Property Clinic: Agree works in writing in advance and review the tenancy agreement
My tenant needs to make substantial changes to the property to allow a member of the family to move back home following a long stay in hospital. This will cost about €40,000 to provide a wheelchair-accessible bedroom and bathroom. They do not qualify for any grants. I’m happy for them to do it and may help with the cost.
What issues do you think we need to address in planning for security and fairness for both parties in the future (assuming we have raised the capital costs for now)?
It is not clear whether or not it is the tenant or the family member who is discharging the costs of the proposed work? If it is the family member, as distinct from the tenant with whom you have a legal relationship, it is important to ensure that this person does not inadvertently acquire a beneficial interest in your property by virtue of they having invested in the renovation. Legal advice on how to avoid issues of this nature arising in the future should be sought if the third party is paying for the works.
Otherwise, it is assumed that it will be the tenant who will engage a building contractor and enter into a building agreement in respect of the proposed works.
It is important to ensure that the contractor (and all workers and trades persons) entering into and onto your property have appropriate insurances in place (with an indemnity in your favour as owner of the property) so that you are not put at risk of a claim being made against your policy of insurance and/or you personally in the event of an accident.
It is in your interest to satisfy yourself that all works are carried out in compliance with the relevant regulations, especially in the event that you intend to sell, mortgage or re-let your property in the future. If the works were not compliant with the planning code, it is open to the planning authority to issue enforcement proceedings against you, in which case the onus and cost of complying with the authority’s requirements would rest with you. Therefore, you should insist that the tenant engage an architect or suitably qualified engineer to prepare plans, obtain any planning permissions required, supervise the works and issue the relevant opinions of compliance, to include disability access certificate on completion.
A clear description and specifications for the works to be carried out should be set out and agreed in writing before the work starts. You may wish to contribute to a higher standard of finish than that proposed by the tenant. Any such agreement should be clearly documented between you and the tenant in advance of any work being commenced to avoid any misunderstandings or disputes arising through the course of the project. You should also seek a copy of the building agreement before it is signed to make sure you are satisfied with its contents.
It may be the case that the property is uninhabitable for the duration of the works and therefore you should discuss this with your tenant and agree a position regarding rent during that period of time. As the works are likely to enhance your property and ultimately its rental value, agreement should be reached by you with your tenant in advance.
Finally, you should review your existing tenancy agreement with your solicitor to ascertain whether or not it provides for the tenant acquiring any rights to a long or extended tenancy by virtue of having invested in improvements to the property. Such amendments as are considered appropriate can now be negotiated and incorporated into the tenancy agreement at this stage to provide the security and fairness for the future as required by you both.
Gina Mullen is a solicitor with P O’Connor & Son, Swinford, Co Mayo firstname.lastname@example.org