Airing out the dirty laundry with contracts

There is certainly appeal in providing laundry facilities for tenants, especially with the newfangled machines that offer phone apps and card payment options. When a landlord provides these laundry facilities, they must be accessible, safe, and functional for all tenants.

This includes maintaining the equipment, promptly addressing repairs, refunding any money that has been gobbled up, and ensuring the laundry area is clean and well-lit. All of this may seem like a pain, so it’s no wonder that many housing providers outsource this task.

Let’s look into the fine print, however. Is it until death do us part?

Generally speaking, housing providers need to review the contract and ascertain what they are getting themselves into. These laundry systems can make it very difficult for rental property owners to bow out of the lease. Many vendors will ask you to jump through hoops to cancel the contract. From our hard-won experience, a large number of landlords are not aware of automatic renewal provisions.

Commonly, new owners who purchase a multifamily property will inherit a contract from a laundry service provider, and they do not know about it. These purchasers of a building, naive to the contracts that previous owners entered into, can be shocked to learn that they are stuck with washers and dryers for years on end, especially when they forget to cancel the contract before its renewal date.

Owners cannot just remove the machines on their own because it’s a breach of contract.

We are not against laundry services. We just want owners to do their homework. 

Does the laundry provider have an automatic renewal provision? If so, how can the property owner cancel before the renewal date? Are there hidden service or administrative costs?

One particularly insidious provision in the contract might be that if the contract is cancelled before the term expires, the owner has to pay a lump sum of money in what amounts to a buyout. Questions abound, and we urge housing providers to do their due diligence before signing on the dotted line.

We do not begrudge laundry services for making money and protecting their investments by locking clients into an ironclad contract. But we do want landlords to fully understand the terms and make an educated decision.

On balance, we think that it may be more advisable for rental property owners to invest in their own machines, but that is up to individuals to decide.

We have always practiced law on the presumption that there are good landlords and bad landlords. Conversely, there are good tenants and bad tenants. We can say the same for third-party laundry services or any other vendor, for that matter. There are good services and bad services, but with proper research and asking pointed questions, landlords can make an informed decision on who to partner with.