Rent Controlled Kitchen
I have a rent controlled tenant. The last owners installed a high end bathroom and my tenant is currently paying 1/3 of the market rent. He wants a new kitchen, how much can i increase his rent by? Thanks
I have a rent controlled tenant. The last owners installed a high end bathroom and my tenant is currently paying 1/3 of the market rent. He wants a new kitchen, how much can i increase his rent by? Thanks
Well first off, does he need, excuse me do you think your rental apt needs a “new kitchen” or is just the cabinets, appliances etc? As Minard said; to avoid floods and other potential issues to your property, it may be worth doing so sort of work. I wouldn’t put in a high end kitchen though. As the others have said – 1/40th the cost is the legal allowance.
“Remember, the ultimate goal is to get the tenant to move.”
That’s silly. You buy a property with an RC tenant knowing what the law is and that the tenant can stay as long as they pay the rent. They may move on and provide an unexpected windfall to your property value, but you can’t expect that so might as well do what you can legally to increase the rent.
“does the landlord get rent increases for things like a new roof or boiler?” – a landlord can file MCI paperwork for improvements that benefit the entire building, also described in the faq link I pasted above. For MCI’s an owner can get an increase of 1/84th of the cost of improvements apportioned to tenants based on # of rooms.
A new roof or boiler can only be installed if the life of the current ones have expired. Besides that, the rent increase is for the building and has to be apportioned to all the apartments. The LL may not be interested in raising rents on the other apartments. So this tenant’s rent would not increase by much.
Can you use the kitchen as leverage to get additional improvements that the tenant will never go for, like new windows? Just curious, does the landlord get rent increases for things like a new roof or boiler?
cda, an adverserial relationship between LL and a RC or RS tenant is built-in by the system. That’s because they have diametrically opposing interests.
Whether the LL puts in a new kitchen or not is a judgement call that we cannot make without more info. Remember, the ultimate goal is to get the tenant to move. If refusing the kitchen will make that more likely then definitely refuse. If the tenant is there for life no matter what, and at 1/3 the market rent that may be the case, then put in the kitchen on the condition that the tenant will sign off on the rent increase. That way at least you’ll be getting a litlle more rent while you wait to see who dies first.
The system stinks, doesn’t it?
I agree with HDL and others that say to do it, especially if the tenant wants it and understands that their rent will increase as a result.
It doesn’t always have to be an adversarial relationship between a RC tenant and their landlord… sometimes they can both win a little bit.
I grew up in a 2BR railroad on the Bensonhurst/Gravesend border; my mom still lives there for $350/month. The landlord is a jerk to us for no reason, just because we’re RC. It really doesn’t need to be that way IMHO.
A rent control unit is another matter. If the tenant is elderly they may not even have to pay annual rent increases set by the State. Instead the government makes up the difference through real estate tax credits to the property owner.
You will probably never get the money back if you renovate their kitchen. However if they live above you, renovating the kitchen plumbing may be to your own advantage.
Bklnite’s math is good.
Let’s say tenant is paying $500 for a $1500 market rate apt. If you spend 40K on a new kitchen (which is reasonable) then the rent effectively goes to market. If I were you I’d do it. A kitchen is going to cost $20 – $25K at a minimum.
My guess is the tenant will be there forever so v little chance of it ever going to market rate