6 Mistakes Landlords Make When Renting to Roommates

by Chris on August 14, 2017

If you think tenancy laws are complicated, you’re in good company. As difficult as it is for landlords, tenants are more confused about their rights and responsibilities, especially when it comes to roommate rentals. Landlords need to take the lead by crafting appropriate Tenancy Agreements, educating tenants, and avoiding some common mistakes:

Don’t Designate a Primary Tenant

Perhaps the biggest mistake landlords make when renting to multiple tenants is designating a “primary” tenant, who then manages the others. It’s unlikely that the primary tenant will be experienced enough in property management to take on that task successfully. And what happens if that person leaves?

Run a Tenant Background Check on All Occupants

It is imperative to run a tenant background check on every adult occupant. A tenant with a bad rental history may be hiding that danger by moving in with someone else. Without a separate rental application from each occupant, a landlord could wind up not knowing who is living at the property.

Roommate Leases are Joint and Several – But What Does That Mean?

It is unlikely that the tenants will be aware of the full consequences of a roommate rental. Typically, each occupant is liable for all of the rent and all of the damage, regardless of which tenant or guest caused it. Educating tenants is an important part of managing a roommate rental. The “all for one” concept needs to be explained, along with the consequences should one roommate decide to leave — which may terminate the lease for everyone.

The Lease Must Be Signed to Be Enforceable

The Tenancy Agreement must be signed by all the roommates. Otherwise, there may be unfortunate legal consequences for the landlord. Additionally, occupants who have not signed the lease probably have not read it. If those tenants don’t know the rules, they are less likely to follow the rules.

Roommate Rentals Need a Roommate Lease

Not all Tenancy Agreement forms are tailored to the specifics of roommates. This is true from the simplest issue of formatting — not enough signature lines — through the complicated legal provisions concerning joint and several liability. Multiple tenants may require modifications of a standard lease. Run those changes past a lawyer and give the tenants some time to review the lease, so everyone understands the requirements for the tenancy.

Don’t Forget the Guest Policy

Not all roommate rentals start out that way. It’s important for landlords to consider the contingency of an guest who becomes a full-fledged resident. The lease should provide a standard for when a long-term guest is required to undergo a tenant background check and sign a Tenancy Agreement just like a new tenant would have to do. Otherwise, the guest could be that tenant with a bad rental history who slipped into the property under the radar. Imagine if the original tenant leaves, and this stranger remains at the property — with no vetting, and with no clue what is required under the lease agreement.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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