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have tenant refuses to sign lease renewal unless we install new gutter and facia

If the gutter is bad you would want to replace it for the safety of your own home, if not you would be accepting any water damage that may happen. What is the issue with the gutters?  Make sure they are in working condition. If the tenant doesn't want to sign then they would have 30 days to move from the property and return possession to you.
What Patty said is right! If the condition of gutter is that bad then you do need to install new gutter. When I decided to rent out my house, this was one of the concern discussed by the property manager at Lone Star Realty & Property Management Inc., and mentioned that I need to fix it as soon as possible.
The condition of the house is your responsibility. If something is not up to code, the tenant has the right to complain and refuse payment as it can be a safety issue. If this gets taken to court, you will end up getting in trouble if the gutters aren't up to renters code.
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