Upgrades by tenant?

Question

Tenant wants to upgrade kitchen countertops to granite at own expense. In general what is everyone's angle on pitfalls and cautions of tenet-initiated property renovation?

Michael Seeker · Answer

If one of my tenants asked for this, I would take the following steps:

-Require they deposit money into an escrow account and sign something stating that granite counters are part of the apartment and tenant has no right to them when they leave

-Require that you, the Landlord, handles the transaction and require that both you and the tenant agree on style of granite, including edge shapes, backsplash etc. If no agreement can be reached, funds go back to the tenant and no changes are made.  If an agreement is made, you hire the contractor and pay them out of the escrowed funds.

I'd love to have tenants pay to upgrade an apartment for me, but as somebody else mentioned, once they realize the cost is probably close to the down payment on a house and that you are the one making decisions, they will probably shy away from the idea.

Kia E. · Answer

Thanks everyone for the input. I'm thinking it's best not to engage in such activity. Certainly the risks outweigh the benefits... I think we can all live with non-granite countertops!

John Rooster · Answer

Without specifics (monthly rent, how strong a tenant they are), this sounds crazy. Most likely result is that the tenant will find out that the $20/sqft price they saw advertised is just a teaser and that the install will cost 4 times what they thought it would. Worst case scenario is that the tenant hires their friend in the the granite install business, enters into an inflated $7,000 contract to install granite, the installer installs cheap scrap pieces of granite, the tenant does not pay and the installer puts a $7,000 mechanics lien on your house, and you have no recourse against tenants since they do not have normal jobs and are deadbeats.

Mike Franco · Answer

That would be my only concern, and I would consult an attorney about it.

If all is well, I would have the tenant sign an agreement stating that landlord is not responsible for cost of upgrade, nor will reimbursement be given in any form. Verbally remind tenant that any future delinquent payments will not be shown leniency.

In california, we have a thing called a Notice of Nonresponsibility, where if a tenant orders upgrades and doesn't pay for them, filing a notice of nonresponsibility would protect the landlord against MECHANICS LIENS. You file it at the county recorder's office, and post a notice at the rental dwelling.
I don't know if PA has something similar.

So basically, your biggest fear is a legal one, but you can protect yourself.

Granite is very hard to mess up. I would not worry about workmanship. It's a rectangular slab that fits on top of rectangular cabinets. You really can't mess it up.

Granite is also custom fit, so it becomes a fixture. I think most states  agree that tenants can't take the granite with them when they move out.
Besides, how are they going to restore the old countertop ?

Jon K. · Answer

Possible pitfalls?

- Tenant's contractor does a bad job. 
- Tenant's contractor gets injured somehow.
- Tenant gets mad when they're read to move out and wants to take the granite countertops with them. 
- Tenant tries to use this as a "well, we gave you granite" excuse later if they are late on rent, don't pay, or cause property damage. 
- Perhaps some concerns about tenants putting money into the property and somehow getting some vested interest in the property.

I would say that the contractor doing a bad job is the most likely.

I've head of tenants doing some upgrades and it going well. Sometimes they end up trying to ask you to pay for the upgrades (stainless steel appliances, or whatever they bought later on). I would be tempted to talk to the contractor, your lawyer, and consider it. Maybe a free upgrade is too good to be true, but I would look into it. If all went well with no concerns, that would be a bonus.

Andrea M. · Answer

I would have to speak with the contractor (check references and license) who will be doing the install to ensure that it will be installed properly as well as check into local laws regarding the upgrade, does it  automatically become part of the property or  when the tenant leaves will they want to remove the granite countertops because they paid for it.