As a landlord, you will face some unique rental situations, and you have to be prepared to protect yourself and your property while accommodating your clients. There is a big difference between renting to a family or a couple as compared to renting a property to roommates.
Here are a few things you should know about this kind of rental situation so that you can be prepared with the rental agreement that satisfies all parties.
Responsibilities May Fluctuate
In many rental situations where you have multiple people renting your property, the responsibility tends to fall on a single person. That's not necessarily true in a roommate situation. It may be ideal for all parties if both roommates share responsibilities.
However, you may have situations where one roommate starts to shirk their responsibilities and the bulk of what needs to be done falls on the other roommate. In these cases, the roommate bearing the responsibility may become stressed and may have difficulty keeping up with paying the rent or electric bill on time.
Because the two roommates may feel like responsibilities are fluid and based on what they might be going through at the time, you need to create a rental agreement that takes that into account. It may help to adopt a standard operating procedure of having all rental applicants fill out an application, so long as they are at least 18 years of age.
Determining Damages and End of Lease Duties
When the lease is up, who will have to pay damages and who receives the security deposit back if everything is fine? In cases where you have two renters functioning as roommates on your property, you should arrange the rental agreement so that they share responsibility for damages. They should also receive an equal split of any security deposit.
This will actually work in your favor, because if one roommate is giving you some trouble to pay their part of the damages, you can at least get a portion of the damages from the responsive roommate. You're also not putting full responsibility on one of the roommates, so it should be easier for them to pay for their parts.
A Joint and Severally Liable Clause Is a Good Idea
When it's time to pay the rent or some other expense, what do you do when one roommate refuses to play? This is a situation you need to be prepared for, and in these instances, you will wish you had set up a joint and severally liable clause in the rental agreement. What this means is that if one roommate refuses to pay their share, you can expect full payment from the other roommate. The responsibility falls on them when the negligent roommate doesn't come through.
This protects you from nonpayment, and you can enforce this clause when you are having difficulties with one of the tenants.
A Roommate Agreement Can Help
To help make things go more smoothly for your roommate renters, you may want to suggest that they sign a roommate agreement. You can have them draw one up themselves or give them an example agreement to work with. This is not something you can enforce, but it may be something you want to introduce.
What is a roommate agreement? It's basically a non-binding document that lists responsibilities and duties for both roommates. It can help them figure out which one has to do basic tasks like cleaning the house or covering the cost of really great maid services. It can settle the issue of who has to turn in the rent money to you and who communicates with you about any issues. The agreement can help them settle arguments and ensure that everything gets done and everyone does their part.
Don’t Skimp the Checks
When renting to roommates, you may be tempted to simply do a background check on one of the renters rather than both of them, but that's not a good idea. It's worth it to do your full checks on both renters, because both of them are going to share some responsibility for taking care of the apartment, paying your rent, and carrying out other responsibilities that would normally fall on a single renter. You want to make sure that you're only accepting applicants you feel comfortable with.
The dynamic is a little different with roommate renters than it is with a single renter or even a family that is renting from you. The best practice is to treat both roommates like separate applicants, putting them both through the entire process you would normally subject a single renter to. It may seem like extra work, but it can save you a lot of trouble later on.
Is Renting to Roommates More Trouble Than It’s Worth?
Does all of this sound like a lot of hassle and plenty of extra work for you? If you feel that way, you may want to consider not renting to roommates at all. If you are on the fence, however, and you think you might want to try roommate renters and see how it goes, make sure you have all your documents prepared ahead of time for this unique rental situation.
Consider the pros and cons of renting to roommates before you open up your property for these kinds of renters. Take time to look at some sample roommate rental agreements to see if they look like they will be a lot of trouble or if this is something you feel you can handle.
You will need to be open to renting to all kinds of people if you are going to keep your property full. It’s worth considering roommate renters, but don’t simply agree to this kind of rental situation just for the money.
We have given you some information that can help you make your decision and develop your own ideas for renting to roommates. From here, it is up to you.
