Laundry shutdown a costly mistake?

Revenue from coin-op machines will likely exceed repair costs

By Inman News Feed
Add Comment Add Comment | Comments: 0 | Posted Sep. 23, 2010

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Revenue from coin-op machines will likely exceed repair costs

Robert Griswold
Inman News

Q: I live at a small apartment building with 24 units. In addition to a swimming pool and spa, we have a central laundry room with two washing machines and two dryers. The equipment is fairly old but it still works. However, the plumbing drains are a problem and the washing machines routinely have backed up for years.

One of the tenants apparently called neighborhood code enforcement and the city finally got word of it and cited the owner for a building code violation, giving the owner 30 days to make the necessary repairs.

The owner closed the laundry room for a few days and had his handyman attempt to make some minor repairs such as snaking out the line. But when he reopened the laundry room it was flooded again on the second day. So the laundry room was closed again and it has been over a month now with no signs that anything is being done.

I heard from another tenant that the owner got a bid to repair the plumbing drain lines for more than $1,000. Today I just received a letter from the owner saying that the laundry room is closed until further notice. So, needless to say, we no longer have usable washing machines on-site. What are the tenants' options?

A: On one hand, the on-site washing machines and dryers are not a "habitability" item but are an amenity of the building. The landlord is taking the position that there are no laws that require the laundry room, and he is unable or unwilling to make the necessary repairs to correct the problem.

However, the other side is that you (and most likely many of the other tenants) rented the property with the understanding and expectation that the laundry room was a feature that made the property more desirable, and the closure of the laundry room is a reduction in the services that you were receiving.

The concept of a reduction in service is used in many rent-control jurisdictions, and landlords have to consider the impact on their residents.

If the owner is eliminating a benefit for the tenants, then one alternative is for the owner to lower the rent based on the value of the reduction in service. For example, the owner may decide to install submeters to measure the actual usage of water in each rental unit and then the tenants will be responsible for paying their own water bill directly.

That means that the landlord has shifted the expense for water to the tenant and has decreased the level of service or benefit to the tenant.

However, the owner could give proper notice for month-to-month tenancies or make the change at the end of the current lease term as long as he lowers the rent by what would be the average water bill for a comparable unit.

So if the water bill averages $50 per month for a comparable unit, then the tenant's rent should be adjusted down by $50 per month so that a tenant who used a reasonable amount of water would find his or her costs for housing to be the same.

Sometimes certain attributes or features that you enjoyed about a property cannot continue to be offered, and it is beyond the control of the owner.

A common example is the loss of a view due to construction or the growth of trees at a neighboring property, but there are other situations that are also beyond the control of the owner.

Maybe you live in an area where local water conservation efforts made the continued irrigation of a large area of a grass lawn area a violation. It would then be reasonable for the owner to remove the lawn or replace it with artificial turf.

While this technically would also be a change from what you were provided when you moved in initially, it is my opinion that the owner could make the change.

Under these scenarios, the owner was faced with a situation in which it was physically impossible to continue to provide an amenity for some reason, and therefore no rent adjustment would be required. This is not the situation facing your landlord, as the laundry room can be reopened for a fairly modest investment.

Others may disagree, but it would be my opinion that a $1,000 cost to replumb the building to allow the two washing machines to work properly is not cost-prohibitive. In a 24-unit apartment building, the owner is likely generating several thousand dollars per year in gross revenue from these machines.

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