Ask Real Estate

By RONDA KAYSEN

Mom, the Guarantor, Steps In

Q. My wife and I own a two-family townhouse. We live in the top two floors and rent out the garden apartment. There is a crawl space that we want to renovate into a basement and then turn the garden apartment into another duplex. To compensate the current tenants for the inconvenience and noise, we offered them a $1,000 rent credit and the use of the new space at no charge until their lease expires. They agreed to the renovations and are excited about the idea of living in a duplex. However, the mother of one of the tenants signed the lease as a guarantor. She does not want the renovations done while her son and his roommate are in the apartment, even though most of the work will occur outside of the apartment. What right does a co-signer have in a situation like this? Can she prevent us from doing the work?

Fort Greene, Brooklyn

Alas, Mom is just doing her job: protecting her son where she sees danger. But as much as she might want to shield him from risk, her powers as a guarantor are limited. Unless the lease includes a provision awarding special rights, most guarantors simply guarantee that rent will be paid.

But before you pull out that sledgehammer, you might want to rethink your remodeling plans. Your tenants might be fantasizing about a future spent lounging in a duplex, but once they start living in a construction site, their mood could darken.

“Renovating an apartment while it is occupied can be a recipe for disaster,” said Brett B. Theis, a real estate lawyer. “Even tenants that are initially happy with the idea of a renovation may eventually turn sour.”

Frustrated tenants could withhold rent or take you to court. If the judge determined that the construction conditions rendered the unit uninhabitable or the common areas unsafe, the tenants could get a rent abatement or reduction. Remember Mom, the grumbling guarantor? Well, the tenants and their guarantor could collectively argue that they are relieved of any further liability or responsibilities under the lease.

“Whether or not the tenants agree to the project, the landlord must ensure that these renovations do not pose a threat to the health, safety and well-being of the building’s occupants,” said Lucas A. Ferrara, a Manhattan real estate lawyer and adjunct professor at New York Law School.

There are other risks to consider. A tenant could become injured tripping over construction materials. Or the work could damage his personal property. You could be liable for these things. As tempting as it may be to defy Mom and get the work done while you are collecting rental income, you might want to heed her warnings and wait until the apartment is vacant to start your ambitious project.