Renting to multiple roommates is very tricky. Once, we rented our 3 bedroom out to 3 college guys. They each split the rent and the utilities. Communication is very important when it comes to renting to multiple roommates. We discovered that it’s probably best to put everything in writing.
It worked out well for us at first. We had 3 great guys renting from us – everyone paid on time. But then we had a situation where one moved out and another moved in and this person didn’t pay on time or in full. They tried to pay us separately (b/c the one didn’t want to have to make up the rent for the other) and we let them know that we need to get the rent from one person. The one person basically got screwed b/c the other person wasn’t paying in full but that wasn’t our problem. That’s why it’s sometimes best not to have roommates – before people get a roommate they need to make double sure that person is a responsible and trustworthy person b/c they are especially vulnerable in this situation. The landlord needs to have these rules to protect themselves – especially since if the landlord needs to evict, they have to evict everyone on the lease not just one person. It’s costly to evict. That would be a big hassle for the landlord legally to deal with only one person not paying if they weren’t protected in this way. Can you imagine being dragged into roommate drama constantly? Never. No thanks.
This joint and several clause in the lease covers that situation:
JOINT AND SEVERAL LIABILITY:
- The Tenant understands and agrees that if there is more than one Tenant that has signed the Lease Agreement, each Tenant is individually and completely responsible for all obligations under the terms of the Lease Agreement.
We also added a sentence in the security deposit section:
- The security deposit is for the tenancy as a whole and will be refunded only when all roommates who are a part of this tenancy vacate and turn the premises over to owner. If a roommate is moving out, it is their responsibility to obtain their portion of the security deposit directly from the new, incoming roommate or wait until the premises are completely vacated by the remaining roommates.
The important thing to note is that when you are renting out to multiple roommates, you still want to treat them as one person. You should communicate to them that you expect to receive the rent check from only one person and you can designate who that person is – whoever volunteers (usually the most responsible will volunteer), I guess, or whoever has the best financial credentials. And you’ll want to make sure to let them know that you will be paying out the security deposit the same way – to one person and only after the premises are vacated – the same person that volunteered to pay the rent, preferably, but this can change if that person has moved out (which happened to us).
Where it gets even more complicated with the security deposit is if one of the roommates moves out and someone else moves in to take their place – which is the situation we had going on – the revolving apartment. Basically, we let them know that we weren’t paying out the security deposit until the premises were vacated so whoever moved out wouldn’t get their money until then. If they wanted their money, then they would need to have the new roommate pay them before they move in or whoever is left in the apartment pay out their portion of the security deposit to them. This is so important for landlords to do b/c you don’t want to get wrapped up in drama between the roommates and you don’t want to pay out a security deposit before you know the extent of the damages.
You should also recommend that the roommates make and sign a roommate contract that would be binding in small claims court – who is in charge of doing what (cleaning/groceries, etc), how much rent each person owes each month (this can be split equal or different based on who gets the master bedroom, etc), who pays groceries, electric, gas, etc. B/c you don’t want anyone getting screwed – especially responsible people.
Ultimately, if people choose to room together – it is up to them not the landlord to resolve disputes in paying rent, etc. To the landlord, it should be as if one person lives there. The landlord needs to absolve themselves of this as per the above additions to the lease in case of roommates. To people considering having a roommate, choose wisely! It’s a sad situation when one person doesn’t hold up their end of the bargain and nobody wants to see anyone getting taken advantage of.
Disclaimer: I do not have a law degree – this is just what we did to protect ourselves as landlords so take it for what it’s worth..