Who pays for property improvements done by tenants?

Article from Real Estate Web, 17 November 2010
Article by Lanice Steward

What two recent court rulings said.

At least two recent court cases have shown yet again that the tenant who improves a property while in occupation has no "ownership" or "compensation" rights to those improvements - even if it can be shown that they have significantly raised the value of the property.

If the tenant feels that an improvement is essential and that, if he handles it himself, he should be entitled to compensation, he should do a deal with his landlord before the work is undertaken.

This is, in fact, obligatory in law because a tenant may not alter a property without the landlord's consent. In getting this consent a deal should also be struck on who is to pay for it. In some cases the landlord and tenant can go 50/50 on these costs.

In the current not-too-buoyant property market, landlords may well neglect to paint walls, to treat the wood or resurface the floors of their properties, thereby almost forcing the tenant to do these jobs himself.

In these circumstances the tenant must apply as much pressure as possible to see that they are paid for any maintenance carried out.What tenants most want is an alarm system and burglar bars. This is normally negotiated before a lease is signed if the house does not have adequate security measures.

However, problems arise if the tenant wishes to do further improvements after they have moved in. The golden rule is to communicate with the managing agent or landlord prior to any work being completed