Should a tenant be compensated for urgent repairs?
Dealing with repairs is a regular part of owning an investment property. But the issue of urgent repairs is an area that is often misunderstood by both owners and tenants, potentially leading to messy disputes. One of the most common disputes involves whether or not a tenant can receive compensation for urgent repairs performed without the owner’s knowledge.
Urgent repairs tend to be more expensive than regular repairs due to the after-hours call-out rates charged by most tradespeople and the lack of time to shop around for the best quote. The main problem with urgent repairs arises from the fact that people have different definitions of what is “urgent” and so conflicts can easily arise and even end up in court.
Certain circumstances are clearly more urgent than others, like a leaking sewerage system or major electricity concern that could cause serious injury. Generally, if the problem is likely to cause major injury, property damage or real inconvenience to the tenant then an urgent repair is warranted.
But other situations are not so clear cut. For example, does a broken hot water system require an urgent repair? Some may think so, others may not. Let’s say it is a chilly winter’s evening and a tenant arrives home cold and damp after getting caught in the rain. Looking forward to a nice hot shower the tenant discovers that the hot water system isn’t working and so decides to call for an after-hours repair and subsequently pays the bill. The tenant, who didn’t cause the problem, believes the owner should reimburse the expense, but the owner isn’t happy about paying the inflated cost of the after-hour repair when it could have easily been performed more cheaply the following day.
What the tenant should have done in this situation is call the managing agent to seek clarification about the matter of compensation before ordering the repair. However, it might not always be possible to reach the managing agent, so it’s easy to see how conflicts can arise.
Another reason disputes arise is that there may be differences between what it says in a particular Tenancy Agreement compared to the Residential Tenancies Act 1987. A tenant who is seeking compensation for an urgent repair may turn to the Act which does in fact state that the owner must compensate the tenant for reasonable expenses under certain urgent circumstances.
However, this part of the Act is often legally modified in many tenancy agreements, including the standard one prepared by REIWA, so that tenants must first receive permission by the owner or managing agent before any repair can be ordered.
It’s easy to see that if urgent repairs are not dealt with in a proper fashion, the relationship between tenant and owner can become severely strained. This is where using a professional property manager will help avoid these situations arising by ensuring all parties understand their responsibilities at the beginning of the tenancy, and also by having good relationships with various tradespeople. And if disputes do occur, a property manager is in a better position to liaise with both the tenant and owner and try and mediate a suitable outcome.
It’s worth noting that the Residential Tenancies Act in WA and supporting regulations are to be changed in late 2012 or early 2013 to give clarity to what is an urgent repair and what isn’t. Momentum Wealth will be updating our Property Management clients at that time with the changes.