Imagine if you will, you are at a family gathering when your tenant reaches out to you saying that the refrigerator is not working and wants it repaired or replaced ASAP. You hang up the phone and pause for a minute. Your very practical wife tells you to go ahead and get it taken care of while she starts to Google appliance repair people. But then your uncle, who owns lots of property, jumps in to say that appliances are personal property, and he would have the tenant arrange and pay for it. Who should you listen to, your wife or your uncle?
Generally, you should probably listen to your wife over your uncle. Divorce is more expensive than a refrigerator. But this is about real estate, not marriage advice. I’ll explain.
Who Pays for Appliance Repairs, the Landlord or the Tenant?
Like most things in life, it depends. We will go through multiple situations explaining who is responsible and give some examples of how it can go either way depending on your approach and the ever-important lease agreement. We will give the pros and cons of a couple of different approaches and rental property strategies people use. We will start with the easiest first.
Who pays for repairs, when the tenant owns the appliance? If the appliances are the property of the tenant, then the repairs and potential replacement are the tenant’s responsibility. This is the easiest.
- Who pays for repairs, when the tenant breaks the appliance? If the tenant breaks the appliance, then it is the financial responsibility of the tenant. This is why you need to be sure to document the condition of the appliances at the beginning of the lease just in case there are any disputes.
- Who pays for repairs, when appliances are built in? If the appliances are built-in, they are considered fixtures. When fixtures quit working from normal wear and tear then repairs or replacement is the responsibility of the rental property owner. Something that is connected in a way where it cannot just be unplugged and removed is considered a fixture and goes with the property. Just like in a sale, fixtures are part of the real property and rental property owner’s responsibility.
- Who pays for repairs, when appliances are owned by the landlords but are not built in? In most cases, if appliances were included in the lease, it is the rental property owner’s responsibility to repair and replace them when needed. When the tenant moves out the appliances stay as they are the property of the owner. There is an alternative to this that some landlords use but there are a lot of variables that need to be taken into consideration.
Although not required, more and more rental property owners are making the business decision to provide basic appliances like stoves and refrigerators. Unless otherwise agreed, when these appliances wear out or need replacing the landlord covers the cost. This way, when the tenant moves out the appliances are available for the next tenant. This helps make the property more attractive to tenants and easier to lease at a better rate. Check out our article on What Appliances Should be Included with a Rental Property to get a little more background on the subject.
If you still choose to make the business decision to avoid making appliance repairs, you can do so in certain instances. But it is only for certain appliances, and you have to have it spelled out in your lease agreement ahead of time.
What if You Want the Tenants To Pay for Appliance Repairs?
Some rental property owners push the expense of appliance repairs to the tenant. This is a little more “old school” and has some downsides that you will need to consider. If you do, you must be careful to have things spelled out in your rental agreement and the appliances need to be personal property and not fixtures.
The California Association of Realtors lease agreement has a section that reads:
“The following items of personal property are included in the Premises without warranty and Housing Provider will not maintain, repair or replace them:” After that, there is a place where you can list the appliances.
Unfortunately, the CAR lease agreement does not have any language stating who pays for the removal of non-operable appliances or if there is any duty to inform the landlord if an appliance is removed. If you have the tenant pay for appliance repairs, we recommend that you clarify those two points. Your tenant should also be aware that if they pay for a repair, they will be paying to repair your personal property.
Remember, if the tenant replaces the appliance, then the new appliance would be the property of the tenant. When the tenant leaves, you may find yourself appliance shopping for the next tenant. Of course, every old-school landlord will talk about the time they got a deal buying used appliances from a tenant moving out.
Personally, it feels cleaner for the rental property owner to include, repair, and replace basic appliances and this is what we see most landlords do. We just want to let you know your options and what to look out for.
Pro Tip for Refrigerators
If you are going to rent a property and include a refrigerator you should include some language in your lease that makes clear you will include, repair, and replace a refrigerator that brakes at no fault of the tenant but will not replace or compensate for any food lost due to the refrigerator’s failure. Seems like every broken refrigerator is somehow full of steak and lobster. If a tenant loses their wagyu beef and caviar they may want to claim with their renter’s insurance. Get the appliance fixed as quickly as you can, then you will not need to pay for the lost food.
Bottom Line
It is usually clear who pays for appliance repairs. If it is the tenant’s property or if the tenant broke the appliance, then they pay for the repair or replacement. If the appliance is built in and it’s not functioning, and it is not the fault of the tenant, then it is the property owner’s responsibility. If the appliances are included with the rent then it is the landlord’s responsibility to repair or replace them unless the appliances qualify as personal property and are specifically held out in the lease agreement as “included in the Premises without warranty and Housing Provider will not maintain, repair or replace them.” This approach can work in some cases but has downsides too which should be discussed with your property manager.
We hope that you found this helpful and informative. Remember, we are not attorneys or CPAs, so we don’t give legal or tax advice. Laws are always changing and vary depending on the specific municipality in which the property is located. For legal advice please consult a real estate attorney familiar with the laws in your area.
For Real Estate Advice
If you are looking for a reliable property management company or real estate broker in Long Beach, Los Angeles, or Orange County, California; or you are just considering it and have a few questions about real estate contact the Mike Dunfee Group today! We are happy to help.
