Q: I rent an apartment and my refrigerator recently stopped working. I called my landlord who came by and confirmed that it doesn’t work. The landlord told us that now we have to pay for the new one because it’s our fault.
The landlord bought the refrigerator in 2003 and it has a warranty of only five years. We have been living in her apartment for five years, but she bought the refrigerator seven years ago. Who pays for the new refrigerator? She wants us to pay for the new one or else move out of her apartment.
A: I think there are several comments I can offer. Typically the landlord is responsible for repairing or replacing the refrigerator if the appliance was included in the amenities when you rented the apartment. The situation you describe raises a lot of questions.
First, I wonder about the ability of the landlord to determine that the refrigerator cannot be fixed and must be replaced. Unless the landlord is an experienced appliance repairperson, I would question how she knows the refrigerator must be replaced.
I also wonder why your landlord believes that the sudden failure of the refrigerator is your fault. It is possible but would be unusual for a refrigerator to stop working from use by a tenant unless there is some obvious abuse.
While it is possible that the cost of the repair could exceed the investment in a new refrigerator, it is also possible that the repair would be less and the landlord is attempting to make you the scapegoat.
I would suggest you ask the landlord to have a qualified appliance repairperson diagnose the issue with the refrigerator and make an independent determination as to the cause of the sudden failure. Clearly, you need answers from unbiased professionals so that the right outcome is reached.
If the refrigerator failed through something you did during your tenancy and it is not economically feasible to repair it, then the landlord’s proposal is appropriate. Personally, I think that is highly unlikely.
While the issue about the warranty expiring fairly soon before the product fails is frustrating, this is certainly nothing that most of us haven’t experienced and probably the reason that the manufacturer offers only a five-year warranty. So it would be my opinion that the expired warranty is a moot issue.
There is nothing that requires the landlord to have a warranty of any certain time frame, or even any warranty at all.
You have likely suffered some hardship without a refrigerator while this issue has been pending, so the one potential benefit in all of this is the new refrigerator is likely to be more energy-efficient, which would be helpful for you if you pay for your own electricity.
Until a professional appliance repairperson determines the cause of the failure, you should expect that the landlord is responsible for providing you with a working refrigerator.
Q: I recently hired a manager for my 40-unit apartment building because I am away most of the time. The on-site manager duties include showing vacant units, accepting applications from prospective tenants, screening applicants, handling move-ins and rent collection, coordinating maintenance, inspecting, and basic pick-up of the grounds.
I think that the position should take about four hours per day, and I don’t require any work on weekends. What is a fair salary and (level of benefits) for this type of position? I do pay their workers’ compensation insurance premiums.
A: I don’t think I can tell you what the appropriate compensation for your on-site manager is because it is often a function of what the going compensation levels are for such services in your local area. I would suggest you ask this question of owners of similar buildings in your area, as well as professional property managers.
Compensation is usually in the form of cash or a rent credit, or a combination of both. Certainly your on-site manager must be paid at least the federal minimum wage (or the state minimum if it is higher). But you need to make sure that you know all of the rules about how the minimum wage is calculated.
For example, in California if you give your manager a "rent credit." There is a limit on how much of that rent credit can be used towards meeting the minimum wage. The amount varies for single individuals vs. a management couple but is generally no more than two-thirds of the rent credit, with maximum dollar amounts that can be applied toward ensuring that the total compensation meets or exceeds the minimum wage.
I would also strongly suggest that you have a written agreement with the on-site manager and require him to complete a daily time sheet and submit it to you each week. Many landlords have been sued for claims concerning hour and wage violations and it is extremely important to have all of your employees follow strict payroll procedure guidelines just like they would in a corporate office setting.
I am glad to hear that you are paying workers’ compensation insurance for your on-site manager, as some owners think they can avoid this cost of doing business, but you need to consult with your accountant or tax adviser to make sure that all required employee and employer payroll taxes are collected and paid in a timely manner.
This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of "Property Management for Dummies" and "Property Management Kit for Dummies" and co-author of "Real Estate Investing for Dummies."
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