Do you have a roommate?August 07, 2019
As we have seen the national average rent keeps increasing, as well as the percentage of people living with someone other than their spouse. The higher rents go then naturally, there will be more tenants who want to have roommates in order to split the rent payment.
However, renting to roommates may require some extra attention, especially when it comes to tenant screening, lease agreements or security deposits and ongoing payments. We’ll try to shed some light on the subject here.
If you’re going to rent your property to roommates, it is highly recommended get an application from each prospective tenant. You can then run a background check on all of them before signing a lease agreement. Please note, screening only one tenant is not enough, as they all will be paying rent each month and you need to be sure each one has a positive rental history, responsible financial habits, and rule-abiding behavior. If a tenant has children under the age of 18, you may forgo their screening in case they are not responsible for paying rent.
Note, you may run a screening report right from your Landlord portal in the Applications section using Checkr or RentPrep.
Roommates on the lease
As a landlord you should make sure you get all adult tenants on the lease. Do not allow just one tenant to rent, with the understanding there will be roommates. Sub-leases are find, but as the landlord you need to know who is in the rental and have the proper information in the event of an eviction or other related events. Each roommate has a responsibility for caring for the property, so ensuring they have all signed the lease and know if damages occur that the deposit may be forfeited.
With TenantCloud, it is very easy to conduct a lease agreement as you need just to fill in the info necessary and it will be created automatically.
The security deposit is another important item. All roommates are equally responsible for damages to the property when the lease ends. Regardless who did the damage all roommates and their deposits have an equal responsibility to make sure the rental was in as nice a condition as when they moved in. In the event a roommate moves out and a new one moves in it is again important to have the new tenants information and usually deposits are not refunded to a single roommate who is part of a combined lease. Such refunds are commonly taken care of by either the new roommate or the current roommates.
Lease Invoicing and ongoing payments
When talking about roommate invoicing, there are two types of it - separate and combined. Separate invoicing means that tenants are individually responsible for portions of rent and other invoices and a separate lease is created for every roommate. This would be for roommates who live in the same house, but have separate leases and therefore pay separately. This is most common on University campuses.
Respectively, combined invoicing foresees that tenants are collectively responsible for the whole rent amount and other invoices. You may edit the lease and add a tenant anytime, but once you’ve chosen the roommate invoicing type, you will not be able to change it. Combined invoicing is for roommates such as husband and wife who both want an account but pay the same rent invoice. All roommates that are invoiced in a combined manner see the same invoices and can see who paid rent when.
Landlords who lease with roommates of any sort are very common and it can also be a value-add in regards to having more people responsible for the rent. It does take an added layer of care to review all the roommates' applications, screening reports, having them all sign the lease and invoicing, but luckily TenantCloud has made this easier for you.
To get step-by-step instructions, go to: