All Forum Posts by: Hector Hernandez

Mary, they've had access to a functional bathroom the entire time. The bathroom in the ADU is actually larger and nicer since everything in the unit is brand new. Would you still credit them? Thanks for the feedback.

I understand that much, but you didn't say what you would do. You're saying I've disrupted their home and the ADU has zero to do with it, but they're the ones that requested I make those accommodations in the first place. Should revoke that access then, have them vacate the unit and adhere strictly to the lease thereby offering rent reduction but no further accommodation that isn't in the lease? This is the only logical conclusion I can draw from your line of reasoning, but if I'm misunderstanding you please clarify.

Theresa, that's correct. The bathroom in the main house is mostly not usable because the shower area was demolished. The toilet and faucet still work, but most of the bathroom and adjacent bedroom's drywall and insulation had to be stripped out due to the water damage. As a result they requested and I made available to them the ADU. They decided after the fact that this was not enough and are now requesting a rent reduction on top of the accommodations.

Thanks for your feedback, I do not plan on renewing their lease and will be glad to move on  from this ordeal. 

 Russell, 

Thanks for your feedback but you didn't address a key component of my story which was that I'm providing an ADU that is larger than the effected square footage of the main home. Would you still provide rent reduction in addition to that?

The project has been going on for 3 weeks now, and I've done my due diligence to make sure it gets done ASAP. If they only had the main home to live in, I of course would offer rent reduction or outright abatement for the major inconvenience. The dilemma is whether they're justified in insisting on accommodations AND rent reduction. 

Here's their stance (and I quote) "The reality of the situation is you would have been in a way worse spot if you were living in the studio (ADU) and this happened because then you would have been obligated to pay for our place to stay on top of missing out on rent" 

How would you remedy the situation?

Thanks for the feedback Dan. I've certainly learned my lesson and will apply some of the wisdom you provided in the future. 

What would you do if you were in my shoes? My thinking is to issue them a written statement that says that them staying in the ADU is an accommodation in lieu of rent abatement. If they insist the accommodations are inadequate, they will have to provide a written request for rent abatement and vacate the unit immediately. Basically drawing a line in the sand and say they can have one or the other, but not both.

Do they have grounds for terminating the lease? Or would this only apply subsequently if I refused to provide rent abatement and didn't otherwise accommodate their living situation?

Thanks again for the feedback. 

I appreciate your feedback Joe! Being a young first-time landlord, I realize in hindsight that I did make a few mistakes in dealing with this. You're right, I was trying to be a 'good guy' by offering difference accommodations and such. My thinking was that they'd been mostly good tenants up to this point, but I realize now as you said that that opened the door for them to try to take advantage of my good nature, which is exactly what it feels like is happening. 

To clarify on your second point though, their lease is not up just yet. We're about to start month 11 of a 12 month lease, so technically they still have another 2 months. I wanted to raise rents anyways because of all the money I've put into the home, so I think I'm just going to use this opportunity to not renew the lease and have a 'clean slate' with new, hopefully better, tenants. 

I'm a relatively new landlord and am nearing the end of my first 12-month lease with my current tenants. The property is a 2/1 with me occupying a 300sqft ADU on the same lot. Recently we had some major water damage due to leaking and busted pipes that involved extensive demo of the bathroom and adjacent wall of one bedroom because of mold/water damage. I'm in the military and have been away from the property for several months on deployment, using the ADU as a short-term rental in the meantime. When I learned about the extent of the project I apologized for the inconvenience and told them I'd clear my bookings so they could use my ADU for whatever purposes they saw fit.

They accepted and seemed understanding at first, but the relationship quickly soured. They began insisting that they were entitled to rent reduction or outright abatement since part of the space they technically signed the lease for was uninhabitable. But it's obvious to me from our conversations that they continue to use both the main house as well as my ADU, and the square footage effected is less than the amount I'm giving them access to. Now in addition to an expensive bathroom rehab and loss of short term rental income, they're insisting they also deserve a rent discount for the duration of the project. Again, I've acted as quickly as I could in dealing with insurance, restoration company, and contractors to get this all done. Still, they insist that me granting them access to the ADU isn't a factor, since that's nowhere mentioned on the lease, instead they point to a clause saying that if there are repairs to a part of the home that's uninhabitable, they're entitled to rent abatement.

From my perspective, granting them access to an equal or better space should have negated this part of the contract. Either that or I should be allowed to keep renting out my ADU if they really want to assert their right to rent abatement, but it seems they're trying to have it both ways. I've also continued paying 1/3 of the utilities for the last several months I've been away, even though the ADU has been mostly vacant in that time. I mentioned this fact to them, that I had been basically subsidizing their utilities while away, and again they insisted that it didn't matter and that wasn't a factor since it's what we'd agreed to in the lease- irrespective of whether anyone was occupying the unit. Again, I've no issue upholding my part of the contract on this, but the fact that they refuse to even consider that financial burden on me seems unfair if they're also asking for a break on rent.

In sum, I'm not sure what the right thing to do is in this situation. They've been mostly good tenants up until now, and there's only another 2 months left in the contract. But this whole experience with these renovations has been a nightmare with me having to answer constant calls and texts from them during my work hours, it just seems like it's not worth the trouble anymore and I know at the very least I won't be renewing their contract. Right now I've basically told them if they really feel like I'm breaching the contract, then they can terminate the lease early and move out before their 12 months are over and pay a pro-rated rent. 

Any advice as to how to approach this tricky situation would be greatly appreciated. 

Hey Jesse,

Great question! My experience is- no, no one will be paying you a visit at strange hours of the night because you don't occupy the main home on the property. Owner occupied just means you live somewhere on the premise of a single or even multi-family home. For example, someone that has a four-plex and lives in one of the units is still considered an 'owner-occupied' property, and as such you have certain additional rights because of that being your primary residence and not solely an investment property. 

I have some experience with this. I purchased a 2bed/1bath home with a large workshop/office that I turned into an additional 'studio'-type of unit. I live in the unit and rent out my main home. 

Greetings everyone! 

I'm Hector Hernandez, a brand new investor in Tacoma, Wa and am also new to the state of Washington. As a recent college graduate, I've been educating myself as much as possible in the field of real estate investing. Having studied economics, I've found this to be an exciting field that fits my interests and goals extremely well. 

My desire is to work in real estate full time and am currently looking into acquiring my license. Additionally, I plan on investing using a multifamily-buy-and-hold strategy as soon as possible. While I'm currently staying with my brother in Lynnwood, Wa, I've gathered from BP forums and other research that the Seattle area is currently too hot and overpriced for me to invest in given the approach I'm using. I am therefore currently looking into acquiring a small multifamily in Tacoma, which I would ideally house-hack for my first investment. 

I'm looking forward to continuing my education and beginning my path on this exciting new venture. I definitely welcome any advice and will certainly do my best to engage on the BP forums as they've proven an invaluable source so far.

Cheers,

Hector