Question: I’ve noticed over the months some of the stories in your magazine of disastrous tenants, but I’ve got something of the opposite problem. I worry if my tenant is perhaps a little too good.
He and his wife have been staying in the property for just over a year now and have kept the place in immaculate condition. They pay on time and have never kicked up a fuss over anything.
On her inspections to the property, my property manager has noticed that they’ve also installed new lighting fittings across the house and have improved the kitchen cupboards. They’ve repainted rooms (the same colour) and shampooed the carpets – all out of their own pocket and without permission.
Now I’m curious what will happen if they one day want to leave. Can they claim back any of these unauthorized “enhancements”? The lease does state that they have to get permission to make any changes.
Also, what should I do if they want to make more changes down the line? This does seem rather convenient for me that they’re improving the value of the property.
Answer: It’s great that you have a good tenant.
As with many things in life, we hear only about the problems. Sometimes this can leave the impression that owning an investment property is difficult. RUN manages $10bn worth of investment property and most landlords also have good tenants. It is only a small minority that have any great issues.
For your situation, communication will be the key. It’s fantastic that your tenants are obviously willing to do the right thing, but they need to know what that is and the proper process. In this case, the tenant needs to be informed that if they wish to make any changes to the property they need to discuss this with the property manager. They need to put their plans in writing so that you can consider them before any changes are made.
Done this way, you would then be able to reply, in writing, with your position and any conditions that may apply as part of your approval. It is really important that this occurs so that everyone understands exactly what is agreed.
Sometimes a dispute can happen years after improvement works have been done and documentation clearly outlining what was agreed upon becomes extremely important. A tenant may be liable to restore the property to its previous condition at their own cost if they do not seek written approval.
The need for house keeping
As a landlord, it is important to monitor these types of issues carefully. For example, if a tenant paints a property or conducts a repair that is not of a professional standard it can be expensive to rectify. It is for this reason that an experienced property manager or tradesperson should inspect the works to ensure they have been done correctly.
I would also recommend that you get your property manager to ask the tenants what else they would like to do to the property. This could open the door to renovations which could end up benefitting both you and the tenants. If these improvements help the tenant feel more attached to the property it could lead to them becoming long-term tenants. This of course will be a major bonus for you.
- Answer provided by Rob Farmer, CEO Run Property
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