Who is responsible for excessive utility costs when an equipment failure occurs?

The external A/C compressor contact switch failed in the “on” position at our rental unit. The unit ran non-stop for several weeks, unknown and/or unreported by the tenant. Once reported, we shut off the unit within a day and had it repaired as soon as we could coordinate an HVAC repairman with the tenant’s schedule (about a week later). Fortunately the repair was inexpensive and the unit does not appear to have suffered long-term damage from the constant running. However, the electric bill, which is paid by the tenant, is large. Who is responsible for the excessive electricity used?

Asked on November 7, 2011 under Real Estate Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

As a general matter, whoever is responsible for the maintenance and repair of the equipment would be responsible: the additional costs were caused by a maintenance or repair problem (and so were preventable by the party which is responsible  for repair and maintenance), and not by the tenant's use of the A/C. The exception would be IF the tenant knew of the problem--not just that the unit was running non-stop, but that it was not supposed to run non-stop (i.e. that something was wrong)--and, knowing of the problem, failed to report it to the landlord: in that case, the landlord may be able to hold the tenant liable for the costs the tenant's failure to provide notice caused.


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