Leasing To Multiple Tenants

A house for rent sign in the middle of a grassy lawn with stepping stones and a fence in the background

It's recently become popular for landlords to rent out single family homes to multiple tenants, particularly in college towns or places where there is a high cost of living. It's a win-win situation: landlords get a significantly higher income than they would with just a single renter and tenants save money, too. But with the addition of each tenant, the likelihood of issues increases, too. From noise complaints to property damage, the problems each renter adds can create stress, as well. If you need help setting up a rental agreement, lease contracts, or any other landlord/tenant issue, the experienced, dedicated attorneys in our network of member law firms across the country can help you with no additional fee to members of our Legal Subscription Plans. The add-on benefits from our Home-Based Business Owner's coverage and our Real Estate, Renters, & Landlord Coverage add-on can give you access to legal advice any time. In the meantime, here are a few tips for renting to multiple tenants.

Roommate Agreement

Strongly encouraging tenants to sign on to a roommate agreement can eliminate disagreements before they even start. A roommate agreement should detail rules, responsibilities, and guidelines for the shared home, including guests, utilities and bill sharing, noise, deposits, pets, parking, room allocation, common household items, food, cleaning, landscaping, and more. Roommate agreements aren't legally binding, but as the landlord, you can help enforce it.

The Actions Of One Affects Everyone

Each tenant should be made aware before moving in that the actions of one tenant could affect all the renters, as landlords can cancel lease agreements for all tenants if one tenant violates clause in the lease. This is not intended to create a hostile atmosphere with your tenants, but should be used to drive home the idea that the tenants should work together to uphold the terms of the lease.

Lease Language

A joint and several liability clause in your lease is very important. This means that each person who signs the lease is responsible for rent, and if one tenant can't pay, the other tenants will not be allowed to pay on their behalf. How the rental amount is divided is up to the tenants.

Subletting

Prohibiting subletting and AirBnBs is very important in today's fast paced world where people's lives change very quickly and often without warning. People move in with significant others or must leave town for work and they often want to solve the problem of owing rent in two places by subletting. Unfortunately, the sublettors will not be on your lease agreement, are not legally liable for the rent or property damage, and are not subject to any other terms of your lease. Plus, it can take months to evict sublettors in certain states where they may have squatters' rights.

Security Deposits

Dividing the return of a security deposit is bad idea as it can get messy quickly. If you have some renters that want to move out at the end of a lease but some that want to renew the lease, returning the security deposit can be a nightmare if it is not explicitly stated that the security deposit is refunded when all parties to the original lease move out. The same advice goes for property damage, as it can be a disaster to decide how the money should be divided. Waiting until all parties to the original lease move out to return deposits will save you headaches in the long run and, when all the parties have vacated the premises, you can leave it to the tenants to decide how the security deposit refund is divided.

Tenant Screening

If a tenant moves away, the other tenants typically try to find someone to replace that tenant right away, but no matter who it is coming in to rent your property, make sure to do a thorough background and financial check.

Renters' Insurance

While you can't require tenants to procure renters' insurance, you can certainly recommend that they get some, for their own peace of mind. Personal property can go missing or be damaged just as easily as the property itself.

Representatives

Getting your tenants to appoint a representative from among the group can alleviate miscommunication and create a consistent point-of-contact.

Make Sure Your Lawyer Reviews the Lease Agreement

The lease agreement is a complex legal document that only gets more complex as more tenants are added. Having your attorney look over your lease agreement - or, better yet, helping you draft it - can protect you, your property, and your rights before the first tenant signs on the dotted line.

Get on-demand help with your rental business from day one when you become a member of our Legal Subscription Plans with our Real Estate, Renters, & Landlord Coverage add-on and rest easy knowing that your legal bases are covered, no matter what happens. Learn more about our Legal Protection Subscription Plans for Individuals & Families, our Home-Based Business Coverage, and our Real Estate, Renters, & Landlord Coverage add-on or sign up today!

How To Solve Disputes With Roommates

A group of young people gathered around a table with books, papers, and mugs.

Many people save money and time spent on household responsibilities by sharing a living space with someone else. Having a roommate can have a lot of pluses: it can be fun, cost effective, and safer to live with someone else, especially when you're starting out. It's also a completely different living experience from living with parents, other family members, or a significant other. Living with someone you're not related to or in a relationship with can also mean that disagreements can (and do!) happen, and it's important to know going in that you probably won't agree about everything.

In shared housing at colleges, we rarely get to choose who we share our space with, but it can give you a taste of what living with someone else can be like. Different personalities, hygiene habits, schedules, and lifestyles can make co-habitating a challenge. One way to avoid conflict is to sit down with your roommate(s) and discuss aspects of your new living arrangement and make a written agreement. This can include division of household chores, division of bills and expenses, how food is kept (is it shared or separate; are you labeling your food containers and purchases; how long are leftovers kept in the fridge; etc), when and how many friends can come over, and much more. Writing down your expectations before choosing a roommate can also help you decide what kind of person you'd be most comfortable sharing your space with.

Leases can cover some aspects of shared living arrangements, such as the amount of rent each person is responsible for, the rules on guests and pets, and certain aspects of keeping the property clean. But most other aspects should also be addressed and put in writing outside of the lease agreement. When you're a member of our legal subscription services, you'll have access to an attorney-prepared Roommate Agreement that can help set boundaries and make your day-to-day relationship with your roommate easier. Our Roommate Agreement covers rent and utilities obligations, the use and care of each other's belongings, upkeep of the property, use of the rental unit and visitor policies, and personalized requirements for your unique situation.

Disagreements are probably unavoidable, but having house rules in order can ease tensions when problems arise. Learn more about all the benefits renters have with our legal subscription plans for individuals and families, or sign up today!