On the Level

Be Realistic and Avoid Costly Upgrades

by Terry F. Meany

This past Christmas, I munched my way through a corporate Christmas party held at the San Francisco Museum of Modern Art (thanks, SFMOMA). Happily sated with shrimp egg rolls and prime rib, I wandered around the Roy Lichtenstein exhibit, which provided graphic confirmation of Abraham Lincoln’s declaration that you can fool some of the people, in this case, art critics, all of the time. Lichtenstein found a lucrative market for enlarged images which, when drawn by modestly paid comic book illustrators, were highly disposable and hardly considered exceptional art. I guess it is all a matter of timing.

Another exhibit at the SFMOMA featured a new Bentley Continental GT coup. In a strange twist of one former vanquished enemy infiltrating the victor’s culture, Bentley is now owned by Beetle-builder Volkswagen, which developed this hot cha-cha super car. Despite the nearly $200,000 cost, I noticed a blemish in the paint. Six figures cannot guarantee a flawless finish, even a fleeting one. The first time this twin turbocharged fun-mobile hits the mean streets, its paint will chip like the lowliest Ford Pinto.
High-end products and materials are great, but are often precious and in need of pampering. Fine wine glasses cannot go in the dishwasher, but you can clean two-for- a-buck water tumblers with a fire hose, and they never break. I have known some landlords who put way too much money into improvements with little hope of recovering their investments any time soon thereafter. One went through and refinished all the oak floors, repainted the hallways in a three-color scheme, and put in very nice carpet runners throughout a 1920s brick. The floor coating had barely cured when I went through the units to repair some windows and found the first scratches and crusted- over cat vomit. Meanwhile, a new building was going up across the street and advertising competitive rents. In hindsight, my client would have been better off buffing and cleaning the floors, shampooing the carpet, and going with antique white in the halls. Replacing about half his tenants would have helped, too, but that was not an option.

When a building is making money, getting carried away with upgrades is quite easy. If a costlier upgrade lowers your maintenance and brings you some return, I am all for it, but think it through first. You can tile shower stalls, but will you maintain the grout? Can you expect a renter to keep it bleached clean and mildew free? Think acrylic surrounds or laminate instead.

Good quality vinyl wallpaper can hold up for years and allow you to skip wall painting, but remember the installation is costly. In terms of maintenance, it will need to be washed periodically, and it has an uncanny tendency to attract paint spatter when the ceiling and woodwork get recoated. One-color paint fits all is an easier alternative. Designer window blinds are just as likely to get mauled by a cat or have operation problems as cheaper blinds or vinyl shades.

There is a reason that the term apartment-grade is part of the vocabulary. It implies good enough, functional, clean and quick turnover. You could argue that upgrading a rental will bring an equal upgrade in the renter’s attitude, but without the self-interest that comes with ownership, this is hardly a given. I am not being cynical, just realistic (even if the two are not far apart sometimes).

Are interior upgrades the best use of your resources? What about improving security with extra outdoor lighting? This not only benefits your tenants, but it also protects you should anyone be injured on your property, for it shows you took precautions to protect residents and guests. Security liability of premises, according to security expert Chris McGoey (www.crimedoctor.com), is on the rise, resulting in multi-million dollar awards in some cases of sexual attack. McGoey explains that exterior lighting should allow for 100 feet of visibility—all the better to see if anyone is lurking nearby. Bear in mind that any lighting you install can affect neighboring residents by shining in their windows, so choose your fixtures carefully.

Speaking of security, how is your key program going? What key program? The program that keeps a clear record of how many keys have been issued per apartment, who has them, when they took possession and a schedule for changing the locks, even for long-term tenants. Over the years, keys are copied and loaned to house guests, maintenance contractors are given keys, and occasional unregistered roommates come and go with their copies. You know by now you cannot expect all of them to be accounted for, so change out the lock cores, including the entry doors, as often as you believe is prudent and certainly when a unit turns over. Some owners will try and keep costs down by swapping cores with another apartment, but this is setting you up for trouble if a ne’er-do-well with a supposedly defunct key wanders around until finding an apartment door the key will open.

You are responsible for the security of the doors and their keys. All back-up keys or copies should be stored in a secured area, preferably in a safe and not hanging on a keyboard in the manager’s office. The keys should be coded in such a way that reading the code alone cannot identify the unit. A master code sheet should be stored separately from the keys.

The ideal entry system is probably one that employs electronic-card access. Individual cards can be deactivated when lost, which will limit admittance for others. No more changing all the locks when keys are lost. These systems are normally found in large institutional and corporate settings with hundreds if not thousands of card users. However, at least one supplier, Card-Access.Net, offers a system that can handle two entry doors and up to 2,000 card holders for under $1,000 (www.card-access.net). You supply the computer power, appropriate door locks or strikes, and the wiring.

Regardless of how you secure your building, take all new tenants through the paces and operate each door and window lock at move-in. Require these tenants to sign off that all locks work properly and securely by making sure they initial a note to this effect in their leases. As obvious as it sounds, include an instruction, in capital letters, to KEEP ALL DOORS AND ACCESSIBLE WINDOWS LOCKED WHEN OUT OF THE UNIT.

So Much for Romantic Hawaii
In July 2002, Waikiki’s largest hotel, the Hilton Hawaiian Village, closed off its newly constructed 453-room tower section due to mold contamination. Unwilling to take any chances that even a single mold spore would survive, the Hilton tossed out everything—including wallpaper, carpeting, towels and furniture—either burying or incinerating it all. In this search-and-destroy purge, even wood desks, not exactly hot beds for mold growth, were tossed, despite an absence of any mold-induced illness reports. The Hilton, as expected, sued everyone connected with the tower’s construction, including the contractor who built the steel stairways. A year and $55 million later, the tower reopened, while countersuits against the Hilton were launched like so many legal salvos.

Mold contamination and its accompanying legal issues are the latest in a short yet expensive line of construction misfortunes, including lead-based paint, asbestos, L-P siding and synthetic stucco. Older buildings with plaster walls (mold prefers paper-backed drywall) and a lack of insulation normally escape the mold scourge, but you still need to monitor them. A poorly ventilated unit without bathroom and kitchen fans, or even a bathroom window, can offer a cozy breeding ground for mold and mildew. San Francisco Ordinance 125-01 includes mold and mildew as public nuisances (talk about a list with lots of potential candidates) and designates fines of $25 to $1,000 for landlords who fail to eliminate them pronto.

Normal bathroom mildew is not the stuff of lawsuits, but you do not want a suddenly chemically-sensitive tenant, for whom even the smell of baking bread induces a wheezing, near-death experience, to start contemplating one along with an expensive decontamination procedure. Despite a lack of clear scientific standards, some jury rewards for mold-related illnesses have been in the millions of dollars (this seems to be a popular monetary level when suing landlords).

Take mold complaints and reports of water leakage or seepage seriously and address them immediately. Fix any leaks, clean the affected area with a disinfectant soap, spray with bleach, and allow complete drying. If painting, use paint with fungicide added.
Ventilation is another issue. What do you do if you need a bathroom fan and installing one is not practical? Consider installing a louvered door—not the best solution, but it helps.

The opinions expressed in this article are those of the author and do not necessarily reflect the viewpoint of SFAA or the San Francisco Apartment Magazine. Terry F. Meany is a former contractor and landlord. He is now a full-time writer and author of Working Windows: A Guide to the Repair and Restoration of Wood Windows, published by Lyons Press. He’s cost conscious, but not cheap, and knows deferred maintenance always costs more in the end. He can be reached at tfmeany@msn.com. Copyright © 2005 by the San Francisco Apartment Magazine. All rights reserved.