LLs renting houses with oil tanks ... how to handle change in tenants? (lease, tenant)
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I have one rental property in New Hampshire, a house that I used to live in. My great tenants just got transferred to Louisiana so I have to get new tenants. In the time that the current tenants have been renting the house, I have added an oil tank and oil furnace (previously the house was heated with a pellet furnace).
I am wondering how to handle the leftover oil heat. The tenants had thought they would be staying another year, but the husband just got transferred (they will be moving in mid-July), so there is still oil left in the tank. Should I just measure it and charge it to the new tenants? This is typically done in my area when houses are sold; i.e., the oil is measured and a standard chart is used to show how many gallons are in it, then the buyer is charged the going rate on closing day. (My leases always end in the summer, so rates are typically the lowest they get.)
The alternative is for me to fill the tank and reimburse the outgoing tenants for what was in it to begin with (e.g., if it takes 150 gallons to fill, that means it had 125 gallons in it so that's what they would get reimbursed for), then write into the lease that the tenants have to leave it full because that's what it was at the start of the lease. This is what I do with the propane tank -- the tenants get it full on move-in and have to have it filled within a day or two of their move-out date so they LEAVE it full -- but the oil tank is much larger so I'd prefer not to do this -- if I were to get a bad tenant who left it empty, I could charge it to their security deposit, but it would take up a huge chunk of it. It would also be a large up-front cost to me now, which I'd prefer not to spend!
So LLs who rent houses with oil tanks: how do you handle a change in tenants when there is oil left in the tank? (The tenants aren't allowed to run it dry, as that would require a service call ...)
I would reimburse the leaving tenants whatever oil is in the tank. I would have it measured and tell the new tenants whatever amount of gallons there are, that's how they have to leave it at upon vacating OR be charged it against their security deposit.
(and the leaving it full works too but up to you!)
Thanks for the reply! I just met with a prospective tenant today (he actually works with the guy who's moving) -- he's been renting a house and he said the rule there is the tank is half full when the tenants get there and they have to leave it half full when they leave. I think I can manage that more easily than having to spend a lot of money on a full tank.
I will have to find out from the current tenant how much they have left. I think they bought it 150 gallons at a time so there's probably not a lot in there that I would have to reimburse them for.
I moved into a place with oil heat & a empty tank. When I left it had 1/2 tank I never got a thing I didn't feel this was fair! I feel What fair is You pay them for the oil they left since IF I understand they too had a empty tank since you just installed a new tank etc. & You also top it off the new tenants or each tenant as they leave Top it off for the next ones.
I moved into a place with oil heat & a empty tank. When I left it had 1/2 tank I never got a thing I didn't feel this was fair! I feel What fair is You pay them for the oil they left since IF I understand they too had a empty tank since you just installed a new tank etc. & You also top it off the new tenants or each tenant as they leave Top it off for the next ones.
Katie, I don't blame you for thinking it was unfair -- it definitely was! But what did your LEASE say about it? I would think that most leases for houses in New England would have something about it since the situation would be so common. Mine didn't because when the current tenants moved in, there wasn't an oil tank -- I added it while they were living there.
Assuming it's no more than this now, I will likely ask that the tank be left 1/4 full (about 65 gallons). I will indeed reimburse the tenants for what they have in the tank, and then will include in the new lease that it has to be left 1/4 full. I definitely won't fill it -- that is way too much to have invested in case the future outgoing tenants don't leave it full -- I could take it out of their security deposit, but depending on oil prices at that time, it could take a huge chunk of it. Too much of a risk.
I'd say treat it the same way that rental car companies treat gas tanks. Return it with the same amount.
I would go ahead an reimburse the current tenants (if its just $150-300 bucks, that shouldn't be that big of a deal) since all of this work was done with them there and they paid for all oil. Also, go ahead and half fill the tank (or just leave it as is). Make it clear to the new tenants that the house must be vacated with it half full or whatever amount it was when they moved in.
Does the tank have a way of telling how much oil is in there?
I would do it the way rental car companies is do it. You get it with x gallons of fuel in the tank you return it eith x gallons of fuel or you get charged Y price to have the tank filled with fuel to bring it to x gallons that you started with.
So if you start with a full tank every tenant when keaving is responsible for the tank to be full.
I would bump the deposit amount to cover filling a full tank for future issues if any.
If your current tenant paid for the fuel reimburse them the leftover remaining fuel and that's now your fuel. But it will always be your fuel. Because every tenant will have to give you back that amount
I'm wondering how this would work. What if there was some kind of pre-pay for a tank when they move in? Like when you rent a car.
Well, with my rental house at least, there WASN'T any pre-pay, as the oil tank wasn't there yet.
Quote:
Originally Posted by lepoisson
I'd say treat it the same way that rental car companies treat gas tanks. Return it with the same amount.
I would go ahead an reimburse the current tenants (if its just $150-300 bucks, that shouldn't be that big of a deal) since all of this work was done with them there and they paid for all oil. Also, go ahead and half fill the tank (or just leave it as is). Make it clear to the new tenants that the house must be vacated with it half full or whatever amount it was when they moved in.
Yes, this is exactly what I will be doing. I suspect the tank will be 1/3 full or less (<100 gallons) because the tenants were using it as a back-up to the pellet furnace (2 sources of heat at that house). If it's less than half a tank, I will have enough gallons of oil added (at my expense) to make it half full (unless I go with quarter-full).
Quote:
Originally Posted by lepoisson
Does the tank have a way of telling how much oil is in there?
Yes, there are standard charts for this (I know they are STANDARD because I checked half a dozen oil companies and all of their charts were the same!). Oil heating is VERY common in New England -- e.g., there's no natural gas in my part of New Hampshire so almost everyone is on oil heat (a few have propane, but that is even more expensive). The way it works when you sell a house is, the oil is measured on closing day (or the day before) -- literally, with a ruler -- and the buyer pays the seller for that oil at closing, at the price on closing day. (The first house I bought had a 1,000-gallon underground tank. I closed in early March so oil prices were HIGH. It was a huge extra expense at closing. )
The oil tank that my rental house has is a 275-gallon one. At today's prices, it would cost $657 to fill it. That isn't huge, but I don't WANT to fill it because in VERY recent years, the price has been more than a dollar more per gallon, so we're talking $1,000 to fill. If I had tenants who didn't fill it before leaving -- even though they knew they were supposed to -- that would take a very large part of their security deposit ($1,300), so g-d forbid if there were any other damages!
How about a Deposit for a tank of oil.... IF its left full they get it back! IF not you keep it for fill up/top off.
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