In this day and age, it is very common for renters to band together to share rent and lower their monthly obligations. On a square footage basis, it is far more cost effective to rent a larger space than a smaller one. One bedroom apartment, for example, are often a lot more expensive than 3 bedroom units, based on square footage. Three tenants can save a lot of money by becoming roommates and sharing the three-bedroom apartment versus each getting his or her own one-bedroom unit.
All that said, as a property manager, you must be cognizant of the ramifications of roommate scenarios.
In this article, we will discuss the legal rights and responsibilities of roommates and how you as a landlord can best protect your business.
List All Adults on the Lease Agreement
It is prudent to get every adult inhabitant on the rental agreement or lease. Failure to do so can lead to some hairy issues down the line. For example, you need to serve the leaseholders when a potential legal issue arises. If there are three inhabitants of an apartment, but only one is on the lease and you can never find him home, it will be difficult for you to begin an eviction process.
It still can be done, but it is more difficult and time consuming. If you had gotten all the people living in the apartment on the lease, however, you could serve any one of them.
Protection for Both Landlords and Tenants
Each state has its own laws governing renters and tenants, and a roommate’s legal rights are protected by these laws if he is listed on the lease. If he is not listed on the rental agreement or lease, the roommate’s rights are subordinate to those of the renter. This basically means that if you choose to evict the person who signed the lease, you are evicting everybody in the unit.
The roommates not on the lease have no choice but to move out in the case of an eviction.
However, legal complexities arise when the actual tenant may not be causing problems. Take, for example, the case of excessive noise. If his roommate is making the noise but is not on the lease, then you have to serve notice and deal with the situation with the tenant. He could say that he was unaware of the situation and delay the eventual resolution of the problem.
This does not eliminate his responsibility to solve the problem; it does potentially delay it, however.
Let’s look at a case involving a missed rent payment. If all three inhabitants of the apartment are on the lease, they are all liable for the rent payment. You will serve all three with a “pay or quit” notice and if you don’t get your rent check within the allotted time period (as dictated by your jurisdiction), you can elect to evict all three tenants.
However, if only one person is on the lease, you can serve only the one.
The net outcome may be the same. However, it is usually more effective to put the pressure to pay the rent on three people rather than just on one.
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I think it’s ideal to have every adult that occupies the property on the lease. I can see how it can get hard to always do in practice because of individuals moving in and out over time.
The most successful landlords we see are those that have “unbreakable” rules and standards.
This usually includes things like no blank spaces on the rental applications and having every occupant on the lease with a financial responsibility agreement/addendum.
So if there is a lot of turn-over with roommates moving in and out, I agree it can be a daunting task.