Renovating with Tenant

5 Replies

I just closed on my first 2-unit property out of state, and the sale triggered an inspection from the County Health Department. The inspection found several issues that will require a relatively large rehab that we were not planning on completing until the tenant moves out. (These issues were not found by my pre-closing home inspection, or the contractor I had inspect and quote for light rehab but that is another issue.) The County has given me 2 weeks to complete the repairs, or I will face a large fine. One side is vacant, the other has a tenant. I would like to go to the property and do most of the work myself in a few days to avoid high labor costs, but am not sure what to do with the tenant. 

My question is: What would you suggest I do with the tenant? Ideally I would like to offer to put her in a hotel for a few days while the work is being done, but I'm not sure if this is customary.

I'd love to hear your thoughts/experiences/advice with similar situations. Thanks.

Hi @Jenna Harris , thanks for sharing your situation!

First, I've gotta say this: You need to fire your ground team! Your inspector and contractor failed you miserably and should somehow be held accountable for the oversight. Frankly, if they are not scrambling like crazy to help you fix this, that's further proof that they need to get the boot.

Since money talks loudest for many, I'd make two offers to the tenant:

  1. "I'll pay you $XXX cash to move out early!"
  2. "I'll pay you $YY cash towards <insert-local-inexpensive-motel-here> for the duration of the renovation!"

Whichever way you go, get it in writing and signed before disbursing the funds. Get help from a friendly attorney. The document shouldn't be more than two or three paragraphs, tops.

Lastly, please, please, consider not doing the repairs yourself! I'm pretty sure that's not the highest and best use of your talents.

Originally posted by @Mitch Messer :

Hi @Jenna Harris, thanks for sharing your situation!

First, I've gotta say this: You need to fire your ground team! Your inspector and contractor failed you miserably and should somehow be held accountable for the oversight. Frankly, if they are not scrambling like crazy to help you fix this, that's further proof that they need to get the boot.

Since money talks loudest for many, I'd make two offers to the tenant:

  1. "I'll pay you $XXX cash to move out early!"
  2. "I'll pay you $YY cash towards <insert-local-inexpensive-motel-here> for the duration of the renovation!"

Whichever way you go, get it in writing and signed before disbursing the funds. Get help from a friendly attorney. The document shouldn't be more than two or three paragraphs, tops.

Lastly, please, please, consider not doing the repairs yourself! I'm pretty sure that's not the highest and best use of your talents.

 Thanks Mitch - I appreciate the advice!

I agree that your inspectors should be held accountable.

I would talk to the tenant first before offering any compensation. You may get lucky and find they are willing to sleep on a friend's couch or let you work around them. If not, then you can offer some money to compensate them for the trouble or put them up in a hotel.

Originally posted by @Nkem Nwogbo :

Hi @Jenna Harris 

I may find myself in a similar situation and wanted to know how this turned out for you? Would you feel comfortable sharing ?

Thanks!

Hi Nkem, the tenant ended up vacating. We gave her the deposit back and didn't charge anything to break the lease. It was an 8 month ordeal dealing with the County, but the property is cash flowing well now. Best of luck!