As a landlord, you're probably aware that your building's amenities can be a major draw for tenants. Perks like playgrounds, swimming pools, gym facilities, party rooms, and roof decks can not only attract renters but also justify the higher rents you may be looking to charge.
But what happens if some of your building amenities are suddenly off limits? It's a scenario a lot of tenants have encountered during the COVID-19 pandemic. In an effort to keep tenants safe, some buildings have closed off gyms, playgrounds, and other shared facilities that typically lead to crowding.
But building amenities can be taken away outside of a pandemic, too. Sometimes, facilities need updating. If you're tearing out an old playground and replacing it with upgraded equipment, that might take a few weeks. If you're making major pool repairs, it could take even longer.
If you're a landlord who's had to temporarily close down some building facilities, whether due to COVID-19 or another reason, you may be wondering whether your tenants are entitled to a rent reduction. Generally, it depends on the terms of your lease, but that doesn't tell the whole story.
What do your lease agreements look like?
It's common practice for lease agreements to state specifically that residents are not entitled to a rent reduction if amenities are off limits during their tenancy. If your leases read similarly, then you're in luck, because you're not obligated to refund any rent as a result of certain amenities being unavailable. The only way you'll be obliged to give back money or reduce rent is if your leases specifically obligate you to do so or if your tenants pay a spelled-out, separate fee for those amenities.
But just because you don't have to give your tenants a break on rent for missing amenities doesn't mean you shouldn't. Imagine your building has a playroom for children, only it's closed due to the pandemic. If rent in your building costs $100 more per month than rent in most comparable buildings nearby, and that playroom is a big draw for tenants, then they may not take kindly to it being closed for months without receiving some sort of discount. Therefore, even if you're not obligated to reduce their rent, you may want to offer to do so as a gesture of goodwill. That way, they'll be more likely to want to renew their leases once they expire.
Offering a discount on rent for unavailable amenities could also help improve your reputation as a landlord. If you've struggled with vacancies in recent years, giving your current tenants a reason to talk you up is a good thing.
Also, chances are, having some amenities off limits is saving you money. For example, if your swimming pool is closed, you may not be paying as much for chemicals and maintenance. As such, you could be in a good position to pass some of that savings on to your tenants.
Remember, as a landlord, it never hurts to be generous with the people you rent to. Even if you're not required to do a thing for your tenants when they're unable to use your amenities, it pays to consider giving them a break on their rent anyway.