Sacramento Property Management

Sacramento Property Management Blog

Deferred Maintenance Costs

Alexandra Goldthwaite - Thursday, October 1, 2015
Property Management Blog

We all know that there are costs associated with owning any type of asset whether it’s a microwave, a car, or a home.   These costs are typically routine maintenance, but sometimes can turn into full replacement. If your car needs a tune up,  tires are bald, the windshield is cracked,  or your brakes are bare… the car is not being maintained, you have chosen to have the maintenance deferred to a later time, or possibly have decided it won’t be handled at all. Soon, the car will not be road worthy and may break down.  The same goes for a home. If you aren’t properly maintaining and ensuring that all of the working parts of the home are well cared for, the home may go into a dilapidated state. Your paying tenant may stop paying or move, or worse, they might get injured.  Typically, when using a management company, the owner is presented with the option to have annual inspections performed. These annual inspections are very effective in alerting the owner and the management company to any potential health or safety hazards, or to any habitability issues that have arisen in the past year. Deferring maintenance or not performing annual inspections on your rental is much like deferring maintenance on a car, it will lead to larger, more costly issues in the future.

  Some of the more important items/areas that need to be checked annually are: LPM Homepointe Sept 2015 Cover print_001
  1. Condition Of The Roof and Windows/Doors:
During the winter, rainwater can infiltrate the property and cause water and moisture damage, potentially leading to many other problems including drywall repairs, mold remediation, and much more! This is why it is important to monitor the condition of the roof, windows, and doors. The slightest gap could cause the dreaded water intrusion that could end up costing THOUSANDS of dollars, and isn’t always covered by home owner’s insurance. I have seen owners that had water intrusion that wasn’t covered by insurance and had declined the inspections our property management company had offered to them, and were financially burdened by having to foot the bill for repairs out of pocket. Although this is one of the more costly items to repair or replace due to the sheer size of the roof and amount of windows and doors, the cost of properly maintaining these items is minimal compared to the cost of fully replacing them and any surrounding affected or damaged areas.
  1. Smoke and Carbon Monoxide Detectors:
This is a very important item to make sure they are properly functioning. For example, providing extra batteries to the tenant or sending reminder notices every 12 months could help ensure that your tenant always has the detectors functioning properly. Making sure your detectors are up to the current code requirements and making sure that they are placed properly is also imperative. These pretty inexpensive detectors could alert the resident of a fire or carbon monoxide threat in the home and could ensure that they either extinguish the fire or call the fire department in a timely manner to ensure minimal damage to the property, not to mention that it minimizes the potential that a tenant could be injured. I had a client whose condo’s carbon monoxide detectors were constantly going off and we couldn’t figure out why. The gas company came out and found no source of a gas leak.  W soon  realized that there was another neighboring unit whose detectors were also going off and found that there was a leak in a common utility room in the building. The working detectors in both units potentially saved the lives of the tenants and of the neighboring tenants as well.
  1. Electrical/Plumbing:
This is a more commonly occurring maintenance issue that, when deferred, can cause some very costly, more substantial repairs. When there is a plumbing leak, the worst thing you can do is ignore it or wait too long to fix it. The water that is leaking, depending on what it is coming from and going into, can cause thousands of dollars in potentially harmful damage to drywall, flooring, and surrounding areas. If not cleaned up, as discussed in section 1, the water intrusion can cause you to have to complete mold remediation which is extremely expensive, not to mention having to potentially cover the cost of damage to a tenant’s personal property. Regarding electrical issues, this can be a huge safety hazard and when uninformed tenants use unsafe electrical systems, their life and safety can be jeopardized. The last thing a landlord wants is to have a tenant harmed in a property due to deferred maintenance, especially if the tenant has reported the problem, because it would be pretty likely that a lawsuit could ensue from that injury or harm. Unsafe electrical systems also pose a risk of fire and insurance companies are very hesitant to cover electrical fires when the unit has not been properly maintained and inspected.  
  1. Heating System Function:
Another aspect of habitability is the importance of a functioning heating system. Having the heating system checked at least once a year is vital. If the heater goes out, the tenants can complain that there is a breach in habitability and can ask for discounted rent. Providing space heaters is not even enough to make up for the loss of habitability, but most property management companies and clients choose to provide them to the tenants when heat goes out to show that they have the tenants’ best interest in mind and want to do whatever it takes to make the tenant more comfortable.   Putting a Band-Aid on a large problem may allow you to skate by for a few months and not have to worry about the problem or pay large costs to fully fix the problem at that time, but in a few months when that Band-Aid falls off, the problem recurs and this never ending cycle will continue until the proper solution is made. If maintenance has been deferred, you may find that you have been wasting your money on unforgiving repair efforts.