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Updated over 4 years ago, 04/17/2020
Tenants using inhabitable rooms as bedrooms
There is a property I'm looking at that has (on paper) 4 bedrooms, 3 baths. There is a spacious 5th room in the finished attic that is not considered habitable because it's under the 7 ft. ceiling height. Looking up rental permit searches, I see past tenants using it as a 5th bedroom has been an issue twice on the previous owners' inspection reports. They've been warned that should it be an issue again, they will make the owners remove the door and frame to the area and create a cased opening. It bothers me that there is so much "wasted potential" in that finished attic space. I'll be house hacking the first year and can manage the property. Once I'm out, I can see future tenants using the room as a 5th bedroom despite lease conditions. Will this property cause me headaches later on? While fees would be paid by the tenants, I'm concerned that this is basis for a reduced term rental permit and impact my ability to renew permits. What would you do?
@Sharon Ho
Can you just put a door up with a lock on it. Put this space is not available for use at all in your lease. We did that with a shed on one of our properties. The cement floor was upheaved when we bought it there is a garage with plenty of storage so we just locked the shed and excluded it’s use from the lease. A little different being in the house but it would stop you from jeopardizing your rental certificate.
I'm in the middle of the same situation and in my case decided to raise the ceiling in order to comply...Few thoughts:
- The first thing I will do in your case is check which building/maintenance code your municipality use. Go to the building/permit department and see what they think you need to do to get the room to comply. The public library will most likely have copies of the code the municipality use (just verify they are current).
- Based on the code info you can develop the SOW and start bidding it to contractors to get your estimate. In my particular case raising the ceiling about 15 inches, removing chimney, installing new insulation and adding an Egress compliant window came to 9K.
- Then, the most important thing is to determine if it worth it. Are you planning on renting the house by the room to multiple tenants or to a single occupant? In the case of renting by the room, it can definitely be worth it since every extra room is net profit.
- There are few formulas around for return on renovation. In my case where I plan to rent by the room to students, I calculated that the renovation should cover itself in about 18-24 months. This obviously depends on the extra rent you can get with extra room. In the case of a single-occupant renting the whole house, the difference might not be worth the hassle.
Again, I'm not sure what code is applicable in your situation but in my situation, it was 1/3 of the minimum required floor area for a bedroom (70 SF in my municipality in PA) had to have at least 7' high ceiling. This might be much less then the 30% of floor area other people mentioned so it is critical to check what applies in your municipality. Other requirements was that the room have to have an Egress compliant window and ceiling need to be insulated which you want in any case since those attics can get really hot.
The code official in my town btw thought it have to be 50% of the floor area which wouldn't have been possible but changed his mind once I showed a copy of the code proofing it have to be only 1/3 of 70SF so best thing is to find the written proof of the requirement.
Hope that's help.
Feel free to DM if you have more questions.
THANK YOU all so much for your advice and tips! Not sure why this isn't letting me tag any of you, but just wanted to say a big thank you for taking the time to write out your thoughts!!
Originally posted by @Lawrence Henkel III:
@Sharon Ho
Can you just put a door up with a lock on it. Put this space is not available for use at all in your lease. We did that with a shed on one of our properties. The cement floor was upheaved when we bought it there is a garage with plenty of storage so we just locked the shed and excluded it’s use from the lease. A little different being in the house but it would stop you from jeopardizing your rental certificate.
The door actually has a lock on it already since someone had previously used it as a bedroom! But I like this idea too - keep it simple and off limits. (But the potential! lol) This method does sound easy and stress-free!
Originally posted by @Robert Barrett:
@Sharon Ho
The previous owners finished the room as if it was a bedroom or at least as close as they could Based on the picture. Did they build a closet in that space?
YUP, there's a sizable closet with racks built into the finished attic storage. I'm pretty sure they did finish it as a bedroom and that it was used as a bedroom. But, they have also gotten two warnings in 4 years so I don't plan on using it as a bedroom OR I hope to make it into a bedroom and increase profits.
Definitely, get a lawyer, I don't trust you.
#2 Real Estate Horror Stories Contributor
"I don't believe I'll be able to add that bedroom space due to the fixed 30%(?) percentage of bedrooms to habitable space in the dwelling. "
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Wait a minute, the bedrooms cannot occupy more than 30 percent of the total living area square footage? That doesn't sound right.
In any event, what about applying for a variance? The ceiling is only a few inches below 7 feet. Maybe if you dormered one side of the room so that significantly more than 30 percent of the room was just a few inches under 7 feet, the town might cut you a huss?
While I can appreciate those saying its no big deal to raise it a few inches, what's the actual upshot of a 4 bedroom versus 5 bedroom in this area? I have to assume that once you reach even 3-4 bedrooms, your rate of exponential rent goes down unless you're in high-end rentals and its the difference between one rental to another.
If it costs 5,000 and you're able to recoup that in a year or something, I could see it being worth it. But if it costs $5,000 and only adds $100 in rent per month, that's some significant CAPEX without real return. I'd rather eat the 5k and have it ready when something else invariably goes wrong.
As @Nathan Gesner said, it's probably better to list, market, show, explain, and legalize that it is a 4 bedroom -- put some safety measures up there anyway, like smoke/carbon monoxide, do window guards, fire extinguisher, all those items should be $75 to $100 -- and then go from there. Show the inspector that its listed and leased as a 4 bedroom as well.
#2 Contractors Contributor
- Severna Park, MD
When was this house built ? It may not be a bedroom by todays code , but if the house was built in the 50's or 60's thats the code thats revelent , thats what a bedroom looked like on the second floor . And once the tenant is living there , who is coming in to inspect ?
@Sharon Ho
Wait, this type of regulation is going on in a college town?
Originally posted by @Meryl McElwain:
@Sharon Ho
Wait, this type of regulation is going on in a college town?
Yup, surprised me too! It seems like they inspect this property every 4 years.
Originally posted by @Matthew Paul:
When was this house built ? It may not be a bedroom by todays code , but if the house was built in the 50's or 60's thats the code thats revelent , thats what a bedroom looked like on the second floor . And once the tenant is living there , who is coming in to inspect ?
The house was built in 1959, but I believe the previous home owners added to the house, so I'm not sure how that works. Apparently, someone comes to inspect the rental property every 4 years! They saw beds in there twice, hence the strict warnings. :(
