Why Is Allowing Tenants To House Non-Verified People Bad?

Question

My wife and I have many discussions about being future landlords, and the one topic we butt heads on is if it's okay to let your tenant have someone live with them for an extended period of time. Her biggest argument is that the tenant is renting the home, so they're paying for it, so they should be able to house a friend or family for extended periods without having them being cleared or verified.

I made some headway when I presented the fact that the home OWNER owns the house. If someone lived with you in the basement, you'd be rather uncomfortable (to say the least), having another person that you didn't know living down there. That example is slightly flawed since you aren't living in all your rentals.

I would like help explaining this to her, but I can't come up with reasonable examples or reasons that make real sense. I'm looking for reasons, examples, or personal experience whether good or bad.

Thanks in advance from a BP reader, and future contributor.

Kevin Sobilo · Answer

@Ethan Armstrong, there are a number of reasons its bad to have unauthorized occupants. I certainly won't hit on them all but I think I can give you a few.

Some municipalities try to make the landlord responsible for whatever happens on the property. A municipality local to me had a "one strike" ordinance for a while where if anyone on the rental property was arrested (not even convicted) of a drug or firearm offense they would shut down the unit for 6 months so the landlord wouldn't get any rent. The person arrested didn't even need to be a tenant. This is a rare example, and this specific ordinance was eventually struck down.

In multi-family rentals, many times the landlord pays for some utilities because they aren't individually metered for each unit. So, if you as the landlord are paying the water bill and there are 3 occupants in each unit instead of the 2 that are on the lease, your water usage will be 50% more than expected and you will be paying for that.

Another reason is WHY people bring in unauthorized occupants. Many times its because these people would not pass a background check. There are many reasons why you might not want a violent felon in your property. The liability of having illegal activities going on, damage to the property, even the affect on neighbors.

You're example of living in the basement is funny because my first experience with this issue happened when a neighbor informed me that a tenant had moved a roommate into the UNFINISHED basement. I scheduled a walk through and confronted the tenant about it. I could not in good conscience allow someone to live in an unfinished basement.

To your wife's point, I agree with her in principal. I want to give my tenants quiet enjoyment of the property. My rentals are single family homes so utilities are not an issue. If a tenant wants to have someone come live with them (and that has happened), they just tell me who it is and I do a background check. If we want to be formal about it, we might even add them to the lease. If its near the end of the lease, we might just address it upon renewal.

So it is not onerous for a tenant to address this with a landlord if they have a good relationship and the lines of communication are open. I've had a number of tenants do this and I don't think I've had to deny any of them.

Wesley W. · Answer

As a landlord, you want to have control over your asset.  If unauthorized occupants are in your property, you don't have control.

Let's say the legitimate tenant you have vacates the property  (with or without notice) but this extra person remains.  Now you have someone in control of your rental unit whom you have not vetted and do not have any personal information on.  This non-screened person starts selling drugs, picking fights with your other tenants, causes your door to get kicked in by law enforcement, etc.  Oh, and they stop paying rent, to boot.

You'll be forced to evict, but here's the rub: you'll have a challenge serving them with legal papers if you don't even have their legal name, and it'll be impossible to collect without any of that information, either.  The dossier on your screened tenants becomes invaluable in cases where you have to proceed legally, plus you've had a chance to see what kind of person they are before allowing them to live under your roof.

You can tell your wife tenants can have the freedom to make decisions about who lives with them once they purchase a property of their own.  Do we all remember hearing as children, "my house, my rules?"

Don't worry - it's a mistake you'll only make once.

Nathan Gesner · Answer

I had a renter with excellent income, credit, job history, and Landlord references. She moved in a new boyfriend without an application or permission. We discovered it, did a quick Google search, and learned he was a felon and registered sex offender.

Another woman with two young daughters moved in a boyfriend that was a registered sex offender. He had molested his own daughters, about the same age as hers.

Another tenant moved in and then quickly moved in her cousin who was a drug dealer. We found out when a neighbor reported the heavy traffic.

Another tenant was an elderly woman that moved in her 45-year-old son. He was an alcoholic and out of work. He started harassing neighbors to include stalking one of the female residents.

I manage hundreds of rentals and can assure your wife that she is absolutely wrong on this. It is very common for people to avoid the application process because they have something to hide. If a dangerous person resides in your unit, you may be held liable for their actions. You may lose good tenants because an unknown bad tenant moves in. Your unit can turn into a drug den, whore house, unauthorized business, or a crash pad for your tenant's 14 closest friends and relatives.

Control your asset or you will come to regret it. Your lease should limit how long guests can stay (mine says no more than two weeks in any 6-month period). Any adult staying in the unit longer than that must apply, be approved, and sign the lease before they move in. I also have a $50 penalty per day for violations and it is back-dated to the day of discovery.

Matthew Paul · Answer

Ok  You rent the house to me , a single guy . You think I am great .

I rent it out AirBNB ........

I am the president of my fraternity I turn it to a frat house

I start a recovery house and rent to recovering drug users and drinkers

I move my father in who is on parole for murder

The list goes on

Bob Woelfel · Answer

I agree with all of the above.  You need to have the name and information of everyone that lives there.  They need to be screened and you need to be able to contact them.  We have a clause in our lease that says tenants can't lease out the property on AirBnB or any other rental site.  We also have language spelling out how long guests are allowed to stay for in both days in a row and over the course of a year.  This can be difficult to enforce and prove, but you still need to have it.

Example...We had a woman who moved in her son without letting us know.  Turns out he was a felon, would drink outside the apartment all the time.  There was a single girl living next door and they shared a common patio area outside of their apartments.  He entered her apartment when she had her front door open with just the storm door closed on a nice summer night.  He was drunk and she felt very threatened.  She calls me and I didn't even know at the time he was living next door.  We had to threaten eviction if they didn't get him out immediately.  Thankfully they did and everything went back to normal.

You need to be in control of who is living there.  You signed a lease with your tenant.  You didn't sign it with whoever else your tenant decides to bring in.  I can't stress this enough.

Why Is Allowing Tenants To House Non-Verified People Bad?

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