Unathorized Tenant in owner occupied duplex-Do I need to approve?

Question

Hi all!

I have an inherited tenant living next to me in a side by side duplex since I moved into in January. She lives there with her 30 year old daughter and 16 year old niece. She seemed to be a good tenant at first and kept the place in good shape, but then this guy started staying there almost every night. Near the end of February is when her old lease ended with the previous owner, so while I was getting her new lease ready I asked her if she has another person living there now and needed to be added to the new lease. She said no, he has his own place.

Well now he's been staying there nearly every night since then, is there 24/7 (before the quarantine happened) so I don't think he has a job. I've had to go in there a couple times for maintenance issues, and since he's been staying there the smell has gotten out of control. I realized he's been smoking in the house, and then overcompensates with a LOT of fragrance. When their door is open I can literally smell their house a block away it's so strong. I told her there can be no smoking and it's a violation of her lease and she just said okay. I think now he's smoking in the basement, but it's pretty hard for me to prove since I can just smell it once in a while when I'm down there.

Point is, he's an unauthorized guest and I'm not too keen on him living there. Per her lease, it states anyone wanting to live there needs to fill out an application, meet my approval criteria, pay a $100 admin fee, and rent goes up $50 per month. What I'm wondering is, since she's the one paying the rent, how does that change my normal criteria of minimum income and verified employment? So pretty much the only things I'm looking for now is no criminal history or evictions? Also, since I'm an owner occupant I've heard I can pretty much choose who lives next to me rather than following a process for fair housing laws, but it still makes me nervous. Do I even let him fill out an application if I don't want him living there? What if it comes back with no criminal history or evictions? Do I need to accept him or come up with a reason why he can't move in?

Another thing, what if I deny him and he still stays there? With the pandemic going on I know there are no evictions happening with the courts.

Sorry for the book, just wanted to make sure you guys had the full background story. I appreciate any advice!

Jesse Lynch · Answer

Hey Brittany!  I'm an investor from the twin cities as well, and I happen to find myself in a very similar situation with the tenant of my duplex in Rochester (which I currently homestead).  She was inherited, and has been generally very nice and understanding, but also there is a guy staying there constantly, who is not on the lease.  She just asked if I could add him to the lease though, but now I'm struggling with justifying a rent raise, especially since she is paying during the COVID struggle.

Are you on a month to month lease, by chance?  If not, I probably wouldn't add him to the lease, and maybe wait until COVID passes, and then tell them you're ending the lease and get new tenants in place.  If you are month to month, maybe add him, get the extra rent while he's there, and then remove them later.A bird in the hand is worth more than two in the bush... unless the bird in the hand is actually two birds smoking inside and creeping you out.  haha.Just my 2 cents!

Adam Tafel · Answer

@Oscar Brooks - great tip on the FreshAir Sensor! Ordering a few of these now. The most frustrating part of a guest smoking in your Airbnb is having to prove it! This will simplify the process.

@Brittney Lundeen - I've been in your situation before, and completely understand the frustration. You can require an occupant to be added to a lease, add additional language to the lease, document communication, be direct, all good practices advised in this forum.

I would add "let it be, for now" to the list of advice. The kind of tenant who 1. allows another to occupy without permission, 2. is dishonest (or at least withholding) about his occupancy, and 3. allows him to smoke inside - probably not the best in the long-term. What can you do at this point? Not much. Creating a you vs. them situation is the last thing in the world that you want, although you want to take action after feeling violated.

Inheriting tenants can be tough, but it's always temporary. Smoke smells aren't permanent, neither are these people. You can do 100 things on paper to "protect yourself", but this situation is temporarily beyond your control, practically speaking. I don't say this to be dismissive or negative, I'm suggesting you pick another battle for now.

Best of luck!

Oscar Brooks · Answer

@Brittney Lundeen this is a tough spot to be in and COVID-19 and eviction rule changes makes it even more challenging. Especially in MN we tent to be very accommodating, but remember that this is a business and your investment is at stake.

I'm not a lawyer, so these are just suggestions, but I am a fan of being as explicit as possible in my leases. If not in there already, the next lease you write up should specify when someone goes from guest to tenant (4 nights/wk, is on site more than 6hrs/day...or whatever you think) so you remove as much subjectivity as possible. Even if he was a perfect guest, if he's there all of the time he is contributing to the wear and tear on the property, water use and utilities (even if tenant pays utilities your mechanicals are working more) so you should be compensated for that. Not quite the same, but if they were running a business from your property and 20 people showed up to work every day but left at 5 and didn't sleep over you'd want to change the structure of the lease.

Similarly, build in specific consequences for smoking in the unit. Fee of $X for cleaning fee or HVAC filtration (if applicable) on first offense. Forfeit of security deposit on 2nd offense. Termination of lease on 3rd offense. Again whatever you feel comfortable with in terms of escalation here.

No personal experience with this device and not sponsored, but I've looked into FreshAir Sensor previously for my Airbnb, and it is a simple plug and play device that detects cigarette smoke. You'd be able to collect empirical data that someone was smoking in unit or basement.

Last tip, get it all in writing. Even if you have an in-person conversation (from 6ft away), write a follow up email and say "Here's what we discussed today. No smoking. The next violation will mean I keep $X from your deposit for deep cleaning/paint. Guests are tenants if they stay over more than Y nights/week and need to go through the application process. etc. etc."

Good luck!

Kirk R. · Answer

I'd ignore it as long as rent is paid & I felt safe.

Good job on smoking reminder.

I'm curious about fair housing in owner occupied Duplex to quad also.

People have lives.  they date.  I stay out of my tenants personal lives.

I had one tenant move in.  She left her last place cause her landlord was telling her what time to be home.  what the what.

As Sue said.  I'm a month to month fan also.  they don't want to be there they should leave.  i don't want them there they should leave.

Cassi Justiz · Answer

Hi Brittany,

@Jesse Lynch had some great advice. I would say that even if she's on a longer lease, it would probably worth getting him on a lease now while you can. Your tenant may not be able to afford the additional rent increase. But I would at least try for it since you are now going to have to do smoke clean up as part of your make-ready. I would also say that you want to at least run a background check on him to make sure you know what kind of person you are encountering when you go into that unit.Once all of the eviction ban stuff blows over you can look into not renewing or getting them out based on breach of contract (smoking, etc).

Account Closed · Answer

So, did she sign a new lease or is she month to month?  If M2M, ignore it until you can just give her notice to move out.

If she's on a lease, and you really don't want him around, you're going to have to start giving her notices of breach of the lease and/or try to get her to move out.

This is why I only did M2M.  There's always a guy or woman who moves in.  I ignored it if there weren't any problems.  I didn't put them on an agreement.  That way, if my original tenant decided they wanted to break up with their lover and stay, it was an easy situation.  I never had a lover try to assert tenant rights with me.  But, if things got crazy and they both wanted to stay, I'd just give 30 days notice.

So, next time....just M2M, is my advice.  Sorry you're going to have to deal with this.  I'm sure it won't be fun.

Michael Robbins · Answer

I would (1) write a letter to the current tenant stating that rent will go up $50 per month as there is an unauthorized roommate residing in the home.  The letter needs to have an effective date.  In the same letter provide an option to prevent this extra $50 per month by requiring tenant to add on the roommate.  Next (2) I would require roommate to qualify with credit, income, and criminal background check.  If the new roommate cannot qualify with income then both people have to be ran together using the existing roommates income.

Amber Gonion · Answer

@Brittney Lundeen as an owner occupied duplex you are allowed to deny familial status only (children).

The important part here is that apply criteria evenly across the line.  Do you require all occupants to have a credit score above xxx?  Criminal history, evictions, and obviously income is covered.  For the future a credit score will tell you more about a tenant than if they can/will pay.   It is as useful as criminal history in predicting behavior.

At this point check your lease closely and gather evidence.  I would let them know the smoking needs to stop, and the new tenant needs to fill out an application.  Sometimes a face to face gets the point across.  I would not push the issue too hard until you are able to file for eviction again.  Collecting rent is better than an occupied building with no rent in most cases.

Brittney Lundeen · Answer

@Oscar Brooks That's a lot of great advice! I thought my lease was pretty good, but of course things keep popping up that I realized I should've added.

Unathorized Tenant in owner occupied duplex-Do I need to approve?

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