[Question] Water leak increases tenants bill

[Basment Dweller]

Hi all,

To all the landlords out there, what do you do if you discover a water leak only when you get the utility bill and the bill is 10x it's normal amount?

Do you impose that cost on the tenant? I haven't really checked my lease but is there normally a provision for this risk to be carried by the tenant in standard lease agreements?

BD

[HR Solutions]

Its not the tenants fault that there is a leak - the cost should be for the owner.

[sterne.law@gmail.com]

You may be covered through the municipal insurance

[Basment Dweller]

Leak is not the tenants fault but how does the landlord determine how much water was used by the leak and how much used by the tenant during that month?

The leak could've been going for 5 hours or 5 days, how do we know? See where I'm going with this?

@ Anthony 'Municipal Insurance?', I wasn't aware something like that existed, what is it, and how do I claim?

[Houses4Rent]

What is municipal insurance? Never heard of it.

Its not the owners fault either by default.

The big consumption could be many things.
reading error
estimate only
if leak is before the water meter its not billed and the councils baby (must still be fixed as water is precious water)
if its after the meter it will be billed for and ultimately owners baby
could also be a faulty water meter, which is council property
could be a running cistern
could be wrong pool operation
could be an mis-programmed irrigation system which waters overnight undetected (a flat battery could cause this)
etc.
look for wet patches.,

Bottomline:
establish first what the root cause is and then take the next step.

It also helps to read yoru lease.

[sterne.law@gmail.com]

Check your electricity rates bill
It should have a line item, water insurance.
They have a formula to calculate leak.
Average consumption etc

[Houses4Rent]

Take the average tenant's consumption in the past if you want to determine what the tenant used and allow for seaonality

[Houses4Rent]

Electricity bill? I thought we are talking water.

I have seen thousands of Cape Town council bills by now and never saw a line item of water insurance. Maybe its a Durban thing?

[Basment Dweller]

Good input thanks,

I think what I'll do is take an average for the last six months and offer to contribute something to offset the overrun. Tenant will have to fit the rest of the bill.

[AndyD]

I'm assuming the leak was outside or it would have been noticed so is the tenant bound by the lease agreement to maintain services external to the dwelling? This would be very unusual if they are. The external building fabric and services is normally maintained by the landlord or owner. I don't see how the tenant could be responsible for the leak or liable for the costs.

I know a couple of people who've had a similar problem in Cape Town and both sucessfully appealed to the municipality and got most of the bill waived, I think they had to produce a plumbers report to confirm it was an underground pipe that had leaked and it couldn't reasonably have been avoided. I know that one of them received a R28K water bill originally so if there isn't the 'municipal insurance' that Anthony mentioned and if the waiving of the bill is at their discretion or dependant on their mood on the day, maybe it's worth looking at getting private insurance to cover against this kind of eventuality.

[Basment Dweller]

I'm going to check with both the municipality and my insurance for cover, if not I'll have to cough up a couple grand. This is why owning property sucks, something always comes up that chews away your profits, after the bond is paid you make nothing.

[HR Solutions]

Leak is not the tenants fault but how does the landlord determine how much water was used by the leak and how much used by the tenant during that month?

In your first post you said it was ten time more ...... so you know.

when you get the utility bill and the bill is 10x it's normal amount?

[Houses4Rent]

I'm going to check with both the municipality and my insurance for cover, if not I'll have to cough up a couple grand. This is why owning property sucks, something always comes up that chews away your profits, after the bond is paid you make nothing.

Ah, you meant your building insurance might cover sudden accidental loss of water maybe. I am still keen to hear whether there is a specific municipal insurance as it was mentioned here?

Property investment is/should never be about short term profits, but long term asset building.

A landlord must always have a kitty for unforeseen expenses like vacancies, maintenance etc

[Basment Dweller]

100% correct, rental businesses need to have some floating cash, at least one months rent per unit because these things come up.

My insurance doesn't cover water loss and I've been trying to call the city of JHB for the past three days, they put you on hold for 15min then just cut you off.

[Dave A]

Ethekwini has a water loss insurance scheme going (which is probably what Anthony was referring too).
It would seem from the conversation that not all municipalities have this.