unfinished space legal ?

Question

Hello Everyone. I have a luxury unit that is currently being renovated. It still needs paint, carpet, new toilets, attic insulation, new upstairs heat pump, and the downstairs still needs to be cleaned and painted. The previous tenants were inside smokers and vacated the place leaving it trashed.

When fixing a different AC unit, my AC repair man noticed the luxury unit and has stated that he would like to move into the unfinished unit because he's getting separated from his current wife.

He has discussed working on completing the unit within 60 days, with quality work up to my standards and guidelines. He would pay a security deposit and pet deposit, but receive a sizeable discount off rent as long as he shows improvement and receipts until the renovations are complete. All details would ofcourse be in a contract.

Pro's - I secure a tenant now as opposed to later

- I work on rehab less

Cons - I would have to trust his work, or micromanage repairs

- He is a very busy individual, with loud work trucks and a lot of equipment to disturb surrounding tenants

As tempting as this sounds, is it even legal to rent an unfinished space?

If it is in fact legal, is this something anyone would recommend?

Matthew Kreitzer · Answer

Whether or not you may rent such a space depends almost entirely on your local municipal regulations and ordinances, and no one other than a very local attorney intimately familiar with this area of practice can answer that question.If it is legal in your local area; it may be a good idea from a *business* perspective. I see this happen all the time in my local area; have a tradesman improve equity by renting out the unit.

Account Closed · Answer

What exactly do you expect to gain from this? If he does work for you, you will either have to pay him for labor or give him rent credit. You also have to pay for all the materials or give him rent credit for them. How are you saving money vs just finishing the unit and renting it out then? Do you expect him to give you free materials and labor? If you are not paying full price you can be guaranteed corners will be cut, I don't care what your contract says.You're asking for a world of trouble you can't yet understand...

Account Closed · Answer

I strongly recommend from experience you NOT do this. 1. It's not his house, he won't care about it, even if he says he does. The repairs will be cheap and shoddy. 2. He will fix it up to his standards, not yours.3. You will argue about what the standards are.4. You will have to sue him after he moves out or gets evicted leaving the place unfinished.5. What if he hurts himself while fixing your house? Is he properly insured, etc, the same as any other contractor?6. Noisy people with big trucks do not belong in "luxury units". (Yes, I am one of those people)

William Donnelly · Answer

I ended up stopping this deal. I decided that it wasn't worth the hassle. I'd have to micro manage and keep an extremely close eye on any work that was being done. The only benefit for my side of this deal would be the potential gain of an immediate tenant. However, with this luxury unit, I won't have a problem finding a great tenant in a short time period.

Marcia Maynard · Answer

1. The unit must be habitable before you let anyone live in it, let alone rent it.2. Screen this tenant that same as you would any prospective renter.3. Use a binding rental agreement for all tenants that states a clearly defined amount of rent and when it is due. For this type of situation, make it a month-to-month rental agreement. 4. Do not exchange work in lieu of paying rent (all or part). If the unit is not yet finished, but still habitable, rent it month-to-month at a lower rate. Pay this worker or any worker fairly for the work that is done to the property, according to what you have agreed to in writing. All work should be done in a safe manner and done in accordance to what is standard for the industry.5. Raise the rent later, after the unit is ready to market. The tenant/worker can then choose to pay the higher rent or vacate.6. Everything is negotiable. Keep it a win-win. :-)

William Donnelly · Answer

Jem J. · Answer

Usually, a marital problem creates horrible credit history, not to mention alimony if there is any, lawyer's fee and anxiety deluxe. Also, you might need a certificate of occupancy to be able to rent out to a paying "tenant".As a landlord, you also have a duty to make sure your dwelling is safe. Him coming in in those terms can invite a big headache for your livelihood. Best of luck.

Jem J. · Answer

Usually, a marital problem creates horrible credit history, not to mention alimony if there is any, lawyer's fee and anxiety deluxe. Also, you might need a certificate of occupancy to be able to rent out to a paying "tenant".As a landlord, you also have a duty to make sure your dwelling is safe. Him coming in in those terms can invite a big headache for your livelihood. Best of luck.