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Ask Dave

Being a Good Neighbor

Adam and his wife own rental property in California. A sprinkler broke and flooded the property next door. Both insurance companies determined Adam wasn't at fault. Should he pay for the damage?

QUESTION: Adam in Oklahoma City and his wife own rental property in California managed by a property management company. A sprinkler broke and flooded the property next door. The property is owned by another out-of-town landlord, but both insurance companies determined Adam wasn’t at fault. Should he pay for the damage?

ANSWER: It doesn’t matter. Water ran from your property and damaged his. You don’t have to be negligent. He was just sitting there minding his own business, and your sprinkler dumped a ton of water in his building. I’m going to bust your insurance company in the mouth. What about yours? You’re the one liable.

Morally, you just opened up the window and squirted a water hose all in his house while he was sitting there empty and had nothing to do with it.

You don’t have as much control as you do responsibility. The reality is you can’t completely control it, but if your tenant is engaging in things that leave you as an owner liable, that can happen. How liable you are—whether you’re criminally liable or whether you would be liable for punitive damages—would have to do with negligence. But that’s punitive. That’s not just repairs. Whatever damage was done to his apartment was done by water coming out of yours. If I’m him, I want my money.

I’d write a check and pay his deductible and be thankful you got out of this and tell him you’re sorry for all his problems.

My insurers make their own decisions. I don’t get to control that. The only thing I can do is fire them if I don’t like their decisions and put different policies in place. But they’re a business. I don’t get to control them. I can try to influence them, but most of the time, they don’t give a rip what I think.