Found out a person not on the lease is living in my rental

[Jason Hines]

I’m a new landlord. I just purchased my first duplex in October and I live in one unit. The tenants in the other unit have been here for 8 years. The seller raved about how great they are and I have had nothing but good experiences with them so far. They keep their unit clean, are not loud, took care of snow removal during the storm last week.

Their lease ends on 1/31/21 and we have already signed a year extension for just the two tenants starting on 2/1/21. I just found out that a 3rd person is living there.

What should I do? I think we need to amend the lease and add the 3rd person. Should I also be raising the rent? The only utility that I pay for that would be affected is water. But we haven’t got a water bill yet to get a baseline.

Any and all advice would be greatly appreciated!

[Filipe Pereira]

Originally posted by @Jason Hines:

I’m a new landlord. I just purchased my first duplex in October and I live in one unit. The tenants in the other unit have been here for 8 years. The seller raved about how great they are and I have had nothing but good experiences with them so far. They keep their unit clean, are not loud, took care of snow removal during the storm last week.

Their lease ends on 1/31/21 and we have already signed a year extension for just the two tenants starting on 2/1/21. I just found out that a 3rd person is living there.

What should I do? I think we need to amend the lease and add the 3rd person. Should I also be raising the rent? The only utility that I pay for that would be affected is water. But we haven’t got a water bill yet to get a baseline.

Any and all advice would be greatly appreciated!

At the bare minimum you should run a background check on this person and have them added to the lease. Raising the rent based on the number of occupants is a tough sell. If I were you, I would look into if that's some kind of protected FHA aspect. I don't think it expressly says that it is, but it just feels like it's in the grey area. Imagine taking a family of 3 vs a family of 4 solely because of the extra person in the family, assuming that the occupancy standards for the dwelling allowed for it. I dunno, just doesn't "feel" right.