The Property Management Shop
by Marc Wilson
Q. I have a very fussy tenant who wants me to take down the unit’s neutral drapes and shades and put up levelors instead. The tenant also wants an additional outlet in the dining area. What are the rules about these extra amenities? If I do this, whose responsibility is it to store the drapes and buy the new levelors?
A. There are two kinds of requests for alterations and improvements in this world: those made by prospective tenants and those made by existing tenants. You didn’t stipulate in your letter which request you have received, so I will assume that we are talking about an existing tenant in possession. As in most cases, there are “the rules” and then there is “the practical reality.” The rules are easy. Among other things, Section 20 (Alterations) within your PPMA Residential Tenancy Agreement clearly states that the “tenant shall not remodel, renovate, paint, refinish floors, or otherwise alter the premise…[and] upon termination of tenancy, owner shall have the option, at owners’ sole discretion, to require tenant to restore the premises to original condition as received.” What a great clause. My compliments to the architects of Section 20—it is simple and to the point.
I, too, am frequently the recipient of tenants’ requests for material alterations to their units. “May I change the window dressing?” Or “May I paint the kitchen a different color?” Or “May I install shelves in the bedroom closet?” My answer is always the same: I tell the tenant that I want her to be happy. I also tell the tenant that I’m not going to take any particular interest in the interior of the apartment until such time as she vacates. The tenant needs to understand that when she vacates I will expect the apartment to look rather similar to the way it looked when she took possession. From a practical standpoint, this means that the tenant can make any improvements she desires; she just needs to do so with an eye toward returning the apartment to its original state when she vacates. Obviously, this means that the tenant is responsible for storing the original window shades, repainting the apartment and any other related tasks. Don’t get directly involved in your tenant’s decorating schemes; it is a huge waste of your time and, remember, no good deed goes unpunished.
Additional outlets are a different matter. I always grant a tenant’s request for an additional outlet for a number of reasons. Electrical outlets are permanent improvements that add value to the apartment. Absolutely all future occupants will benefit, and therefore you will benefit, from adequate electrical outlets. Besides, what do you think will happen if you don’t install the outlet? I have a pretty good idea what will happen: the apartment will soon become a dangerous maze of extension cords. You should have a standing policy to install sufficient outlets in all of your vacant units. Take this opportunity to remove the old gas pilot-light stove by installing an additional outlet behind the stove to accommodate the new stove’s electronic pilot.
What about alteration and improvement requests from prospective tenants? There are those who will say they will rent your apartment if you install new carpet, buy a new refrigerator or paint the bathroom. In most cases, I will agree to prospective tenants’ requests for improvements. I actually feel guilty when they have to ask, because I should have realized the need for the improvement when I took possession of the apartment. I won’t agree to paint a bathroom just to change the color, but I will paint the bathroom if the existing paint is “tired.” The easiest way to consummate the transaction is to stipulate to the alteration within the signed rental agreement. For example, “Owner agrees to replace the stove within 14 days of tenant taking possession of the apartment.” This way you’re not running around beautifying the apartment when you don’t even know if the unit is rented. Tenant requests for purely aesthetic or taste-orientated alterations should be denied. You can spend the rest of your life trying to satisfy every whim. Just make sure that the apartment is in perfect condition and that the asking rent is appropriate. If you do these two simple things, you will have no problem renting the apartment.
The rental market is particularly strong today. I’ve noticed a 10% spike in rents in the past two months. Increased local hiring and a seriously diminished tolerance for commuting appear to be pushing rents. It will be interesting to see how this development interacts with steadily rising interest rates. I don’t try to predict the future anymore: I’m just no good at it. I guess even a broken clock is right twice a day. Interestingly, I’ve noticed that market rents decreased by 25% from 2000 to 2003 and apartment values increased by 25% in that time. In a fair fight, I would put my money on interest rates.
The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of SFAA or the San Francisco Apartment Magazine. Marc Wilson is the president of SFAA and has specialized in the brokerage of San Francisco apartment buildings for 20 years. He can be reached at 415-229-1275. Copyright © 2006 by the San Francisco Apartment Magazine. All rights reserved.