Furnace caught fire...now what?

Question

One of my SFH renters called me this morning to let me know they had called the fire department because they noticed smoke coming from a vent.  Turns out the furnace had caught fire...fortunately no fire damage outside of the furnace closet.  Nobody got hurt and property damage appears to be minimal.  So...I need a new furnace and some sheetrock work.

My question is how to handle the renters now.  Our weather is very mild right now but I assume it will take several days to get a new furnace installed (waiting to hear back from contractors now).  Do I need to put them in a hotel or get a portable a/c unit?  Highest temperature in the next 10 days is 85°.

Any advice appreciated!!

Account Closed · Answer

So true.  I carry renter's insurance and have a couple of extra riders and it's still only $25/month.  I always get the loss of use rider, so I can go to a hotel if I'm kicked out of my apartment because of damage.

Thomas S. · Answer

Talk to your tenants, get a feel for their situation. If they are OK staying offer them nothing. Give them a couple of space heaters. After it's all cleared up send them a gift certificate for a nice restaurant and thank them for their understanding a patience.

If it was in the winter I would put them in a hotel or provide space heaters and give a rent rebate.

Account Closed · Answer

Putting them up  in a hotel is not necessary and would be too expensive.  As mentioned, that's what renter's insurance is for.

But, if it was me, I'd give them a choice of a rent reduction for each day until the unit is fixed, or for you to get them a portable A/C unit, or put in a window unit temporarily (and they can choose which room it goes in), that they can use until the work's done.

Then, keep the A/C unit for future emergencies.

We had a couple spare window A/C units for these situations.

Legally, you could just tell them that's what renter's insurance is for.  But, giving them the other options just makes life easier.  But, I wouldn't okay a hotel stay for this.

I okay'd a hotel stay for just one night once for a law school tenant who had her bathroom flood (not her fault), and she had a very important job interview the next morning.  It was evening and when I asked if she had renter's insurance, she just started  crying, poor thing!  I didn't have any vacant units to put her in, so I called the owner and he agreed to let her go to a hotel for the night.  What we did was okay'd her to spend $100, I think that we'd take off next month's rent.

You know the funny thing?  She chose to go stay at a friend's house and took the money off her rent anyway LOL!

Kevin Romines · Answer

A few of you guys mentioned renters insurance. I would make it a habit of requiring all renters to have this and list you as an additional insured. The 1st reason is that if they have no renters insurance and they have a liability claim, they and you will get sued. Who has the coverage at that point, you the home owner. However if they have renters insurance, then their policy is 1st in line to cover the expense and legal defense. Your policy would then be considered secondary. This could save claims against your policy. The renters insurance policies in our area tend to run $8-20.00 a month depending on how much contents coverage they have? Very inexpensive insurance for the coverages that a person gets on those policies and it also gives them discounts on their other policies, such as their auto policies.  Just no good reason in the world to not have one. All apartments in the metro areas require them, you should too.

Kevin Romines · Answer

I would talk to your agent? If you have a loss of rents due to a covered loss (fire) your policy should have coverage on it to cover this? Keep in mind that a claim tends to stay on your record for 3-5 years depending on the company and can affect your rates on your policies. Weigh out if it is better to take care things yourself or potentially see an increase in your premiums for the next 3-5 years. If you were making a claim for the fire anyway, then you were already headed down that path, just make sure the insurance adjuster agrees that the home is temp. not inhabitable due to the lack of air conditioning so that you do get the loss of rents, and extra expenses.

Bryan O. · Answer

Hi @John Lindemann. This is one of those great demonstrations of why requiring renter's insurance is the way to go. I require it, and I also specify that if the house becomes uninhabitable that I do not pay for any alternate housing. Their renter's insurance should cover that, not me.

I agree with @Greg S. on this one. Just communicate with them and make sure that they have a couple of space heaters. The entire house is habitable so I would likely not provide any rent rebate, but certainly would decide a thank you after the fact (like the gift card) based on how well they handled the situation.

John Lindemann · Answer

@Rich Baer - thanks

Rich Baer · Answer

@John Lindemann

If the house is safe (no fumes or particles), talk with the tenants. Explain the time situation. See if they would prefer a rent reduction to hang in there while repairs are made or see if they prefer to be put up for a few days. A portable AC may also be an option. Also talk to your insurance company.

Rich Baer, Esq.

Furnace caught fire...now what?

Most Popular Reply