0000261z - Renting to Multiple RoommatesLandlords sleep easier at night when they know their rental property is leased by good tenants who will pay the rent and take good care of the premises.  Conversely, bad tenants give landlords nightmares.  One of the difficulties is that prospective renters behave like first-rate tenants for the duration of the initial walk-through.  Landlords need to ascertain they are getting the best tenants by screening every prospective renter carefully before signing a lease.  Some professionals believe that 95% of tenant problems are removed during the screening procedure.

Detailed screening processes are worth the time and money.  If you are wondering “how much does it cost to evict a tenant?”  The answer is thousands of dollars!

Legal Issues Involving Multiple Roommates

  1. If one tenant needs to move out early, are residents allowed to sublet the rental property?
  2. How much notice is required from tenants before moving out?
  3. Are the other roommates responsible for the rent if someone moves out without warning?
  4. Do all tenants pay the same amount of rent and are separate checks acceptable?  Landlords need to specify whether there is a primary leaseholder or if all tenants are co-signers.

Good Practices

Experienced landlords advise placing all tenants on the rental contract, including minor children.  Should minor children turn 18 during the rental contract term, they also become legally responsible for rent and their activities.  Landlords should include the term “jointly and severally” in leases with multiple tenants and as this allows them the legal capability of pursuing payment from any one of the multiple roommates if one or more doesn’t pay.  The lease agreement should also establish whether the landlord is willing to receive multiple rent checks or one check for the entire rent.  Unless every tenant is on a separate lease, rent nonpayment or rule violations apply to every person on the lease agreement and all can be evicted or have their tenancy terminated.

Credit checks should be run on every potential adult tenant to identify whether they have good or bad credit or an eviction history.  In some cases, good tenants have moved out sticking the landlord with bad credit tenants and major headaches.

Income requirements are somewhat dependent on the current rental market.  Historically, four times the rent amount was standard but in lower-income neighborhoods, landlords choose to accept income that is 2 1/2 or 3 times the amount of rent.  The same standards of credit-worthiness and income need to be used for every applicant including relatives and friends as different standards may create a case for discrimination.

Evictions or unlawful detainer lawsuits are the legal process required to remove a tenant or tenants from rental property.  Landlords must give written notice and attain a court order.  Landlords who do not completely follow the correct eviction procedures, as defined by their state law, may face tenants who are able to avoid eviction.

Protecting your Investment

Landlords can help protect their investment by conducting credit checks and conducting background checks of all prospective tenants.  Property owners must follow correct procedures but have the right to analyze credit reports and background checks.  Many landlords hire tenant screening companies that let them know if tenants pay their rent promptly, have prior incidents of rental property damage, and what their prior landlord ratings are.  It is also good practice to request references from prior landlords and verify every applicant’s employment and income.

Renting to multiple roommates doesn’t have to be a nightmare.  Screening procedures can help you sleep serenely through the night.