging tool -- such as if you tried to increase rent at the end of term without making any changes. However, I could also see it working both ways -- you up the rent at time of re-signing in order to accommodate said suggested improvements, and tenant couldn't argue they don't need to be done.