Faulty hot water system causing large electricity bill: tenant wants "assistance" =$

Hi All,

I was notified via my PM that my tenant had written a letter explaining this situation:

A thermostat problem with the Hot Water service has caused their electricity bill to jump from around $200 to $700. The tenant has provided copies of their previous bills to verify this and the plumber indicated that this was a likely cause of the high bill. I have no reason to doubt any of the above as it's something that wasn't identifiable until the electricity bill arrived...

My question:
If I was to be "nice" and provide some sort of negotiated "refund" amount to the tenant - can this be claimed by me in any way as a maintenance cost (ie. tax deduction) or could it be covered under my building insurance somehow?

Not sure what to do - fork out to keep the tenant happy? Do I have to (legally) do anything at all?

Thanks for your thoughts and suggestions.
Hi Greg,

Your faulty equipment as a LL - your problem (probably)....especially since they have past bills as evidence.

Also discussed on this thread a while back:

The fact that you won't be getting $500 either by way of a refund to the tenant or non-payment of rent to the value of $500 means that you are essentially getting a tax deduction for it.