Additional Renter

[Joseph F.]

A tenant with an existing lease has approached me requesting to have an additional person move in and live in his two bedroom apartment.  I pay for water and heat so I said that I would agree to it provided I get an additional 15% rent.  The existing tenant is subsidized by SSI so I want to leave his lease as is.  I get my full rent, on time, every month.  What is the best way to set up the additional tenant to give me the maximum protection and leverage?

[Marcia Maynard]

It is good to have a procedure in place to add or release people from a rental agreement.  From time to time you will have tenants who want to change the makeup of their household.

Occupants who stay a certain length of time or meet certain criteria will become your tenants whether you want them to or not, depending on the landlord-tenant law for your jurisdiction.

Protect yourself by having a clear guest policy with time frames. Have a clause in your rental agreement prohibiting unauthorized occupants and set a fine (ours is $50) for a breach of this clause. That will encourage people to come to you first.  Require a completed rental application from anyone whom the current tenant wishes to move-in.  Do the background check. 

If the applicant meets your minimum criteria to rent, then accept them and add them to the rental agreement as a tenant, jointly and severally liable. If you are taking on more risk, say because of an area of weakness in income, credit history, rental history, or legal history, ask for additional security deposit. Our income requirements are based on household income. Many people in the recent economic downturn began sharing because they could not make it on their own.

The security deposit stays with the unit and is not released until all tenants have vacated and the property has been returned to the landlord's possession. I make this clear with tenants who are sharing housing and I reemphasize this if one of the tenants wishes to move-out. I simply tell them they will need to get their share of the security deposit from the remaining  roommates, not me. I will do an inspection when someone moves out and will release the outgoing tenant from the rental agreement if the remaining tenants meet our minimum income requirements for the household.

About charging more rent for additional people. Be careful here. If you set a rental price for the unit and the number of the people in the unit still fall within your maximum occupancy limit, there should be no change in rent. If utilities are included, they should have already been factored in for occupancy of one or more, up to your maximum occupancy. If you want to raise the rent of the unit for other reasons, by all means do so. However, I think asking for more security deposit to cover your additional risk makes more sense.