Can I require tenants to pay for a home warranty? Should I?

[George Nyquist]

I work for a small real estate management and development company in San Francisco, CA. We only manage our own portfolio. We are also always building several projects to add to our portfolio using our own long-term skilled workers. However, anytime a tenant has a problem in their building, I have to pull my skilled builders to respond to a service request which throws off the development arm's productivity. My question for you all is, can I have a tenant pay for a home warranty as condition of their lease? Does anyone know if it violates the rent ordinance in some way?

Any feedback or ideas would be greatly appreciated.

[Kim Meredith Hampton]

@George Nyquist Maintenance is part of investing in real estate. I find that home warranties can be the most difficult, cumbersome and unqualified people to deal with regarding your asset. Here is a copy of a blog I wrote on Home Warranties:

First, as a Property Manager for over 20 years I have found that Home Warranties to be an absolute nightmare when it comes to tenants, owners and warranty companies.

I find that most of the time they magically don't cover the item that you are calling about, and you end up paying a service call fee, calling another vendor and then paying for and repairing it anyway.

They also take forever to get someone out to take care of anything. I think that most of the time they make people frustrated and you end up losing money in the end.

Typically the vendors they send out undercut each other to get the work, but then end up making no $, so your job falls to the bottom of the list!

Waiting for them to replace or warranty is a real issue with tenants in the property. The tenant, the property manager or owner must pay for the service fee immediately, and then we play the hurry up and wait game!

If you do purchase, it's important to make sure that you know your policy inside and out, what does it and does not include.

Regarding have the tenant pay; I have seen owners require tenants pay the "service fee", but not for the warranty itself or if they caused damage, that is your property, your cost