Renting homes to the ultra-wealthy brings its own set of headaches
High-end tenants of high-end have challenging demands
Talk about champagne problems.
Renting luxury homes to the rich and famous brings its own set of challenges, especially when the properties come up for sale, the Wall Street Journal reported. Tenants who can afford rents of $50,000 to $150,000 per month bring high expectations and lists of quirky demands.
High-end tenants, often celebrities, “have special requirements,” Miami broker Julian Johnston of Corcoran Group broker told the outlet. For one home Johnston helped sell last year, he had to sign a lease rider saying, “If I needed to go to the residence for any reason that I would not speak to, or look at, the tenant.”
Another unconventional request: Paying $20,000 to buy eight-foot-tall potted plants for a sea wall and bedroom balconies to shield tenants from offshore paparazzi.
“They expect the fridge to be stocked and massage therapists, chefs and drivers to be arranged,” Danny Hertzberg of Coldwell Banker Realty in Miami told the outlet. “They also want to know that the landlord has a professional management company that has the resources to respond at 4 a.m. on a Sunday morning for a leaky faucet.”
Leases for high-priced rentals can be complicated because some tenants demand unique clauses that could hurt the rights of the owner.
“In your average landlord-tenant relationship, the landlord pretty much dictates the terms, and the tenant will not have that much say,” Zachary D. Schorr, a real estate attorney in Los Angeles, told the outlet. “But when you get into these higher-priced leases, it’s not atypical for an attorney to negotiate the terms of the lease.”
A well-known Reggaeton artist that was renting property on Miami Beach’s Palm Island even had a security team that wouldn’t allow Hertzberg or other realtors on the premises to show the property to potential buyers.
“We lost a lot of buyers because they weren’t willing to jump through hoops,” Hertzberg said. Interested parties were allowed access only on certain days and had to sign a nondisclosure agreement that forbade taking photos of the home.
The house was listed for $20 million and sold for $15 million, Hertzberg said. “The seller left millions of dollars on the table as a result of the tenant.”
[WSJ] — Victoria Pruitt