When a tenant moves out and new tenant moves in.

Question

Hello everyone,  I am new to property management, my tenants are grandfathered in when I bought the property and would like to know how I should handle the current situation.  Short story,  husband and wife on month to month separated, wife moved out, husband stayed and got 2 roommates.   What if anything should I be doing to protect myself?  I would appreciate any advice.

John Sanderson · Answer

One thing to add to what @Dale Walker said, before giving Notice to Quit(if it comes to that) or informing them you won't be renewing their lease, be sure to read the current lease thoroughly, as well as Michigan's(if that's where the property is) Landlord Tenant laws. If the lease is solid, it will most likely have a clause stating how much notice you're required to give the current tenant before termination of their lease, and what the required notice is for tenants without a lease.

For tenants without a lease, most states consider it a M2M lease, and you're usually required to give either 30 or 60 day notice, but again, read the Landlord Tenant laws.

If they like living where they are, and they're going to be good tenants in the future, you probably won't have any issues after letting them know they'll need to apply for and sign a lease.

Marcia Maynard · Answer

Changes in the make-up of the household is not uncommon in this business. Better establish a policy and procedure for handling this. We have a method for taking someone off a rental agreement and a method for adding someone to a rental agreement. We also use M2M agreements, so just rewriting a new agreement is simple or adding an addendum.

If you have a clause in your rental agreement that covers unauthorized occupants, then it will be clear to tenants that they can't just move someone in. They need to request the change and get your written authorization. You need to screen the incoming tenants and make them jointly and severally liable as a party to the rental agreement.

The security deposit stays with the property until the unit is returned to you at end of tenancy. Let the tenants work it out among themselves as the how they will work out their share of the  security deposit and how they will jointly pay the rent each month. You should be looking at receiving one payment for rent, not three.

Since the terms and procedure were not clarified before this happened, address it as soon as you can. Try to save the tenancy, but establish a new rental agreement with clear terms.

If the new roommates have not moved in yet, let your tenant know the steps that must be completed before they move in. It will cause a delay and they might not be happy about that, but do your best to provide good customer service. Be polite and fair. Process their applications as quickly as you can, so you can either reject them or add them to the contract.

Dick Stevens · Answer

Screen them just like you would any new tenant.  This type of situation becomes a major issue when the existing tenant moves out down the line and leaves the "new roomates" as your only tenants.  Make sure they are all on the lease so they are all liability.  If the new roommates don't pass your screening don't let them move it.

Matt Madalis · Answer

You could add a M2M addendum to the current lease for the new tenants.  That way all would be on same lease/terms.  If you don't like the current M2M lease, make all tenants sign a new one (including original husband).  As others mentioned, make sure to screen the new tenants.

Dale Walker · Answer

John Chea

I recommend that you screen any new roommates they want to bring in. Filling out the application and getting their information is just the first step. What will you do when the husband and wife don't like what the roommates are doing and move out. Then you have 2 tenants whom you know little about, you do not have any formal agreements with, and they decide to squatt on the unit. It will cost you alot of money to get them evicted and out. Have them fill out an application and screen them. Then have them sign a lease even if it a month 2 Month lease. They will then be bound by your expectations and conditions.

Thomas S. · Answer

First learn your state landlord tenant regulations. You are operating a business and are obligated to know the law.

Screen the tenants if you wish to keep them otherwise give them notice to non renew. You will need to establish strict screening standards and learn how to properly screen applicants.

Whether you keep them or find new tenants I would strongly advice you only offer M2M leases considering you are a novice landlord.

Dale Walker · Answer

I assume you inherited the 3 new tenants when you bought the property. Introduce yourself to the new tenants. Have each tenant fill out an application to get their information.  Next, get them on a lease to agree to your terms. If they refuse to sign a new lease, give all of them notice of termination and find new tenants which you know will be good.

Thomas S. · Answer

Call the tenant immediately and inform him they may not move in until they have been fully screened. If you accept them you must draw up a new lease with all tenants equally responsible for the full rent. If you only have one tenant on the lease and he moves out you are stuck with two tenants not responsible for paying the rent and no lease.

Good luck with that. My advice get rid of the present tenant and find new ones that can afford the place.

John Chea · Answer

Thanks for the replies,  I should clarify that the husband and wife were on the original lease.  I have read the lease they signed.  Is it correct even though they are on M2M they still must abide by the lease agreement signed? And even though he has gotten roommates now, he is solely responsible for the rent payments?

He has just notified me the new roommates were moving in, I have not met them or even have their names yet.  I want to keep them on M2M, so doing a new lease application seems needless,  However, shouldn't I gather some information from the new roommates and provide them some terms of the lease they must abide by?  Please add, anything I am missing.

When a tenant moves out and new tenant moves in.

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