By Tracey March
Renting to roommate tenants, or “co-tenant renters” can be more challenging than renting to a single tenant or family. Renting to multiple, unrelated tenants raises issues when it comes to managing lease agreements, security deposits, rent collection, and tenant screening. Furthermore, conflicts between individual roommates can be a thorn in a landlord’s side. Here are some tips for managing co-tenants.
Make roommates jointly liable. Make sure that your lease agreement states that tenants are “jointly and severally liable.” Think of it as treating all the tenants in a unit as one person. Joint liability means that if one of your roommate tenants violates the lease, the other roommates on the lease are equally responsible. So, if one tenant pays rent late or damages the property, all the tenants are liable. While this may not seem fair from an individual tenant’s standpoint, it’s a standard provision in any lease, and a great protection for you, the landlord.
Don’t allow for subleasing in your lease agreement. Technically, sublessors are not jointly and severally liable for rent or other lease obligations, as the don’t actually sign the lease. You want to make sure that every person living in the rental unit is responsible to you for meeting the terms of the lease agreement.
Screen replacement tenants in the same way other tenants are screened. All tenants should be treated the same in the screening process, whether they are the original tenant or a replacement. Don’t relax your screening standards for any tenant.
Name every tenant in the new lease, and have every tenant sign it. Technically, the original tenancy is terminated if one of the original lessors moves out. When a potential new tenant has been successfully screened, have all the tenants in the unit execute a new lease agreement. While this may create extra work for you in the short run, it means that all tenants will be jointly and severally liable and your record-keeping may be easier, because you’ll have one lease agreement for the rental unit, rather than multiple agreements and addendums. You can keep the original termination date and other terms if you want, but since it is a new lease agreement, you also have an opportunity to raise rent or change any other lease provisions.
Don’t divide security deposits. When a tenant moves out, don’t divide the security deposit and give him or her the proportional share. The deposit should only be returned when the unit is completely vacate and you have the chance to inspect the property for damage. This means the co-tenants must work out for themselves how to handle the security deposit when one of them moves out. To accomplish this, the incoming co-tenant can pay the departing co-tenant his or her share of the security deposit, or the departing co-tenant can wait until the other co-tenants have vacated to get his or her portion of the deposit back.
Insist on receiving one check for the full amount of rent. In addition to being consistent with treating the tenants as one person for the purposes of joint and several liability, and cutting down on administrative work, this is a great way of limiting your involvement with individual tenants. This will make you less likely to get drawn into individual tenant financial issues. If one of the tenants can’t come up with his or her rent, he or she will need to work it out with the other tenants rather than with you.
Suggest that any roommates renting your property enter into a co-tenancy agreement. Roommate agreements set forth basic expectations about sharing a rental unit. As the landlord, you won’t be obligated by anything in the agreement, but it may help your tenants clarify their responsibilities regarding the tenancy. Typically these agreements cover rent how the rent will be divided and who will write the monthly check, which bills and expenses will be shared and how they’ll be divided, room assignments, cleaning and chores, noise, overnight guests, and obligations at move-out.
Assign a tenant representative. Ask your tenants to designate one person as the point person or “tenant representative.” This person should be responsible and available to communicate with you about any issues or concerns that you or the tenants have. Rather than having to contact each roommate individually, you can get in touch with the representative, which will save you time and simplify things like the scheduling of maintenance and repairs.
As always, this information should not be considered legal advice. Keep in mind that state and local jurisdictions have different laws and rule. Always check the rules and regulations in your area and consult an attorney before changing your lease agreements or taking any action.