(CA) Demand Lost Rent from Property Manager for Delay in Pulling Water Heater Permit

[emery84]

What is the name of your state? California

A new electric water heater was installed (converted from gas to electric) by property manager (hired licensed plumber and electrician) without a permit, written estimate and owner authorization. Tenant moved out a few weeks later. At that time, owner asked for a permit for the water heater. Manager said there wasn’t one. But, he will have plumber and electrician pull required city permits.

Manager took 2 months (despite owner emailing multiple times to get the permits asap, lack of communication) to have plumber and electrician pull required city permits, then city inspection passed. Owner did not pull permit themselves in order to have plumber and electrician be liable for any permit work. Owner did not want to place a tenant because of liability, safety, insurance would not cover damage caused by unpermitted water heater or electrical work, etc.

Property manager (RE sales agent) has no broker license (illegal) and gave no management agreement. Manager paid for work and is asking to be reimbursed $2500 (work was overpriced by $500 per estimates). Can owner legally charge manager (deduct from reimbursement) for two months in lost rent?

 

[Just Blue]

What is the name of your state? California

A new electric water heater was installed (converted from gas to electric) by property manager (hired licensed plumber and electrician) without a permit, written estimate and owner authorization. Tenant moved out a few weeks later. At that time, owner asked for a permit for the water heater. Manager said there wasn’t one. But, he will have plumber and electrician pull required city permits.

Manager took 2 months (despite owner emailing multiple times to get the permits asap, lack of communication) to have plumber and electrician pull required city permits, then city inspection passed. Owner did not pull permit themselves in order to have plumber and electrician be liable for any permit work. Owner did not want to place a tenant because of liability, safety, insurance would not cover damage caused by unpermitted water heater or electrical work, etc.

Property manager (RE sales agent) has no broker license (illegal) and gave no management agreement. Manager paid for work and is asking to be reimbursed $2500 (work was overpriced by $500 per estimates). Can owner legally charge manager (deduct from reimbursement) for two months in lost rent?

Who are you in this situation?

 

[emery84]

Who are you in this situation?

Owner.

 

[FarmerJ]

I have never heard of a landlord refusing to re rent a empty unit over such a issue . Even if the install was done badly I doubt that you would have lost in a court if you had to sue a licensed plumber or electrician who didn't file a permit for damages caused by a bad install . The other issue would be the labor to install that new unit. That hot water heater couldn't have cost more than 300.00 ( electric tanks are cheaper than gas ) in big box hardware stores. AS to the logic to change it from gas to electric and the extra labor because of the wiring needed to support a all electric heater then what was the reason the PM claimed gas couldn't be used again ? since if it was gas to start with then a licensed plumber should have been able to just switch it out ( I think you should get rid of the PM as soon as you can and don't sit on a empty unit like that again. AS to paying the PM are you in a written agreement with the PM and if so does it address disputes ?

 

[emery84]

I have never heard of a landlord refusing to re rent a empty unit over such a issue . Even if the install was done badly I doubt that you would have lost in a court if you had to sue a licensed plumber or electrician who didn't file a permit for damages caused by a bad install . The other issue would be the labor to install that new unit. That hot water heater couldn't have cost more than 300.00 ( electric tanks are cheaper than gas ) in big box hardware stores.

Right, $343 for an electric water heater. The water heater job was $500 more than the big box hardware stores.

AS to the logic to change it from gas to electric and the extra labor because of the wiring needed to support a all electric heater then what was the reason the PM claimed gas couldn't be used again ? since if it was gas to start with then a licensed plumber should have been able to just switch it out ( I think you should get rid of the PM as soon as you can and don't sit on a empty unit like that again.

New water heater regulations requiring an additional 6" of space in the water heater closet prevented just switching it out. Plumber suggested the most feasible way is to convert to electric. However, the water heater was installed without the owner receiving a written estimate, given the opportunity to get a second opinion or authorizing the work.

AS to paying the PM are you in a written agreement with the PM and if so does it address disputes ?

No a management agreement was requested multiple times, but never provided. PM forged a PM agreement to cover the said period based on a valid previous PM agreement that had expired a couple years prior. Existing emails prove PM's breach of oral instructions by the owner.

During the "emergency," owner immediately emailed PM multiple times requesting the scope of work needed and a written estimate. Ignoring owner's requests for a written estimate, four days later, the PM manager emailed: he has authorized plumber and electrician to start work the next day. Immediately that day, the owner emailed, texted and phoned PM to stop—that they did not authorize any work to be done and never received any written estimate as requested multiple times. When owner called the PM for a written estimate, the PM said the water heater has already been installed. PM did not send a written estimate until after the water heater was installed.

Owner is not sure if they mitigated damages enough and can lawfully deduct lost rent.

 

[justalayman]

If you have no property management agreement, who is the person acting as a property manager?

It’s obvious there is a contract in place. Otherwise, what is wrong with you letting some unengaged party manage your apartments? Your actions and statements here prove there is some contractual basis for the person to act as the pm.

Owner did not pull permit themselves in order to have plumber and electrician be liable for any permit work.

So you were aware of the activities going on. That flies in the face of this statement

A new electric water heater was installed (converted from gas to electric) by property manager (hired licensed plumber and electrician) without a permit, written estimate and owner authorization.

So, to your question:

Can owner legally charge manager (deduct from reimbursement) for two months in lost rent?

What does your contract with the pm say to the matter? Barring a contractual right, until a court says the pm owes you for the lost rent, they are not liable for the lost rent.

The delay may not be the pm’s fault anyway. If the contractors were liable for pulling permits, it may have been their delay that prevented the issuing of the permits.

 

[justalayman]

I have never heard of a landlord refusing to re rent a empty unit over such a issue . Even if the install was done badly I doubt that you would have lost in a court if you had to sue a licensed plumber or electrician who didn't file a permit for damages caused by a bad install .

Actually since the owner was aware of unpermitted work, if that unpermitted work caused damage or injury to a tenant, owner could very likely be held liable for those damages or injuries. Having seen a water heater shoot 40 feet into the air when it ruptured due to an inoperative prv, there is a very valid reason to not allow a tenant to move into a unit with an uninspected water heater install.

 

[justalayman]

Manager paid for work and is asking to be reimbursed $2500 (work was overpriced by $500 per estimates)

Did the big box stores view the building prior to providing the estimate? I can tell you that a simple difference such as breaker panel manufacture differences can make a $100 or more difference in the cost of the job. Unless the estimate was actually a bid, it is only an estimate and not legally dependable. It may be supportive of an excessive fee in a contract but it is not proof of an excessive fee. Unless you are attempting to pay the PM less than the $2500 as reimbursement, it’s irrelevant

 

[emery84]

If you have no property management agreement, who is the person acting as a property manager?

It’s obvious there is a contract in place. Otherwise, what is wrong with you letting some unengaged party manage your apartments? Your actions and statements here prove there is some contractual basis for the person to act as the pm.

There is no written management contract in place, even though owner asked for one multiple times. As a result in the owner's mind, the only agreement is x percentage of rent when tenant is placed, then x amount of rent per month. No authority was given to contract work for repairs, for emergencies, without owner approval, etc. There is a written month-to-month lease agreement between RE sales agent (acting as manager/landlord) and tenant.

So you were aware of the activities going on. That flies in the face of this statement

Owner was not aware a water heater permit was required and not applied for until 3 weeks after the water heater was installed. Permit center advised to have plumber and electrician pull the permits. Following is what the city permit center told owner which is also on another city's building inspection website:

Who Should Get the Permit?

The property owner or a contractor licensed by the State of California can obtain permits. Tenants may obtain a permit if they have the written permission of the property owner and the property owner signs the permit documents.

It is always best if a licensed contractor obtains the permit. The contractor must provide a bond to ensure that the work will be started and completed in a timely manner, constructed in accordance with the various codes and performed with an acceptable degree of workmanship. If the work is not completed or if the work is not completed according to code, the bond could be used to pay someone else to finish or redo the work.

If the owners obtain the permit they act as the contractor and are responsible for completing the work and to assure that it meets code requirements. Interaction then takes place between Building Division inspectors and the owner. If the owner has hired a contractor or other person to do some of the work and it is not done in accordance with the approved plans and code requirements, the inspector will ask the owner, not the contractor, to have the work redone. In other words, if the owner obtains the permit it is the owner's responsibility to make sure the work is being done in accordance with the approved plans and codes.

So, to your question:

What does your contract with the pm say to the matter? Barring a contractual right, until a court says the pm owes you for the lost rent, they are not liable for the lost rent.

The delay may not be the pm’s fault anyway. If the contractors were liable for pulling permits, it may have been their delay that prevented the issuing of the permits.

Again, no written contract. There is only a limited oral agreement as described above.

Plumber asked but, PM declined to get a permit. Plumber told owner, he was surprised PM later requested the permit. Once the PM asked, the plumber applied for the permit the next day. So, he said he is not to blame him for any loss rent. He said he experienced lack of communication and followup with the PM. If there is anyone to blame, it would be the PM.

PM was the one to drag his feet in coordinating pulling the permits. Given the PM promised to have the permits pulled and what the permit center advised, owner waited for the PM. However, eventually the owner would have pulled the permits themselves to mitigate damages.

Did the big box stores view the building prior to providing the estimate? I can tell you that a simple difference such as breaker panel manufacture differences can make a $100 or more difference in the cost of the job. Unless the estimate was actually a bid, it is only an estimate and not legally dependable. It may be supportive of an excessive fee in a contract but it is not proof of an excessive fee. Unless you are attempting to pay the PM less than the $2500 as reimbursement, it’s irrelevant

Big box stores have the exact same brand and model number of electric water heater. The price to install and haul away is $500 less. The plumber said it was a standard install: no extra work was needed, but charged $500 more. The electrician was hired and charged separately for "breaker panel" and electrical work. Owner wants to pay fair market value $2000 minus rightful damages.

 

[justalayman]

Most contracts don’t have to be written to be enforcesble. Your actions would ratify the terms of the contract. The fact you demanded to see an estimate prior to the work shows you have granted the pm the duty of procuring repairmen.

If the pm didn’t have the authority to contract work, then pm had no duty to ensure a permit was pulled or anything else. So now what you are describing is an independent party apparently believed they had the right to engage the contractors on your behalf and paid on your behalf. That means you owe whatever the bill was thst the not a pm paid on your behalf.


And this obviously wasn’t a standard install since you were changing from a gas to lurean electric water heater.

So now you say the $500 difference was only for a swap out of a like style water heater.

What do you have to prove the electrical wasn’t a valid fee as stated?


And since you claim the pm didn’t have the authority to engage the contractors, then there are no damages due to their fsilure to fulfill their duties to you. They had no obligation (per your own statements) to do anything. That means they weren’t obligated to ensure the permits were pulled and they weren’t obligated to chase the contractors for the permits. That appears to have been your obligation. Since you didn’t seek to have the contractors provide them, the inability to rent the unit is on your head.

 

[emery84]

Most contracts don’t have to be written to be enforcesble. Your actions would ratify the terms of the contract. The fact you demanded to see an estimate prior to the work shows you have granted the pm the duty of procuring repairmen.

Owner agreed (via meeting and emails) PM is to have plumber diagnose the problem and get estimates, not contract repairmen to do work.

Owner’s actions as previously posted:

During the "emergency," owner immediately emailed PM multiple times requesting the scope of work needed and a written estimate. Ignoring owner's requests for a written estimate, four days later, the PM emailed: he has authorized plumber and electrician to start work the next day. Immediately that day, the owner emailed, texted and phoned PM to stop—that they did not authorize any work to be done and never received any written estimate as requested multiple times. When owner called the PM for a written estimate, the PM said the water heater has already been installed. PM did not send a written estimate until after the water heater was installed.

If the pm didn’t have the authority to contract work, then pm had no duty to ensure a permit was pulled or anything else. So now what you are describing is an independent party apparently believed they had the right to engage the contractors on your behalf and paid on your behalf. That means you owe whatever the bill was thst the not a pm paid on your behalf.

PM had limited authority to manage property, including having a plumber diagnose water heater, give an estimate and coordinate pulling of the permits by the plumber and electrician (via meeting and emails). PM was not given authority to contract work without estimates and authorization from owner.

Hypothetically, if both PM and owner agree and sign the following section, does the PM have the authority to spend without owner’s approval? In absence of this signed statement/agreement, does the PM have the authority to spend without owner’s approval? Even if the owner texted, emailed and phoned not to do the work?

“REPAIR; MAINTENANCE: Property Manager shall obtain prior approval of Owner for all expenditures over $_____ for any one item. Prior approval shall not be required for monthly or recurring operating charges or, if in Property Manager's opinion, emergency expenditures over the maximum are needed to protect the Property or other property(ies) from damage, prevent injury to persons, avoid suspension of necessary services, avoid penalties or fines, or suspension of services to tenants required by a lease or rental agreement or by law, including, but not limited to, maintaining the Property in a condition fit for human habitation.”

And this obviously wasn’t a standard install since you were changing from a gas to lurean electric water heater.

So now you say the $500 difference was only for a swap out of a like style water heater.

What do you have to prove the electrical wasn’t a valid fee as stated?

Please see previous posted explanation: There is a $500 overcharge for same exact brand and model water heater. Electrical part, of the $2500, will be paid in full.

And since you claim the pm didn’t have the authority to engage the contractors, then there are no damages due to their fsilure to fulfill their duties to you. They had no obligation (per your own statements) to do anything. That means they weren’t obligated to ensure the permits were pulled and they weren’t obligated to chase the contractors for the permits. That appears to have been your obligation.

Already explained above: “PM had limited authority to manage property including, having a plumber diagnose water heater, give an estimate and coordinate pulling of the permits by the plumber and electrician (authorized through emails). PM was not given authority to have work done without estimates and authorization from owner.”

By CA law, contractors are required/obligated to pull permits for water heaters in the subject city. PM said he would coordinate the pulling of the permits (in meeting, emails) and owner relied on his statements.

Since you didn’t seek to have the contractors provide them, the inability to rent the unit is on your head.

Already stated above, owner sought to have contractors provide permits once they found out the work had been done without permit. Owner hired/relied on PM to manage/landlord property given his claim of experience and knowledge in PM. Owner relied on PM's statement (via meeting and emails) that he would coordinate the pulling of the permits.

Thank you for your replies.

 

[justalayman]

Your statements continue to morph to attempt to fit within the issues my questions bring up

It’s likely the pm had no lawful ability to pull a permit. Your temporary authorization wouldn’t change that. It is a matter of law. It’s quite likely the contractors had to pull the permit. They should not have unloaded a toolbox unless there was a permit so realistically I see either the contractor or you as responsible to obtain the permits and their failure to do so is not the pm’s issue.

Then, remember , you keep saying the pm didn’t have the authority to comtract with the contractors so it’s none of their business or control if s permit is even obtained. Your after the fact obligation you want to place on the pm suggests either they did have the authority to comtract or you have no business chasing after the pm for the lost rent since they had no business even asking the comtractors. To provide the permjt.

To,the big box store estimate: unless it was a binding contract, it was only an estimate and unless somebody actually visited the premises, I suspect one or more of the 87 exceptions (hyperbolic statement) and reservations included in the fine print would result in a higher cost. A “site unseen” estimate isn’t worth much.

I see you said the electric portion of the bill would be paid in full. Was the big box store even aware you were changing power sources when they provided the estimate? Did the big box estimate include properly terminating the gas supply and properly sealing the exhaust flue?

Was the big box store able to install the water heater in the very short time frame the pm achieved the work in? Rushed jobs often have a premium for expediency.

Owner hired/relied on PM to manage/landlord property given his claim of experience and knowledge in PM.

Oh for Pete’s sake. Make up your mind. Either they were a rent office or they were hired where the stated qualifications made a difference. Again you make a statement suggesting the pm had much more authority to act than you,state here.


I also suggest you consider the issue a lack of hot water is in a landlord tenant issue. It sounds like the pm “took care of business” while you simply waited around for somebody else to do something. If the pm didn’t have the authority to act, you should have taken control and sought out contractors to do the work. You didn’t: the pm did. Maybe you should send them a gift certificate for a dinner out rather than trying to screw the guy out of money.

 

[emery84]

Your statements continue to morph to attempt to fit within the issues my questions bring up

It’s likely the pm had no lawful ability to pull a permit. Your temporary authorization wouldn’t change that. It is a matter of law. It’s quite likely the contractors had to pull the permit. They should not have unloaded a toolbox unless there was a permit so realistically I see either the contractor or you as responsible to obtain the permits and their failure to do so is not the pm’s issue.

Then, remember , you keep saying the pm didn’t have the authority to comtract with the contractors so it’s none of their business or control if s permit is even obtained. Your after the fact obligation you want to place on the pm suggests either they did have the authority to comtract or you have no business chasing after the pm for the lost rent since they had no business even asking the comtractors. To provide the permjt.

This is restating what has already been said but may have not been made clear or misunderstood.

It is the PM’s issue because he contracted, authorized, purchased and declined the permits without the owner’s knowledge or approval.

As stated, there are legal and liability issues of placing a tenant with an unpermitted water heater. Owner approval was given (via emails and meeting) for diagnosis, an estimate and coordinating pulling of permits only. Owner approval was not given to purchase water heater and work to be done. PM was emailed, texted, and phoned multiple times for result of diagnosis and written estimate. Owner was denied the right to choose a different contractor, choose to get a permit, choose a lower price, only replace a part, not convert from gas to electric, etc.

While owner was waiting for the diagnosis and written estimate, PM was having the water heater installed without owner’s knowledge or approval. In the hypothetical, I gave the standard repair expenditures authorization statement that is included in the C.A.R. property management agreement which requires owner initials and signature.

To,the big box store estimate: unless it was a binding contract, it was only an estimate and unless somebody actually visited the premises, I suspect one or more of the 87 exceptions (hyperbolic statement) and reservations included in the fine print would result in a higher cost. A “site unseen” estimate isn’t worth much.

I see you said the electric portion of the bill would be paid in full. Was the big box store even aware you were changing power sources when they provided the estimate? Did the big box estimate include properly terminating the gas supply and properly sealing the exhaust flue?

Was the big box store able to install the water heater in the very short time frame the pm achieved the work in? Rushed jobs often have a premium for expediency.

Two estimates for the same exact brand and model electric water heater were around $500 lower and they could install same day, on the weekend. Per the plumber, it was a standard install with no special work needed. Electrician did all the electrical setup and charged separately.

Oh for Pete’s sake. Make up your mind. Either they were a rent office or they were hired where the stated qualifications made a difference. Again you make a statement suggesting the pm had much more authority to act than you,state here.

Again, he was hired to place a tenant and collect the rent. No written PM agreement was given. Owner approval was given (via emails and meeting) for diagnosis, an estimate and coordinating pulling of permits only. Owner approval was not given to purchase water heater and work to be done. For PM’s actions to have been legal, I believe PM would have to state in a written PM agreement: PM has authority to spend $2500 without owner’s approval. Then, owner would have to sign. Because, PM did not provide this he is liable for loss rent and FMV of water heater. This is what owner is questioning.

I also suggest you consider the issue a lack of hot water is in a landlord tenant issue. It sounds like the pm “took care of business” while you simply waited around for somebody else to do something. If the pm didn’t have the authority to act, you should have taken control and sought out contractors to do the work. You didn’t: the pm did. Maybe you should send them a gift certificate for a dinner out rather than trying to screw the guy out of money.

During the "emergency," owner immediately emailed PM multiple times requesting the scope of work needed and a written estimate. While waiting for PM to respond, calls were made to other plumbers, of which two could install the same day and were around $500 lower. Thanks again for your feedback.

 

[justalayman]

This is restating what has already been said but may have not been made clear or misunderstood.

It is the PM’s issue because he contracted, authorized, purchased and declined the permits without the owner’s knowledge or approval.

As stated, there are legal and liability issues of placing a tenant with an unpermitted water heater. Owner approval was given (via emails and meeting) for diagnosis, an estimate and coordinating pulling of permits only. Owner approval was not given to purchase water heater and work to be done. PM was emailed, texted, and phoned multiple times for result of diagnosis and written estimate. Owner was denied the right to choose a different contractor, choose to get a permit, choose a lower price, only replace a part, not convert from gas to electric, etc.

While owner was waiting for the diagnosis and written estimate, PM was having the water heater installed without owner’s knowledge or approval. In the hypothetical, I gave the standard repair expenditures authorization statement that is included in the C.A.R. property management agreement which requires owner initials and signature.






Again, he was hired to place a tenant and collect the rent. No written PM agreement was given. Owner approval was given (via emails and meeting) for diagnosis, an estimate and coordinating pulling of permits only. Owner approval was not given to purchase water heater and work to be done. For PM’s actions to have been legal, I believe PM would have to state in a written PM agreement: PM has authority to spend $2500 without owner’s approval. Then, owner would have to sign. Because, PM did not provide this he is liable for loss rent and FMV of water heater. This is what owner is questioning.


During the "emergency," owner immediately emailed PM multiple times requesting the scope of work needed and a written estimate. While waiting for PM to respond, calls were made to other plumbers, of which two could install the same day and were around $500 lower. Thanks again for your feedback.

Look up unjust enrichment and see why you need to pay the pm for the entire bill

Then, unless he had a legal duty to chase the permits (you continue to say it was not within his scope of work to engage contractors so chasing the permits wouldn’t be his obligation), he is not liable to you for the loss of rent. In addition you had the ability to mitigate your damages and failed to do,so.

And no, it wouldn’t require a written contract as you suggest but if you want to argue he would, this further supports my statement that he had no legal duty to chase after the permits.

Two estimates for the same exact brand and model electric water heater were around $500 lower and they could install same day, on the weekend. Per the plumber, it was a standard install with no special work needed. Electrician did all the electrical setup and charged separately.

Again, this was not a basic install. You ignored my statements regarding the gas line and exhaust flue. Thatnwork wasn’t free and surely isn’t included in a basic installation.

Pay the man and suck up the lost rent. Your actions, or lack of action, caused you more problems than what the pms actions did.

 

[emery84]

Look up unjust enrichment and see why you need to pay the pm for the entire bill

Unjust enrichment is when an owner is overcharged $500 for something they did not order, then coerced to pay for it. Paying the fair market value is not unjust enrichment.

Then, unless he had a legal duty to chase the permits (you continue to say it was not within his scope of work to engage contractors so chasing the permits wouldn’t be his obligation), he is not liable to you for the loss of rent. In addition you had the ability to mitigate your damages and failed to do,so.

It was not in the PMs scope to order $2500 work without owner's approval. It is the PM's fault for not ordering the permits when asked by the plumber and electrician. PM should be liable for his actions or lack thereof—that causes damages to the owner.

And no, it wouldn’t require a written contract as you suggest but if you want to argue he would, this further supports my statement that he had no legal duty to chase after the permits.

The expenditure authorization statements are part of the CA Association of Realtors property management agreement that most realtors in CA use. And, owner signatures are required to make them binding.

Again, this was not a basic install. You ignored my statements regarding the gas line and exhaust flue. Thatnwork wasn’t free and surely isn’t included in a basic installation.

Pay the man and suck up the lost rent. Your actions, or lack of action, caused you more problems than what the pms actions did.

I missed your flue part. But again, it was a basic installation. The plumber who installed it said it was basic. The flue was not sealed or taken down. The gas line was simply capped. It passed inspection that way. Afterwards, I did mention gas to electric conversion and the estimates are the same. The $500 overcharge is accurate.

It was the illegal actions of the PM that put the owner in the vulnerable situation they were in (e.g., shifting liability to owner, etc.). Owner relied on PM statements (via meetings, phone and emails) that he would have the required permits pulled. Thanks.