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Advice on inherited, rent-controlled tenants demanding upgrades
Hello all, I'm a new landlord and recently purchased a triplex in San Francisco that came with tenants. One couple in the building has been there for 15 years and is paying $1000 below market rate.
After I purchased the building, I asked them what needed to be repaired. The previous owners didn't seem to do much maintenance for their unit, and the husband gave me a two-page list. I hired a handyman to fix everything on the list, no questions asked. After repairs were done, the wife then asked for new windows and new blinds, and I agreed. Now she is asking for the cabinets to be replaced, window sill to be repainted, and new range hood (current one not broken, just old looking).
Because they are protected tenants (almost impossible to evict in SF), they act demanding and entitled. The husband is rude to me on the phone and harasses my contractors who are remodeling a vacant unit in the building because he doesn't like construction noise. The wife emails me several times a day with the tiniest issues.
From a financial standpoint, I know I should do the least possible and hope they leave voluntarily. But I'm conflicted because although I have completed all necessary repairs and habitability is not an issue, their unit does look run-down. Should I keep agreeing to their requests? I would love to hear what more experience landlords would do in my place. Thanks in advance!
@Kristy Fard I don't want this to seem harsh but it is almost like you bought the building for their convenience? It sounds like you have done the necessary repairs that the previous landlord had not performed. Adding in new cabinets and range? I would explain to them that since there is rent control you are not allowed to raise the rent and they are $1000 / month under market. This is a business for profit and not a charity. If they want new cabinets, new oven ,etc., you just happen to have a new unit available that you are rehabbing right now. Oh, the rent is market rate!
I try to accommodate a tenant complaining about noise telling them we can start at 8 instead of 7 if that makes it better for them? You are trying to improve the building and sometimes that is an inconvenience that is necessary. Tell them you have proven to them that you are a LL that takes care of problems and pride of ownership by changing the windows and blinds. However, you have to rehab the unit near theirs so you can get good, quality tenants. They want good neighbors don't they?
If the emails you are getting from her are petty, just ignore them. If the pettiness and complaining about noise continues, I'd buy the repairmen bigger hammers and tell them to start at 6!
"Give an inch, Take a Mile", that is exactly what is going on here. You went above and beyond for them and now they think you can be walked over on. Cabinets being painted is a luxury, new range hood is luxury. They do not have a leg to stand on in court if they ever have the audacity to file a suit because you have fixed and repaired all the necessary itinerary.
In NYC, tenants are protected just as well as tenants in NYC but those fixtures they are asking for are not necessary and cannot bully a landlord into doing cosmetic work
DO NOT DO A SINGLE D**N THING FOR THEM ANYMORE.
Keep doing your construction as you wish. As long as the construction is being done on peek hours where people are mostly at work. You are giving enough courtesy to them that way.
Oh and start blocking their emails. Go there once every 3 months or so just to make find out if any major repairs have to be done. If not, leave them alone and see them another 3 months later.
#2 General Landlording & Rental Properties Contributor
Your first mistake was in asking what they needed done when you took ownership. The previous owner had the right business approach. Less is better.
Too late now unfortunately, you have instantly created a reputation for yourself of being a soft touch landlord. You stated you are conflicted. Too bad since it is a sign that your head is not in this business. No place for emotions, especially compassion. Under rent control you do the bare minimum to maintain the unit in operational condition and no more.
Get tough or get out.
I don't live in a rent controlled area so I will freely admit I am not sure what you can and cannot do. Is a tenant allowed to agree to a higher rent or agree to sign a new lease? If so put it right back on them "You know I agree a new range hood would really help bring that place back up, I can get one installed for an additional $32 a month on the lease, let me know when you want to get that setup". "Your apartment would look great with the new cabinets like I did over here in 2, I can get them installed in yours for an additional $280 a month. It will take about a week where there will be a mess but that would look sharp, think it over and let me know".
Coming from someone who knows the SF rental market very well and who lives in a San Francisco rent controlled unit, I will say that you have already done way more than what is required of you. Unfortunately, this is one of the many problems with rent control. Landlords do the bare minimum to maintain units and tenants either have to suck it up or move to a more updated unit and pay more.
You most likely weren't required to do any of the repairs you already completed for them and, as others have mentioned, you have given an inch and they are taking a mile. I would stop granting any requests for updates and tell them in a professional, yet frank, way that if they would like to live in a more updated unit they can move to one and pay market rate.
Check this out for more information: http://sfrb.org/landlord-tenant-information
Kristy Fard , First of all, I promise that I will not blame you for your situation - it is not your fault for being human and expecting fairness from others. And I know that you will learn some lessons from this situation.
However, the commenters above are generally correct in their assessment of the situation.
I’ve been “soft” with tenants also. But when I give them “an inch,” in my case it’s of a rope. Some of them “hang” themselves with it; but those are very few. I still believe that there are ethical tenants.
You need to get out of your predicament now. These tenants are not going anywhere, and you cannot just block their emails from getting through to you - there may be an emergency situation. There is a potential for being able to evict them for nuisance/harassment - if you can clearly show this (even under the SF laws) - but that’s a very thin chance; you’ll likely be paying lots of money for your attorney, while they may get free/very cheap legal advice.
I don’t know you, but am sensing that you won’t be able to “switch” yourself in your approach with these tenants in a meaningful way. In my opinion, you need to remove yourself from the situation, ASAP - you should hire a property manager, one with lots of SF rent control experience. During the interview process, disclose the whole situation and ask them how they would proceed. Again, I don’t think that these tenants are going anywhere, and the sooner you have someone start saying “no” to them with unequivocal authority tone, the better for you. If hiring a PM should not be appropriate for you, I suggest you at least speak with a local attorney about any unfulfilled promises you have made to the tenants to date - you don’t want them dragging you into any litigation just because they could. You’ll still need to draw the line in the sand somehow.
Basically what everyone else says.
Keep this simple. Tell them directly NO TO THE ADDITIONAL REQUESTS.
They can complain all they want, just ignore BS emails. Eventually they will get the picture. If they try going to the rent board for rent reduction, noise complaints, etc. I doubt they will get anywhere.
Just don’t do anything retaliatory. Keep the construction work during normal business hours. Let them know in advance if you have to shut off water, gas, etc.
That’s it. But yes, you made a huge mistake in 1- asking what needed repairs (never ask tenants that in an open ended way!) and 2- agreeing to anything cosmetic. Old cabinets stay, no new windows (unless they really are damaged significantly), new blinds would be on them, etc, etc, etc.
Don’t cave in! But also be fair and consistent and NOT retaliatory.
* keep us posted on how this evolves!
You may have went too far in your repairs but now you need to get ahead of the curve with the tenants. But I would do it to make yourself look good instead.
Let them know that you have far exceeded your rehab budget on the items that have already been done. And that you feel you've done far more than any other landlord would do if they were in the same situation.
Tell them right now, there is just no margin on their unit for any more additional cosmetic improvements given how low the rent is. And that you now need to focus on rebuilding the reserves so that any critical repairs (like leaky faucets, hvac, etc) can be made in the future.
Typically, when you point out the business side from your perspective and explain to them what you've already done even though it wasn't needed, most tenants are going to be understanding.
If they continue to send you frivolous repair requests, send them an email back saying thats not a critical need and there simply is no budget available at this time for any non-essential repairs. They'll catch on quick and eventually, will stop bothering you.
At the end of the day, you've done more than whats reasonable. Now its time to rebuild your reserves. In the long run, thats better for tenants anyway. They're going to be thankful when their AC goes out and you get it fixed lickety split because you would have saved up for that.
Thank you everyone for all the advice. I went ahead and told them that we are only doing repairs for habitability and upgrades are not within our budget currently. They responded with a list of more repairs. I booked the handyman for another day to do this. When he is done, I will have them sign a form of what's been completed and that everything is functional.
So yesterday, the garage door on the ground floor wouldn't close (the garage is not part of their unit/lease/has nothing to do with them, they are on the 3rd floor). My contractors is keeping lots of equipment there and had to find a garage guy to install a new opener asap. Unfortunately, the garage guy came to do the work at 11 pm and finished at midnight. I don't think they were being excessively disruptive because the other tenants didn't mention anything. But this couple called the police!
I'm contacting a lawyer now to be precautionary. Anything else I should do?
In this instance, I would hire a property manager and let them deal with the tenants
There is something else you can do, but you must be careful in how you go about doing it: If you have a good relationship with the other tenants, carefully (not obviously) ask them about their experience with the tenant of concern. Depending on the answers, you may be able to build a nuisance case - in the end, it’s not about what may annoy you; it’s about the comfort and enjoyment of the property that the other tenants have. You can speak with the lawyer about this, as well.
And I would limit your last name to just show the initial to the public - this site is indexed. Your tenants seem to have a lot of downtime. If they get bored, they may accidentally google something like this conversation that will certainly be taken out of context.
Definitely call a tenant lawyer like Dan Bornstein or someone similar for guidance.
You've gotten a lot of sage advice already, so I don't have anything to add right now. I am curious though how have the tenant been there for 15 years and are only 1k below market rent?
You just don’t seem to be landlord material to me..Lol
For those who may not remember, today is MLK Day. “Life’s most persistent and urgent question is, “What are you doing for others?” -MLK, Jr. I was not planning to do anything for anyone but myself when I woke up today.
But I must ask: What exactly is there to LOL about here, @Diane G.?
I, for one, cannot see your comment being in any way helpful to this discussion. In fact, to me, your words seem condescending to the OP. You must know her personally, I guess.
I probably was not “landlord material” either when I first started in this business. No one told me that, though - besides myself. I dare anyone to tell me that now; I’ll LOL at them. I had no mentors when I first started. I did not inherit anything. I jumped in. I had fears. And because of my professional background, I knew they were real. I’ve since mentored others on this “mental obstacle.” It’s real for many. But one doesn’t have to be born a landlord.
@Kristy F., “Turn your wounds into wisdom.” -Oprah Winfrey.
@Al D. - learn to take a joke as a joke...
My apologies, Diane G. , for appearing to not get your joke. Thank you for pointing out that issue in me. But please learn to read critically: I asked you what exactly there was to LOL about. That should suggest to you that I at least understood that your comment was intended as a joke - if only to yourself.
If I were the OP, I would have found your (joking) comment condescending - and certainly not helpful. But I am not the OP. Perhaps the OP actually appreciates your comment. I spoke for myself. And then you answered (me) in another condescending way. I can take it - just clarifying for you how your retort looks to me.
I don’t know how many of your over 900 comments are jokes, facts, or in any way useful to the topic at hand. Perhaps you’ve helped some people here with incredible advice - I have no idea. I simply did not find your original comment in this post anything but a condescending joke - I hope this part is now clear to you. And considering that the OP (clearly, for anyone with a conscience) needed support, I decided to provide it, again, now “thanks” to you.
I love this forum. I am at a point where I seem to put in more than I get from it. And I am ok with that. I am still learning something. I did not know about BP for years after becoming an investor. Sometimes I - with my experience - will still need advice from others here. I expect that when I ask for it, I won’t be laughed at. None of us knows what’s really, fully behind the name and the story when a poster asks for help. Let’s try to be part of a solution, please.
joke
was
lame
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I will rephrase the joke. You sound like a sweetheart and to be a landlord you really have to be a hardass. Lol because I have learned to be a hardass but would prefer to be sweetheart, so I sympathize.
And that is the jist of posts. It is a business. Do not lose more money on rent controlled units than is required by law or needed to preserve the asset. Choose your charities...I like doctors w/o borders.6
@David L. $1000 below market rate is a conservative estimate and because the unit looks old and not taken care of. If remodeled, I would say I could get $1500-2000 more.
Thanks everyone for all the helpful advice. Biggerpockets is now my favorite forum! I have sent the tenants a few nice but firm emails that seemed to have worked. Also talked to a lawyer today and got lots of tips.