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Posted: 22:16 on 04-30-2008

Interesting situation was presented to me by my property manager (PM) in Florida. The tenant started work at a local design firm well known in the area. The firm offers discounts to its employees for material and labor. The tenant proposes to install new laminated linoleum that looks like hardwood flooring in the kitchen, dining room, living room, hall and hall bath, and something similar in the master bathroom. The tenant also proposes to install crown molding in the dining room, living room, and maybe the kitchen. She also intends (note not propose) to install carpeting in the 3 bedrooms, which I know is old and very dirty. I haven’t replaced it in over 5 years. She proposes to pay for all the cost for the work.

In return, she asked for locking in a 3 year lease just to ensure she gets to enjoy her improvements, and to adopt 2 cats that belong to her decease mom. There is no mention as to who will be doing the work and the type of materials. I can only imagine that she will not be doing the work. According to the e-mail between the tenant and PM, the designer indicated to her the work will improve the value of the property.

Is this recommended? I read in past how tenants promised to do work to the property only to do a worst job or left the work in mid-stream. Is there a risk to me? The tenant has been living in my house for about 3 years, and has for most part always paid her rent on time. I only recall a few late payments early into the lease, but not for awhile. She also replaced at her cost for a new range and dishwasher, which I had no indication she broke it or it was in need of replacing. The prior dishwasher was less than 4 years old. I thank you in advance for your comments and suggestions.

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d_random

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Posted: 23:22 on 04-30-2008

Wow! I would be very temped to give her the go ahead.

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ypochris

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Posted: 00:32 on 05-01-2008

I wouldn't offer a rent reduction for promised work again, but a lease conditioned on completion of the work would be tempting. Do you have any way to supervise the work to insure it is done properly, or at least inspect to see if it has been completed?

If the carpets need replaced anyway at the end of her tenancy, it is hard to see what you have to lose. The length of her prior tenancy is a big factor in her favor.

Chris

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BNR

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Posted: 09:30 on 05-01-2008

Quote:

On 2008-05-01 00:32, ypochris wrote:
I wouldn't offer a rent reduction for promised work again, but a lease conditioned on completion of the work would be tempting. Do you have any way to supervise the work to insure it is done properly, or at least inspect to see if it has been completed?

If the carpets need replaced anyway at the end of her tenancy, it is hard to see what you have to lose. The length of her prior tenancy is a big factor in her favor.

Chris

I have no intention of offering a rent reduction. It would remain the same. Your advice if this moves forward is to put the conditions in writing formally? Not just via an e-mail. Correct?

The only means of supervising her work would be a visit or two by my property manager. The company is very busy so periodical visits are more than unlikely.

The tenant offered to take before and after pictures for updates.

On the matter of the carpets, if she leaves it will definitely need replacing. Note in my original posting the tenant "intends" to replace the carpet. She did not say with certainty that she will or propose to do so. Thank you.

Any one out there that went through a very similar situation and have words of advice? Thanks

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ypochris

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Posted: 09:48 on 05-01-2008

Yes, I would make the new, written, lease conditional on completion of repairs.

I have given (once) reduced rent in exchange for promised work. Very little of the promised work was completed, although the quality of the work that was actually done was good.

Chris

[ Edited by ypochris on Date 05/01/2008 ]

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royalfortune2

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Posted: 14:42 on 05-01-2008

I would make sure you have plenty of documentation. I would first make a written list of items to be done. I would ask for the names, contact info and license number info of the contractors doing the work. (I would make forms for the tenant to fill out with this information.) I would have her sign something (another form) saying that she has agreed to pay for this work completely. I would ask the tenant to take "before" pictures with a time/date stamp on them and to email them to you directly. I would have the tenant contact the property manager when the repairs are completed to have the prop man visit and at least confirm with you that the work was done and it safe. I would ask the tenant to email "after" pictures with a time/date on them.

When it's done to your satisfaction, I would write any sort of lease she wants, trimmed in gold thread and written in my own blood if that's what she wants.

And I'd consider myself lucky.

MC

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loon

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Posted: 14:46 on 05-01-2008

Yes, there's risk. And if she's bullying you into it, beware, as it can alter the LL-Tenant dynamic. For all you know, she's started already. The key is to control the process. Deal with it like you would a rehabber you're hiring. Get references, see examples of her work. Make sure she won't customize it to some weird, specialized tastes that may cause problms for you later. Will she do the work herself? If so, is she qualified to do it?

Still, it is an enticing idea. If you accept, I'd arrange to have it done in stages, so someone can inspect part one before she continues. That will reduce the risk of the whole place being torn apart, she gives up, walks away. You could even try to get her to put down a performance bond (reasonable since it's your asset) to be paid back with interest after satisfactory completion. You could explain that this kind of thing has failed for you (or partners) before, some $ would give you security; "you are planning to do a good job, aren't you?" She may not be able to afford it, but her response to the suggestion might yield a clue about how serious she is.

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BNR

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Posted: 14:54 on 05-01-2008

Thanks Chris, MC, and loon. All solid suggestions.

The summary I gather is put everything in writing - proposal, understanding of terms, and conditions.

The question I have next is how do I go about moving from her simple proposal via e-mail to the next stage of written document to verify if she is serious? One way is to draft an agreement by an attorney, but I don't have an attorney and it will cost me. Another suggestion is to ask her for greater details and emphasize that this isn't an approval. Do you have a suggestion? Thank you

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royalfortune2

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Posted: 17:39 on 05-01-2008

Quote:

The question I have next is how do I go about moving from her simple proposal via e-mail to the next stage of written document to verify if she is serious?

Sometimes, I just make official-looking documents, "Addenda to Lease Agreements," and etc, that lay out the whole thing in easy-to-read but serious-looking text. I lay it all out. With spaces for the tenants to initial here and sign here and all.

I make two copies. I send the two copies to the tenant with a stamped, self-addressed return envelope and instructions to sign one set and send it back to me (and keep the other copy for their own "files").

Tenants have told me that they really appreciate this and it helps them understand situations. And it "covers my rear" even tho it's not "official" or truly "lawyer-legal."

MC

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BNR

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Posted: 22:29 on 05-02-2008

Thank you all for your valuable input.

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mlawre

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Posted: 00:32 on 05-09-2008

Geez, those kind of tenants are like gold. Renters with owners pride improve property rather than destroy it. If you think you know her pretty well by her word and her tastes, I would allow her some leeway.

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ypochris

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Posted: 09:06 on 05-09-2008

Naturally we are all eager to hear how this worked out for you! Keep us updated...

Chris

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