Over Sunday dinner I mentioned this interesting posting to my dining
companions, one of whom is a tax attorney. Her succinct input was "he
should talk to a lawyer." Then she pouted. I dunno why some lawyers
hate talking shop; I never miss an opportunity to describe a
particularly bloody or pus-filled surgery, sometimes clearing out the
tables within earshot.
What follows is the discussion boiled down. If free advice from
medical, political, musical, and defense experts is what you are
looking for, here it is. Be forewarned-- you get what you pay for.
In our opinion (please familiarize yourself with the Google disclaimer
below) the tenant should not be "unjustly enriched" by the
displacement. Local laws may weigh in on the matter but most (if not
all) laws do not allow for unjust enrichment.
Let us examine some hypotheticals. Assume the tenants are out for
exactly one month. Further assume their entire expenditure for food
and lodging for the month at a hotel is $1900. There is no reason for
you to pay anything (except to be nice) because the tenant spent less
during the month (s)he was displaced than they would have living in
the leased house.
Next, assume the tenant pays $3100 for food and lodging for the month
away. If the normal food bill for the tenant is, say, $900, the tenant
still has spent less than they would at the leased house.
Finally, assume the tenant racks up $5500 in bills for the month away.
If the normal food bill is $900 and there are no other extraordinary
expenses, you might be on the hook for $2100.
Maybe.
Both parties would have to work to mitigate damages. The tenant would
have to look for lodging at a suite hotel (or weekly rental, or
similar place) and be reasonable about avoiding the most expensive
restaurants. The landlord would be expected not to require the tenant
to stay at a $8-per-night Bowery flophouse and would have to ensure
the work is performed properly and in a timely manner.
Recoverable extraordinary expenses, if allowed, would likely include
lodging, food, commuting, moving, utilities, etc. Loss of property
should be compensated at depreciated value, not how much a new one
will cost.
The utilities-- basic monthly fees plus use during renovation-- in the
house ought to be paid by the landlord, including any utilities that
were unusable (cable, phone, DSL, alarm, maybe even ISP). And if a lot
of water was lost from the break, I wouldn't push the tenant to pay
the whole water bill.
I think if you carefully consider the above you can come to an
equitable solution for both parties and avoid a lot of acrimony. You
should also consult with an attorney to examine a few things such as:
what the lease says about the matter; what the tenant's insurance and
your insurance responsibility may be; did the tenant perform his/her
duties properly regarding the broken pipe; what local laws say on the
matter; what constitutes extraordinary expenses; how to get a release
from the tenant after the matter is settled; and about a zillion other
little things. The consult is well worth the small fee (sometimes
free!) you'll pay.
The insurance issue is interesting. If the tenant has a policy where
they declined rental coverage, they have enjoyed a lower premium and
assumed an added risk. If I had declined rental-car reimbursement on
my car insurance, I would have to provide my own transport while my
car is being fixed. Wouldn't that mean they would be expected to foot
the bill themselves?
Some argument went the other way-- why should the tenant have to go
through the insurance company and risk higher rates if they could
demand the compansation from you. Insurance isn't a requirement, it is
a safety net for reimbursing unusual expense. It can be ignored if
recovery is possible from the party causing the damage (ir their
insurance company) was an opinion.
So there you have it. Confused? The best advice was talk to a lawyer. |
