You were careful to choose the right tenants, including running tenant background checks. Unfortunately, you are still at risk for possible income loss — because of guests your tenants invite onto the property.
There are many ways that guests pose a risk for potential income loss. For instance:
A guest may commit crime on the property:
The guest might injure other tenants and the victims blame the landlord;
The guest may get hurt, and go after the landlord;
A guest may cause disturbances that chase away good tenants; and
Guests can cause property damage.
It’s important for landlords to include provisions for tenants’ guests in the lease agreement and house rules. Here are some key points to cover:
1. Make sure that tenants understand they are responsible for their guests’ behavior. They will need to supervise guests, go over safety rules, and keep their guests from becoming disorderly or disturbing the neighbors. If tenants fail in this responsibility, they need to understand that they could face eviction.
2. Prohibit long-term guests. Rather, demand that the guest become a tenant. Ask for a rental application, run a tenant background check, and add the guest to the lease if the person is appropriate. That way, you protect your existing tenants, and have a way to manage the guest should he or she end up being the only person in the unit.
3. Set specific limits. Be clear. For instance, how long can a friend stay until they become a “long-term” guest? Many landlords allow two to four weeks worth of consecutive overnights per year for visitors.
4. Conduct routine inspections to determine if unauthorized occupants are tucked away inside. Warn tenants in advance, preferably in the lease agreement, that these inspections are required.
5. Post signs that warn of hazards or safety concerns that would not be obvious to strangers. Keep the property in good working condition at all times, including outdoor lighting and clear access.
6. Watch out for these exceptions and legal tangles:
Threatening to evict the victim of domestic violence when the perpetrator was a guest;
Applying the guest policy to children;
Restricting caregivers necessary for tenants with disabilities. This includes a caregiver’s emotional support or service animal;
Applying the rules unfairly. For instance, threatening to evict a female tenant who has frequent overnight visitors, but not applying that same rule to male tenants.
7. Renters insurance can pay for injuries to guests caused by the tenant’s negligence if tenants purchase that coverage. Some landlords require tenants to carry renters insurance. Another alternative is to simply inform tenants of the advantages of renters insurance, including compensation in the event of a fire or natural disaster, which otherwise would not be covered by the landlord’s building insurance.
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 in 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.