Landlord Dilemma: What Happens When Your Tenant Decides to Remodel?

When tenants live in a rental home for a long time, they often develop an attachment. While you want renters to feel at home, there is a line they can cross. As a property manager or real estate investor, you may contemplate, “What happens when your tenant decides to remodel?” In most cases, the answer is that tenants aren’t allowed to remodel or make repairs. Instead, a professionals hired by the property manager take care of all repairs and maintenance as well as remodeling. However, you might allow some remodeling if you believe the tenant’s remodeling will not negatively impact the property value. Make sure to outline your concerns in the lease agreement.

Seeking approval

Make sure tenants always know they can’t make any changes to the physical structure of the rental home or condo. They can’t remove walls, add fireplaces, remove appliances, expand the closet into the master bathroom or take down shelving. When it comes to painting, you could agree to changes when your tenant seeks approval. Some tenants feel the property is their own property because they pay the rent, clean and live there. Asking or permission after the fact is not acceptable.

Getting a court order

In some cases, a tenant changes a rental home to the point where you have to take them to court. When you get to court, a judge often refers to the lease agreement. That’s why it’s so important to address the issue of tenants remodeling or renovating. Your goal is to get a judge to force a tenant to undo changes or to pay to have a professional change it back to the previous condition. Unapproved renovations often detract from the rental property’s value. While no one wants to go to court to settle disputes between tenants and landlords, it’s important to protect the asset as a professional.

Inspecting the property

If you don’t inspect the rental property on a regular basis, you might not know what your tenants are up to in terms of “improvements.” You can encourage tenants to make their space more personal with artwork, décor items, rugs, shower curtains, flowers in vases, drapes and table clothes. Set an appointment instead of randomly showing up. A good property manager respects a tenant’s privacy rights while still remaining hands-on. Some steps to take include keeping a record of inspections including dates, noting any changes to the property, giving renters notice about corrections needed as well as following up to make sure they make the changes.

Another important step to remember is inspecting the property thoroughly before the tenant moves in. A move-in and move-out checklist signed by the tenant keeps everyone on the same page about what already existed in the rental home. Also, it’s a good idea to take photographs or video of the unit before a tenant moves in. If the tenant painted the rental home blue and green but you have photographs of the white walls, you have evidence of the unauthorized improvements. At the same time, if the changes they made don’t negatively impact the market rent, you could easily overlook the minor changes.

Although it’s best to prevent tenants from making major changes, you could allow reliable and responsible tenants to make minor changes such as changing out hardware on cabinetry, adding a lighting fixture or painting a room. Just make sure you see the samples. Just be cautious since it could lead to problems.

At The Landlord Property Management Academy, we provide coaching and training for property managers. For more information on what happens when a tenant decides to remodel, please contact us.

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