Legality of Adding Heat to Attic to Turn Into Livable Room

[Mauricio A.]

Hello, 

So I have a 3 bedroom, 1.5 bathroom property that when I purchased, I inherited tenants that were using the attic as a fourth bedroom.  The city says that the room is not up to fire code to use as a bedroom and the tenants were made aware of this.  Despite this, the tenants are now asking for an electric line to be ran to the attic so that they can properly use the heat (in the winter) and cool (in the summer) because the current line is tripping the breaker.  I have several questions: 

Could I run myself into potential trouble if I hire a licensed electrician to run a line and install baseboard heating?  

I'm willing to do so but have been stalling to make sure I run into a liability issue where (worst case scenario, the tenants start a fire and insurance doesn't want to cover for damages because the attic was not supposed to be "converted" into a bedroom by adding a dedicated electrical line for heating and AC). 

Another question is, the tenant was due for lease renawal and an increase in rent but has refused to pay the increase since the electric line has not yet been installed.  Could the tenant legally do this?  The tenant didn't even give notice that they would withwold payment of the increased rent.

Thank you!