The Risks of Renting to Roommates

Landlords are exposed to many varied and interesting scenarios when it comes to their tenant's living arrangements.  We have often rented to folks who are consolidating households where a parent will be sharing space with grown children or vise versa.  In our 10 years of property management experience, we have rented to nearly every kind of family situation you can imagine.

Sometimes, we have two or three college students or unrelated individuals apply to rent a space.  This 'roommate' scenario is often the most tricky to navigate.  Since landlords cannot discriminate based on family status, our applications are blind to the social structure of the applicants.  The only exception we have in law is related to the number of unrelated individuals that can live in one residence.  In this case, the law allows cities to restrict the number of unrelated individuals living in a home to three.

So, assuming the roommates pass our credit and background screening, we have to be prepared for events that almost inevitably occur.  In this kind of social arrangement, the tenants are sharing their living space with each other to minimize costs. But, each of the roommates is living their own lives and each of those lives may find itself on a trajectory that conflicts with the terms of the lease agreement or subverts their good relationship with the other tenants.  Often, a roommate may find themselves "voted off the island" if they don't keep in good standing with their other cohabitants.  Or, a roommate may fall in love and run off and get married to someone who is not on the lease agreement and cannot live there without violating city zoning restrictions.

In these kinds of cases, I have found it an advantage to keep an open mind to finding a substitute tenant when a void is created by a departing roommate.  However, to prevent abuse of this rule, I often will charge the tenant that is leaving and the tenant that is filling the void a fee for the inconvenience.  Historically this has worked well.

One of the things to consider is that it is very important to make sure that all the roommates ratify the changes that are being made.  So, it is often necessary to sign new lease agreements with signatures of all parties.  You can imagine that filling a vacancy created by a departed roommate with someone who does not jive with those remaining could create more problems than it fixes.  Typically, we place the responsibility for finding a replacement on the tenant that is leaving.  This keeps them motivated to find someone that will fit the mold and still pass our application process.

Roommate situations are by far some of the most complicated to manage.  However, with some careful thought, it can be done.  If you are considering renting your property and want an expert handling the details for you, CONTACT ME, and lets discuss what our brokerage can do for you.