One significant consideration for investors are the appliances in rental homes. Offering, maintaining, and repairing appliances are all issues. Fortunately, appliances are generally not a part of any local habitability ordinances. If they choose, a rental owner can decide how to handle appliances for each lease.case by case. In doing so, the owner needs to be specific as to the expectations of their tenants. Rental owners may provide some appliances or no appliances. In order to avoid problems, leases should contain policies that address and define appliances. Otherwise, appliances can be a source of many landlord headaches.
The following will help a rental owner decide the best action plan toward dealing with appliances.
What Are Appliances?
Appliances in rental homes are not fixtures like a toilet or a water heater. Equipment that can be installed or removed are appliances. Appliances are used for performing common household chores. Some items, such as a garbage disposal or built-in dishwasher or microwave, are fixtures that also can be considered appliances. Equipment like a stove, refrigerator, or washer and dryer are most commonly called appliances.
Defining the appliances in each home is important in order to clearly have a policy as to how maintenance and repairs will be addressed.
Should A Rental Offer Appliances?
Offering appliances in rental homes is usually based on three factors.
- Marketability of the rental
- Potential damage if a tenant installs their own appliances.
- Fear of theft
Tenants always want to know what appliances are included in a rental. Some rentals are shown without appliances and the owner will install them prior to occupancy to avoid theft. Do not leave your potential applicants guessing or assuming about what is included. Make certain it is clear to your interested applicants what, if any, appliances will be included. In general, offering appliances makes a home much more marketable. Most tenants are not renting a storage space filled with appliances nor do they wish to have to purchase specific appliances that may work only in your rental.
If an owner decides to not offer appliances in rental homes, the tenant will usually need to supply and install their own. It is difficult for the average person to move many appliances and unless they are trained to do so, there is a risk of damage to the rental property. When an owner decides not to provide a refrigerator, they are agreeing to accept the risk associated with installation by a tenant. In the end, there may not be enough funds in a security deposit to cover the banged up walls along with any other issues.
Many owners believe their tenants will just walk off with the appliances. While this is a risk, it rarely seems to occur. When it does, file a police report and include the cost of the appliances in a security deposit settlement statement. Go to court and get a judgement against your former tenants to receive funds and successfully be on record. This will make it more likely that the former tenants will be stopped from renting or acquiring housing again.
What Appliances Should An Owner Offer?
There is no law requiring landlords to provide appliances in rental homes, and most states don’t consider an absence of appliances to violate the habitability requirements that landlords must meet. A rental property must have working electrical, heat and plumbing systems, but doesn’t necessarily have to contain any appliances hooked up to those systems.
The issue for the rental property owner is to be competitive. It is well advised to provide appliances with your rental. It is not common that a renter owns appliances and many do not want to own them. In practice, there seem to be certain appliances that are expected and some that are more commonly not. The factor seems to swing on if other options are available for a tenant. For instance, there are laundromats for washing clothes so possibly a washer and dryer are not necessary but optional. A stove or refrigerator are necessary and required for modern living so when a decision is made to not provide them, a rental owner is forcing a tenant to acquire these appliances. This requirement will likely put the rental owner at a competitive disadvantage when leasing a property.
Managing Appliances In A Rental
As an owner acquires appliances, they should keep records as to what is contained in each rental. An inventory list is easiest created and maintained on an excel spreadsheet but a pad of paper will work also. This inventory will include, by property, appliances model and serial number, date purchased, any maintenance and who performed it, where the instruction books are kept, and a picture of the appliance.
At tenant move-in take pictures with a date stamp to show all the appliances in rental homes. These images will document the condition of the appliance at move-in if a former tenant is taken to court for damages.
The challenge with appliances in rental homes is what happens when they are not working correctly. The tenant reports a dryer not drying, or an oven not cooking. Even worse, the refrigerator that is not running. Without a clear policy, outlined and agreed to in the lease agreement, these issues will create friction between the rental owner and tenant.
Most states do not address appliances as an issue of habitability (with the exception of those that provide cooling or heating).. Therefore, the guidance is whatever the lease says or does not say. If left unaddressed, the tenant may assume a broken appliance will be repaired. A rental owner may want a tenant to have some personal responsibility in taking care of an appliance. One of the more common issues is a garbage disposal that become clogged. It should be the tenant’s responsibility to unclog a garbage disposal. If not addressed in the lease, the tenant may expect the owner to fix the disposal when in all probability it was the tenant’s actions that caused the need for repair.
As in most human relationships, the key is communication. Tenants should have a clear understanding of what appliances are included and how repairs will be handled. Also, if a tenant is providing their own appliances, they should be clear about their responsibility for any damages caused by installation or use of the appliance.
In the case of rental owner provided appliances, determining what the landlord will or will not do if the appliance stops working needs to be addressed in the lease. Even an owner that plans to replace and handle all repairs to any appliance that stops working properly should still protect themselves. The goal is that tenants take some degree of personal responsibility for the provided appliances.
Appliance Lease Language
It does not make sense that a rental owner should be responsible for minor service calls because a dishwasher is not draining correctly due to broken glass. Or a dryer is not drying clothes because of built up lint. If a rental owner provides appliances, there are certain maintenance expectations of the tenant. Tenants should treat an appliance like their own. This means understanding and following basic maintenance procedures prior to paying for professional service.
Using lease language specific to appliances can provide a specific understanding between the rental owner and the tenant. The lease should identify all appliances and also non-fixture items in the home such as ceiling fans and garage door openers. Include a statement that the tenant will assume care for minor repairs and maintenance up to a certain dollar limit. Over that limit the owner can decide whether to pay the additional amount for the repair. The owner can also consider the replace, or not replace, alternatives.
This language forces different tenant behavior by making them responsible for the first dollar spent on a service call. This results in tenants trying on their own to solve a problem like a clogged garbage disposal or a dirty dryer lint filter. It also specifically tells the tenant that the owner is not under any obligation to replace any of the listed items. Using this language also keeps the tenant more involved in maintaining the appliances. This should result in a longer useful life for the appliances in rental homes.
Appliances will be an issue at some point for a rental owner. When the tenant has nothing invested in maintenance of the appliances it seems likely they will be cared for more carelessly. Finding a method to make the tenant a partner in maintaining appliances that make daily living more enjoyable is a goal all owner’s should share. Otherwise, appliances may end up a source of unneeded friction and dissatisfaction. Avoid this problem by addressing appliances in the lease with a clear understanding of the terms with the tenants. You just might find twin benefits: longer appliance lives and higher occupancy rates.