How to Deal with Tenant Modifications to Property

Including a clause in your original lease contract forbidding tenants from modifying the premises without written permission is a good idea but you may still encounter some tenants who ignore that rule. In addition, responsible tenants will approach you with requests for modifications. Establish a plan for dealing with tenant modifications in advance and stick to it.

Instructions

Difficulty: Moderate

1. Notify the tenant of your right to establish ownership of permanently attached modifications to the property. If a tenant upgrades light fixtures or other attached features, you are entitled to retain the improvements when the tenant vacates the premises, unless previous arrangements are made.
2. Ensure your right to keep added items, even if they are personal property, if their removal by the tenant will cause a financial loss. For instance, if a tenant modified a countertop in order to install a trash compactor, you may keep the trash compactor when she leaves, because its removal would force you to remodel the countertop or purchase another trash compactor.
3. Require an inspection before refunding a tenant’s security deposit upon vacating the premises. You may withhold the deposit if you find modifications occurred without your permission and they will result in remodeling costs.
4. Consider the benefit to your property if the tenant’s modifications increased your value. In some cases, tenant modifications actually enhance the value of your property. If this is the case, consider offering them monetary compensation for their troubles.
5. Approve tenant requests to alter their residences on an individual basis. You may not deny a disabled person the right to alter the premises to accommodate his disability but you may charge a fee if you are required to return the premises to its original state once the tenant vacates.
6. Photograph and document all alterations to your property before withholding the vacating tenant’s security deposit.

Tips & Warnings

• Remind your tenants of the need to obtain written permission before modifying their residence.