Preparing to list, and what not to spend money on

Preparing an apartment building to list is mostly paperwork and a short list of repairs. Skip the renovation. What you are after is a building whose numbers hold up and whose records hold no surprises, since those are what a buyer uses against your price.

What to gather before you call a broker

A price opinion is only as good as the packet behind it, and handing each broker the same packet is what makes their opinions comparable, which is the whole point of interviewing more than one.

• The current rent roll, showing for each unit what the tenant pays, the deposit you hold, when they moved in and whether a lease is still running.
• Twelve months of income and expenses, month by month.
• The leases, including any side deals on parking or storage.
• The property tax bill, the insurance policy and a year of utility bills for what you pay.
• Service contracts, especially any laundry lease, with their end dates.
• A list of work done in recent years, with dates and permits, and a frank list of known problems.

That last list is the easiest to skip, and it is the one that makes a price opinion honest. A broker who knows about the sewer line can price around it. A buyer who finds it during inspections will price it for you.

Check what the City already knows

In the City of Los Angeles, much of what a buyer will learn is public. Read it first.

• Permits and certificates of occupancy. Look your address up in LADBS's building records. If the permitted unit count and the number of doors you rent disagree, better that you find out before a buyer does.
• Rent stabilization status. LAHD's RSO property search shows whether the building is listed under the Rent Stabilization Ordinance.
• Registration. LAHD's RSO registration bulletin says an owner may not demand or accept rent without a valid registration certificate, and units must be registered every year. Certificates run from July 1 through June 30. Owners who pay the annual registration and submit the online Rent Registry receive LAHD's Annual Statement of Registration, and a buyer will ask to see it.
• Open orders. Code enforcement citations from LAHD inspections, LADBS orders to comply, and any soft-story retrofit order that is not closed out.
• The Residential Property Report. Municipal Code section 96.300 makes a City seller order this LADBS report and put it in the buyer's hands before the purchase agreement is signed or before escrow closes. Order it while you prepare, and it cannot hold up the sale later.

What is worth fixing

Spend where a buyer would otherwise take money off the price, and where the fix costs you less than the buyer's estimate of it.

• Active leaks, roof failures and anything causing water damage.
• Safety items, such as smoke and carbon monoxide alarms that do not work, broken stair rails and exposed wiring.
• Anything cited in an open LAHD or LADBS order.
• Paperwork on finished work. An old permit that was never signed off can draw questions from a buyer's lender, just as an open repair can.
• Deferred maintenance a tour will show, such as a broken gate, a dead light in a hallway or trash left in a common area.

A building that is clean, working and documented gives a buyer fewer openings to renegotiate after the inspections come back.

What not to spend money on

• Renovating occupied rent-stabilized units rarely comes back in the price. While a tenant stays in an RSO unit, the ordinary yearly increase is limited to LAHD's allowance, which is 3 percent for the twelve months starting July 1, 2026, so new cabinets in that unit do little for the income a buyer is paying for.
• A buyer who plans a renovation prices the building for their own scope of work, so finishes they will tear out add nothing to what they pay.
• Big projects started to raise the price can backfire. An addition, a new unit or a major system replacement begun right before a sale can leave you with a half-finished job during the buyer's inspection period, so price the opportunity instead and let the buyer take it on.
• Emptying the building to sell it vacant runs into the RSO and the Just Cause Ordinance, under which no-fault evictions require relocation assistance, and the RSO's owner and family move-in rules carry conditions of their own. Talk to an attorney before any step toward vacating units.

Vacant units and units you or a relative occupy

An empty unit costs you rent. It also hands you a choice. The RSO lets an owner reset the rent once a tenant leaves by choice or is evicted for not paying, so an empty unit can go back on the market at today's rent. You can lease it before listing to show the building's income at today's rents, or leave it empty for a buyer who wants the flexibility. Ask each broker which they would do with your building, and why.

Flag any unit with an occupancy history in your packet. If a unit was recovered for owner or family occupancy under the RSO, the next tenant's rent is not decontrolled, and a buyer will want to know that. If you or a relative live in the building, say whether you will stay after the sale, because a unit that comes vacant at closing prices differently from one that does not.

Decisions to make before you list

1. Confirm who has authority to sign. If a company, a partnership or a trust owns the building, find out who signs for it and get any required consent in writing.
2. Settle your tax plan with your CPA. If you want a 1031 exchange, the IRS gives you 45 days after the sale closes to identify replacement property, so start looking before you list.
3. Check your timing against Measure ULA if the building is inside the City. It applies to prices above $5,400,000 and steps up at $10,900,000 for transfers from July 1, 2026 onward, and the City adjusts both figures each July 1, so a likely price near either one makes the transfer date part of the plan.
4. Decide how tenants will hear about the sale, and from whom.
5. Pick the number below which you would rather keep the building.

With those settled, interview brokers with the questions to ask a listing broker in hand, and read the agreement they give you against the listing agreement, term by term. Shaya is not an attorney or a CPA. Take the tenant and tax questions above to those two before you sign anything.