College Roommate Switch Out

[Bryant Cheely]

Hello All, 

I was hoping to find some advice from landlords who may have faced similar problems. We manage many units, mostly in the LSU area of Baton Rouge, and they are all individually owned. As such, we only accept a single deposit for the unit and a single monthly payment. The tenants sign ONE lease in all of their names, and it is a shared liability. We also require parent/guardian guaranty forms from each of the college tenants. While the tenants each pay into the security deposit, we collect the check from one individual and it is returned to that person or their guardian.  We do not do individual leases (by room), roommate matching, or individual payments, as this amounts to 3x the workload (with most of our units being 3 BR). 

The problem we face are Roommate Switch Outs, either at the end of lease of mid-lease. Since we only collect the one deposit, typically the new roommate moving in would pay their portion of the SD directly to the old roommate moving out - unless the roommate moving out originally wrote the SD check, then we would have them sign a transfer of deposit form. The problem comes when the new roommate pays her portion to the old roommate (who may have spent years there), the old roommate typically receives her full portion of the deposit back, and then a year later when they all move out we perform and inspection and charge the deposit as needed. The new roommate then ends up paying for damage that may have been caused by the previous roommate, especially in the common areas - in the end, the newest roommate feels they are being over charged while the previous roommate go their entire deposit back. 

We do inspect the room between tenants and any work needed would be billed to the previous tenant, but it is hard to determine that in the common areas, especially when two people are still living there. 

If anyone has any advice that may help this situation short of signing individual leases or individual deposits, please share. This was a little hard to put into words, so if further information is required, please ask. 

Thanks, 

Bryant Cheely

[Marcia Maynard]

We have a procedure for adding or releasing tenants from the rental agreement. The security deposit always stays with the unit and share of it must be worked out among the tenants. It is paid out in one check in the names of the tenants remaining when possession of the unit has been returned to us after we have finished our final report and accounting. 

We do periodic inspections of all of our properties and charge for damages as they occur. When there is a change of household makeup we do an additional inspection and ask the tenants of any known damages, since we can not see everything when there is furniture in the way. We emphasize that regardless of who is in tenancy at the end, the unit will still need to be returned to us as it was when we originally offered it for rent. We show the original move-in check list to the incoming tenant so they are aware, because they will be assuming some risk.

We charge a move-in fee at the beginning of tenancy which the original tenants paid. It is okay to charge an administrative fee to the outgoing and incoming tenants for the extra time and effort required to take people off a lease and to add new people to a lease.

We also do month-to-month rental agreements. With such, we just terminate the previous rental agreement and then enter a new agreement with those who make up the new household. We charge an administrative fee for our effort.