I am renting a house to a tenant that keeps making improvements to the house. He put in a backsplash in the kitchen, put up larger fence doors, light fixtures and fans, etc. I keep telling him to stop and he says dont worry about it, you wont owe us anything, we just love the house. I did pay for new flooring in the house and he put it in himself which I am paying him by taking money off rent $350 for 5 months. Now he wants to replace the shed. I finally told him to stop doing it and that no, he cannot do that. He got all huffy and puffy and said that he may just go buy a house etc, he said we dont owe him anything but then contradicted himself and said: " do you know how much money I spent here"? I was planning on renewing the lease, which is 3 months away. What should I do? Any specific language that I can include in the new lease? These improvements need to stop. Thank you
It sounds like you may have contributed to the problem by giving them a discount on rent in exchange for labor. We have several tenants that try to offer exchanges like this, and it's always a hard no. When you discount rent for any reason, tenants think that everything is now negotiable and anything you say is just a suggestion. They take ownership in the house and don't feel the need to communicate with you or get your approval for these types of things. We love our tenants and treat them with respect, but we never negotiate any type of payment plan with them and never discount rent for any reason whatsoever, for the exact reasons you have listed. When a tenant requests an improvement, we consider it, and if we are in agreement, we hire a third party contractor to do the work. In those cases, the tenant gets what they want and feels appreciated and we still maintain control of improvements to the property.
At this point, with this tenant, it sounds like your only option is to send them, in writing, a demand to stop making "improvements" without written approval. They won't like it and will probably not be much fun to deal with from now on, but you gave them too much leniency up front and are now paying the price for it. I'd chalk it up as a learning opportunity and do it differently the next time you place a tenant. Best of luck!
Thank you. You make a valid point. The only credit I gave him is for the floor but I shouldn't have done that. This was 6 months into the lease. Prior to that all the little things just kept showing up. They seem like very nice people but the guy took offense to it when I told him firmly that no more improvements are to be made.
This is probably bad advise but here’s my opinion ..if he’s a good tenant otherwise and pays his rent and he’s doing tasteful improvements that Add value and maintains his repairs why would you want to drive off such a tenant . I’d allow him under one condition .. he signs a document stating he is doing this all on his own free will and expense knowing he won’t get any money or credit from the work he performs now or in the future and the work must be pre approved by you first . You got a good thing potentially if you play your cards right imho
Any improvements added on the property will add value to it. You will get more rent in the future. Often it is those tradesmen renting do nothing to help, do do not pay rent on time but asking for discount that are hanging around.
Plain and simple, it's not their property and they should be asking for approval before they make any changes to the property. I'm hesitant to say "improvements" bc not all changes are improvements. Everything should be in writing...faucet swaps, toilet paper holders, hand towel rings, etc. Anything. CYA type of thing. Give them an inch and they take a mile, not all will but most. Why aren't they buying a house is the question? Not saving their $ but throwing money away into a property they'll eventually have to walk from and can't take it with them. You need to regain control of the property. In the future make sure your lease has a clause about changes made to the property and always put things in writing as you go along so everyone is clear of expectations. Good luck.
Thank you. I appreciate the response
Like others have said I would suggest not letting tenants do suggestions to begin with.
I see where @Dennis M. is coming from, but that just sets up for possible disagreements. Documentation doesn't prevent disagreements....and it could spiral into a big time-consuming problem. Just don't allow it. Simplify your business.
Tenants do tend to get upset when you tell them what they don't want to hear. This is a taste of why they can be so nice and your friend until you have to do something they don't like. He will get over it. Just be firm, yet kind, with your message.
If he wants to buy his own house, congrats to him, but he can't break his lease with you early. Stick to the terms of the lease.
@Dina Abbott it does seem really petty to get after the guy for trying to improve the property. Here is what I would recommend:
1. Thank him for the work he has done.
2. Let him know you are fine with more improvements being done, but you need to approve anything ahead of time in writing. Explain it is just to make sure the improvements would be acceptable to other future tenants, should he decide to move out. For example, painting the living room pink would not be acceptable.
3. Put something in writing detailing all the improvements he has done that states the improvements stay in the property when he leaves and he will not receive future compensation for said improvements.
4. Going forward, every improvement needs to have a signed form, identifying what compensation if any you will give him for improvements.
I implemented this process because I had a tenant replace some light fixtures and wanted to take them with when he moved out. At the time he replaced them he told me not to worry about the cost. Lesson learned, get it in writing.
But honestly I think you are making a big mistake in how you are treating this good tenant. Tenants who improve the property are the best kind to have. Just keep control without saying no. "Yes you can make that improvement, but I need you to sign this approval form."
Hey After you evict this dirtbag . Give me his number !!! I would be delighted to have a good tenant that pays on time and adds value to my property out of his own pocket lol
I must have missed the sentence that stated these improvements are not good...
Is what he's doing up to code? If not, will you be liable in the future if any damage or harm comes to him or future tenants? If he gets injured while doing work for your benefit and you are "paying" him with rent discounts, are you liable for workman's comp?
Just a few reasons why I don't allow tenants to do any work on the property. Tenants who want to work on property need to become homeowners: then they can try wiring 3-phase electric using aluminum wire they found out in their grandpa's barn to their heart's content.
Oh wow. This is a great point. I didn't even think about this. He hasn't done anything major except the flooring but he has done many small changes that are starting to add up. So far hopefully no code violations but thank you for bringing this up.
Dennis M. Thanks for the reply and sarcasm but i am simply trying to protect myself from future disasters. The house is in great condition with new roof toilets paint hardwood flooring etc. It does not need anything to live comfortably in. My tenant is hyperactive guy who constantly needs a project. He is good and bad at the same time. He can be a hot head and get offended easily and be the kindest and most appreciative person at the same time. Like I said he contradicts himself a lot and let's his words and actions get ahead of himself sometimes. I should have trained him from the start but I let him have the benefit of the doubt...
And his personality that you describe is just another reason why you shouldn't continue to allow him to improve the house nor let future tenants ever do improvements.
While it sounds great and like some sort of freebie, it sets you up for possible trouble. Written agreements or not, you could end up in court at the mercy of a judge's decision of a dispute on something that should have never happened in the first place. This doesn't even include the possibility of court due to him injuring himself while you knowingly let him work on your property.
I found this case report with a simple Google search:
If you're a landlord, all you need to see in this case is that the landlord was ordered to pay a former tenant almost $12,000 for improvements made by the tenant over a 7-year period. The situation is very fact-specific, but if you're looking at the rental property on a risk-reward continuum, do you really want to take the risk of owing a tenant a boatload of money at the end of the lease term? You have no control over the capital improvements or the value that tenant improvements are supposedly adding to the property. Maybe they add $5,000 in value, but then you have to pay $12,000 for that value.
Tenants can change light bulbs in fixtures, but I wouldn't accede to much more than that.
I dont see anything wrong with a tenant making " improvements " to add value to your property. I would however make sure you approve the work and its being done by a licensed contractor ( who can warranty the work) and they sign a "lien waiver". You don't want them to call you to court stating they've invested in your property and you refuse to pay them for their work.
PS: If someone is willing to invest in your property it means they don't want to leave therefore a low vacancy risk to kill your cashflow. If they are good tenants I see no issues.
Improvements made by the tenant may seem great, but in the end of the day you need to realize that your tenant is by default making a poor investment himself and stepping on your toes to boot. There's a mentality problem here that may seem minor on the surface but this is a big red flag in my opinion.
I had a similar type tenant who acted like none of the improvements he had done to the place were a big deal (I inherited this tenant with the property and should have kicked him out in hindsight) until it came down to eviction and a lawsuit. In the end, his game plan was to try and take the property out from under me! In his mind he literally deserved to be the owner.
That to say, give a man an inch and they'll take a yard if they can. Your renter's mindset should concern you and isn't natural for the most part. Watch out!
I agree with what you are saying. Thank you fir sharing your experience.
Sell him the house! Take high value and add 10% and present him the offer. He loves the house, has been making improvements and now says he should just buy one himself.
Sell it to him make top dollar reinvest that money
What John linked is the end of anything in my opinion. This sets precedence for any tenant to claim they expected to remain there and as long as they let the owner know they can sue using that case as a basis. I'm no lawyer so I can't say whether they'll win or not, but my time working with lawyers has taught me that previous cases are worth heeding because they will always be used with our justice system.
I will make improvement requested by good tenants but I charge for the improvements. I do not let tenants do work. Want a dishwasher installed? Okay, that will be $25/month. Closet organizer $5-10. I usually do a 30 month ROI.