Rent credit for no water?

Question

One of my houses was hit hard by the Texas freeze, with the main water pipe broken in several places.  I finally got my spot in a plumber's long work list and they replaced over 80' of pipe.

The house was without any water for 5 days (and that was a single potable source outside), and without hot water for almost 2 weeks.  My insurance company said they will cover lost rent due to the emergency.  I don't have any specific text in the lease about crediting or reducing rent payments under these circumstances.

In Sec. 92.008.  INTERRUPTION OF UTILITIES. "...unless the interruption results from bona fide repairs, construction, or an emergency."  It seems like there is no state law basis for rent credit for no utilities and that I satisfied my duties as landlord.

I can't be the only landlord in this situation in Texas right now.  Several college students have been relocated to different apartments because of similar issues.  I didn't have another house to move these tenants.

Kevin Patrick · Answer

Thank you, Jerel.  At the time I posted this, the rent credit question was just part of a conversation with the insurance agent.  I had not experienced it, either as a renter or landlord, and did not know that it was a normal course of business in these situations.  I knew that loss of rent payments was covered under my policy, but this situation is not detailed in my lease and wondered if it was provided for by law.  I still do not know if it is law or not, but did receive notice from the claims agent that I will be receiving funds and I will pass those on to my tenants.  I had no intention of pocketing the money.

Jerel Ehlert · Answer

You can't claim "loss of rent" on insurance AND charge tenant full rent.  That's insurance fraud.  Assume someone will blab to the tenant or the carrier.

You already have a claim on insurance, figure out what insurance will pay out for lost rent and give that as credit to the tenants.  In this case it LITERALLY costs you nothing to not be a dick.

Bryan Devitt · Answer

Considering that they stayed there, I would probably only compensate 10% of rent but also, if insurance is paying for it ...

Kevin Patrick · Answer

OK.  I just found the discussion forum post addressing what I was looking for.  https://www.biggerpockets.com/... I didn't scroll down the forum far enough in time and my search terms weren't accurate the first time around.

Relevant quote: "If the damage renders the property partially unusable, the tenant is entitled to a reduction of rent in an amount proportionate to the extent the property is unusable. The tenant and landlord can negotiate a reduction in rent, but if the landlord will not cooperate or the parties can’t agree, the tenant may seek a judgment from a county or district court."

The tenant continued to stay there, but no hot water for two weeks is pretty unusable.

Kevin Patrick · Answer

Thank you, Bryan.  Tenant lived there the whole time.  I did secure a place for them to shower and do laundry while the water was out.

Insurance is covering the plumbing repair and insulation.  Pipes are under the pier and beam house, and no structural damage occurred.

Bryan Devitt · Answer

Did the tenant live there the whole time? Are they asking for any? Is your insurance covering anything else besides the loss of rent?

Kevin Patrick · Answer

Ha!  I wrote, edited, and deleted the clarity of my question!   Thank you, Rob.

Does Texas law or precedent require that I credit the tenants for these days without water in the house?  Or would it need to be stated clearly in the lease agreement?

Rob Lee · Answer

Are you just sharing or do you have a question?