Unauthorized occupant of rental property

[Ping W.]

Our single family house was leased out to current tenant from June 1st. There are 4 authorized people who were supposed to live there on the lease. They are consisted of the main tenant (a store owner), his younger brother (owner for another store), his nephew(store worker) and the brother's son. I went to fix something last Sat and found 6 sleeping bags in the house and one of our neighbor told us that he saw 4 young men moved in at the beginning of June with suitcases.  They have no furniture at all. 

In our lease, there is a Occupants clause saying "The stay of any other not on the lease will not exceed 7 days without authorization of the Landlord. Tenants will pay additional rent for the period of stay of any authorized occupant at the rate of $500 per month or any par of the month". I emailed them the issues I found and the charge of $1000 for June and July. I also asked anyone not on the lease to submit application form and application fee. The tenant said they would submit the application by Tuesday but I have received nothing yet. I call the tenant today and he told me he has to let his brother talk to me since he has not moved in yet.  His brother got made with me saying I was being unreasonable and asking me to speak to his lawyer.  

Other than unauthorized occupant issue, they have been paying rent on time so far and have given me a couple checks for future rent. The tenant has been the main contact person from the beginning. He has been corporate for the most part. I know they had unauthorized occupant issue with their previous landlord so I have emphasized this part with them when we signed the lease.

What I can do now? Any insight will be appreciated!

[Nathan Gesner]

You are clearly renting to a business owner and he's putting employees in the home.

Make it clear you are renting a home, not a boarding house or hotel. Only those authorized on the rental agreement can live in the home. Give him 72 hours to remove the additional renters or face termination.

Another option: explain that you're willing to allow the additional occupants if he's willing to pay. $100 per person per month would be an additional $400 a month or $4,800 a year. Maybe $200 per person? It all depends on how badly he wants the home and a place to stack the bodies (figuratively speaking, of course).