What To Do When Your Rental Property Burns Down

If you are lucky, you will never have to figure out what to do when your rental property burns down. It is one of the worst things that can happen to a property you own.

Three Scenarios

A fire can do a little damage or completely destroy the entire home. I have had to deal with several different fire scenarios and they are never fun.


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Scenario One

Once, a member of the maintenance staff showed up to repair a fence at a rental property. The tenant saw him and walked out to talk to him.  The tenants always loved this particular maintenance guy.


The problem was that she walked away from a boiling pot on the stove top.  This resulted in a fire and the entire kitchen was destroyed.   The maintenance man was able to put the fire out and save the structure.


Unfortunately, if the maintenance person had not been there, she wouldn’t have walked away from the stove!  The fire cost the landlord thousands of dollars to repair and a lot of inconvenience to the tenant.  The landlord paid for the damage in this case.


Scenario Two

In another situation, the tenant failed to call the rental office and report that his furnace had quit working. This tenant decided to use space heaters to heat the home. One of the space heaters over heated and burned the home to the ground.  This tenant had three children and one of them ended up in the ICU for several weeks.  Luckily for the family, everyone recovered.


This home was a complete loss.  The landlord rebuilt this home and sold it.  The funny thing is that the tenant never called to say the home burned down.  We didn’t find out that the home burned down until one of our contractors was working in the area and called to ask if we wanted him to board up our burned out house!  I was stunned and had no idea what he was talking about!  We were lucky we were not fined by the city. The fire happened on a Friday night and we didn’t find out until Wednesday morning.  There are rules dictating how quickly these homes have to be boarded up.


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We didn’t have any vacant homes at the time to move this family into.  So, the decision was made to refund the tenant’s security deposit so the family could move into another home.  Yes, it was the tenant’s fault technically but it was the right thing to do.  Their church rallied behind them and helped them get clothing, dishes and furniture for their new home.

Scenario Three

In another situation, a detached garage burned down.  Luckily, the main house and none of the neighboring homes were damaged.  We found out that the garage burned down as a result of the tenant installing wiring for a new light. It was done incorrectly and a fire resulted. In this case, the landlord was not going to rebuild the garage.  But, we did end up rebuilding the garage because the tenant wanted it.  The tenant agreed to pay the deductible and insurance covered the rest.


What Do You Do If Your Rental Burns Down?

Hopefully, you will be lucky enough to never have to deal with this type of situation.  But, if you do end up with a fire in one of your rentals, you need to know what to do.

  • If you are on the scene at the time of the fire, get the fire marshal’s contact information. But, you can always call the fire department that responded at a later date if you aren’t there at the time of the fire.
  • Make sure your tenants are ok and have a place to stay for the night and possibly the next few days. Family members or friends may step in and allow them to stay with them. But, be prepared to put them up in a hotel at least for a few days.
  • Contact your insurance company and report the fire to start the claims process.
  • Talk to your tenants and make sure they contact their insurance company as well. It is a good idea to require your tenants to carry renters insurance.
  • Make sure to document the property with pictures and/or videos.
  • Assuming the home was not completely destroyed, put together a written inventory of damaged items that need to be repaired/replaced.
  • List the appliances that were destroyed along with model and serial numbers. You should keep a list of these items in a file from your move in inspection.


Reparable Or Total Loss

Depending on the condition of the home, you will need to take one of two courses of action. 

  • For a home that has damage, you will need to contact a restoration company to help deal with the damage.  If the fire was contained to a small areas, the house may be able to be salvaged.  In this situation, talk to the fire marshal and ask when you and the tenant can walk through the property to determine what is salvageable.  Often times, there will be cherished items that can be saved.
  • A property that is a total loss will need to be secured until it can be torn down. That may entail boarding up where needed and having the utilities shut off. Check with your local code enforcement office as to the requirements and time frames to complete the board up so you do not get fined.


Also, make sure you can rebuild the home! Some areas have new regulations that you have to follow when you rebuild. When the entire house burned down, the contractor had to keep the foundation or the house could not be rebuilt. This created a whole new set of issues.


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The Aftermath

Initially, everyone is in shock and disbelief that the fire has occurred at all.  After the shock wears off, there will be a lot of questions as to who is responsible for paying for the repairs and restoration.

  • If the fire was the tenant’s fault, do they have to pay for fixing all of it?
    • Where do landlords find a reputable fire damage restoration company?
    • Who pays the landlord’s insurance deductible?
    • What if the fire was due to landlord negligence?
    • Does the landlord have to pay to replace the cost of lost tenant possessions?
    • Can landlords do fire damages repair themselves?
    • Do landlords have to pay for tenants to live elsewhere?
    • What about the lease agreement now?

The answers to these types of questions will factor into the way that landlords and tenants move forward after such a devastating event.


Who Pays For These Damages?

Don’t get your hopes up that the tenant will have any money to make repairs.  After all, you own the property, not the tenant.  You are going to be ultimately responsible for paying to repair everything.  Which means you, as the owner, had better have great insurance on all of your rental properties. 


Your tenant may need to be reminded that your insurance company will not pay to replace anything belonging to him and his family.  The tenant must contact his insurance company to get his renter’s insurance to pay up.  If your tenant doesn’t have renter’s insurance, it will be up to him to replace lost belongings. Often times, churches or local organizations can help the family replace some of their belongings.


Getting Your Rental Back In Shape

Depending on the damage to the rental, it may be a quick fix that only takes a few weeks or it may take months to get the home rebuilt.  The more damage there is, the longer it will take to get it back into rentable shape.


Unfortunately, not only are you going to have the cost of repairing the property, you are also going to be losing rental income while it is being restored or rebuilt.  This is a good reason to have a contingency plan and to have money put back for a rainy day.  You will need to be able to cover the cost of your deductible and the monthly mortgage payment until you can get it rented again.


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9 thoughts on “What To Do When Your Rental Property Burns Down

  1. We have a 7 unit apt bldg that was set on fire by tenant stupidity/ craziness? and negligence. It may be total loss. Ins called husband to offer settlement. I told him don’t be to quick to accept. Loss of income, all appliances etc. Who does demolition? What other things need considered? What a mess we are in. Not to mention all people out of housing. Are we required to pay back deposits? Please advise

    1. I am so sorry! That is awful! I am not an attorney. My recommendation would be to hire an attorney to represent you. Insurance companies historically speaking will low ball you. I would not be quick to take the first offer! You will have to pay an attorney but you may get much more money. You need to find a contractor who has experience with homes that have fire damage. This is not something that just any contractor will be equipped to handle! This person will be able to navigate the entire process from demolition to rebuilding. You also need to contact your local code enforcement office to make sure there are no restrictions for rebuilding. Sometimes, if the original foundation is not salveagable you need to get different permits. Good luck!

  2. I love your informative article of what to do when one’s house gets burnt down. My favorite tips are to ask a fire marshall after the fire is down to determine whether it is salvageable and ask local authorities about how to go about boarding up a completely burnt down house in order to safely close utility lines. If my house got burnt by a fire and sustained some damage, I would have a professional come by and fix it. Not only will they be able to fix my house as if nothing happened but also avoid burdens of adjusting to a new place.

    1. Thank you! A fire is a nightmare for all involved. Consulting with the fire marshal is a great idea. We have bought a couple of houses that have caught on fire and it is amazing what other damage they find when they start tearing the damaged areas out. If you can get them cheap enough, they can be worth the risk.

  3. Dealing with Camp Fire in Ca many people wondering about getting rent and security deposits back . Since homes were destroyed the 8th …. tent had been paid for Nov . , can they request return of balance and then too the deposit they made upon moving in . Is there a time line that the owner must return this money by ? Thank you

    1. That is a great question! It depends on what their lease says. Commercial leases tend to have a Loss of Services clause that protects the tenant. However, most residential leases say something like:

      “LOSS OF SERVICES Landlord shall not be responsible to Tenant or any others for a loss or reduction of services by acts not willful, or conditions beyond Landlord’s control,norshallanylossorreductionofservicesterminatethisRentalAgreementorreducetheamountofrentalduehereunder,
      except as provided by law. Examples include:hurricane,windstorms,tornadoes,floods,along with any acts of terrorism,any criminal acts, or bizarre accidents such as vehicles, planes, etc.”

      The landlord will be required to honor the lease. An attorney should be consulted because laws vary from area to area.

  4. One of my rental house’s burned Saturday 09/07/19 house was a total loss. no one even Called me, not even my tenet. A friend of mine drove by burnt house after they opened road back up and called me. My tenet was home when fire started and stated fire just leaped out of floor! the floor is cement. It was pretty obvious that fire started on car port and fire chief said the same, he called fire marshall because he thinks tenets are lying which I’m sure they did start fire but not sure how it makes any difference at this point? They had nothing to gain by burning their home of four years and have lost everything. I just really hope that insurance co can’t use my tenets stupidity to not pay.

    1. I am so sorry to hear that your rental house burned down. I don’t understand why the tenants don’t call landlords and let them know the house burned down!

      The first thing I would do is contact your insurance company and let them know that the house burned down. I am assuming the insurance company knows this is a rental home. If they do not, that will impact whether they pay out or not. As long as they know, it should not be a problem. Most fires are accidental and that is why you have insurance. I would also stay in touch with the fire marshal and get a copy of the report. Your insurance company will do this as well. The report will determine the cause of the fire. Let’s face it. Even if it is the tenant’s fault, they wont’ have the money to pay to rebuild the house.

      You will also need to get a contractor over to the house immediately to get it boarded and get all utilities shut off. Time is of the essence as you will get fined for leaving the house open in its hazardous condition.

      Good luck. Keep me posted on how this progresses.

      1. Well the fire Marshall finally got the truth out of tenets after they repeatedly lied. They had brought gasoline into house, using it in kitchen sink to clean hands of some sticky flex seal stuff, gas stove was beside sink and the rest isn’t hard to guess? It was a rental house and insured as such, insurance company says they will have check for total loss in days. my tenets had asked for security deposit and refund of September rent and I was gonna refund this until fire Marshall told me to hold off on that until he’s done. Im a one man landlord/managment team and will begin demo on Monday myself. first experience with fire what a nightmare.

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