Questions about amending an inherited lease upon renewal

[Vinny Joseph]

Hello,

I had my first investment property a couple of months backs, thanks the great guidance from BP. I had to inherit the lease as part of the agreement and its almost time to renew the lease. I have 2 tenants living inthe property. I want to get the opinion on some clauses in the current lease which I want to change or make it better

1. At present the lease is under the tenants name but the dad of one of the tenants pays the rent most of the time. Should I add the parent as a cosigner?
2. These tenants were living for a couple of years. The previous owner hasn't had any recent background or credit checks done when I bought the property. Should I enforce credit and background check as part of the renewal?
3. There is a clause in the current lease saying each tenant should pay 50% of the rent. Is this a common clause when you have multiple tenants?
4. What clause should I add to ensure the full rent is due even if the tenant moves out? Basically I want to say I am renting the entire place not making any room sharing arrangements.
5. In case if a tenant moves out within the term of the lease, will that break the lease? Will the staying tenant be on a month to month lease in that case? Do I need to get a new lease if a new roommate tenant comes in?

Really appreciat ethe opiniin and suggstions from the fols here.

Thanks

VJ

[Nathan Gesner]

Quote from @Vinny Joseph:

1. 
   At present the lease is under the tenants name but the dad of one of the tenants pays the rent most of the time. Should I add the parent as a cosigner?
2. These tenants were living for a couple of years. The previous owner hasn't had any recent background or credit checks done when I bought the property. Should I enforce credit and background check as part of the renewal?
3. There is a clause in the current lease saying each tenant should pay 50% of the rent. Is this a common clause when you have multiple tenants?
4. What clause should I add to ensure the full rent is due even if the tenant moves out? Basically I want to say I am renting the entire place not making any room sharing arrangements.
5. In case if a tenant moves out within the term of the lease, will that break the lease? Will the staying tenant be on a month to month lease in that case? Do I need to get a new lease if a new roommate tenant comes in?

1. You should definitely create a new lease when this one terminates. You don't need to cancel this one and then start a new one. Just sign a new lease.

2. The person on the lease should be the person occupying the property. If they get the rent from the father or from the government or from a sugar-daddy shouldn't be your concern. As long as the rent is paid with legal funds, it doesn't matter who signs the check.

3. Caveat to #2: I don't allow cosigners! If the son can't qualify for the rent on his own, it's a higher-risk situation. What happens if dad stops paying the rent because he feels the son is a deadbeat? What if dad passes or can no longer afford to pay the rent? I only want tenants that can provide for themselves. 

4. DO NOT include a clause that each tenant pays 50% of the rent!!!! Every tenant is 100% responsible for the rent and all terms of the lease. With a 50/50 split, Tenant A could pay his half while Tenant B doesn't and you can't kick Tenant A out because he paid his share. Educate yourself on Joint and Several Liability and make sure it's in your lease.

5. To piggyback on #4, do not allow subleasing/subletting. All tenants pay rent to you and they are all responsible for 100% of the rent. If Tenant A wants to leave, he can only do so with permission from you and the remaining tenants. You also want to confirm the remaining tenants can afford the rent without Tenant A, otherwise they all have to go and they are all subject to penalties involved with breaking the lease.

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