Thank you all for your responses.
Charging a Roommate Switch Out Fee may be our best approach. This way the extra fund can be used to cover any disputes from the newest roommate or damages that may have missed inspection. Of course, if they didn't want to pay the switch fee, they could always move-out and sign a completely new lease with a new deposit and that would allow us to perform a full inspection as usual.
@Marcia Maynard Thank you for the suggestion of the switch fees. I also like the idea of adding a clause in the addendum about reporting damages and assuming risk. We don't want to offer month to month leases because these are entirely college rentals and we like to keep our leases in the summer cycle to stay in line with the college market.
@Sam Leon Not frat houses, these would be 2 and 3 bedroom condos/townhomes/houses. This problem surfaces mid-lease as well as when they want to renew with a new roommate. It doesn't happen all the time, but it is a mess when it does. By common areas, I am referring to the living/dining/kitchen/hallways. When one moves out it is easy to inspect and charge for damage in their bedroom but it is a little more difficult to determine who is responsible for damage in these "common areas", especially while two are still living there.
@Colleen F. You have a very good point there and unfortunately it's part of the business we are in - if they don't get the full deposit back they are never happy. A lot of our tenants are coming from these corporate owned developments with on-site management that allow little to no deposit and individual leases. It spoils them to an extent. As long as they leave the building standing they feel like we should return 100% of the deposit. The security deposit required on our properties is the equivalent of one month's rent. We also require our tenants to have the carpets professionally steam cleaned when moving out. They can either provide us with the receipt or have us do it and deduct the deposit. There is often cleaning and painting required as well, which we do factor in wear and tear for their length of tenancy and we do note which areas required what in the SD return so that it helps them divide the deposit as necessary. We also have them return a move-in inspection sheet within 2 weeks of move-in and walk through inspections are available upon request.
@Elizabeth Colegrove We also have a clause for breaking lease, but the majority of the time they are wanting to renew, just with a switch of roommates. We are hesitant to cancel and start new leases in periods other than the summer months, because in order to keep the leases in the summer cycle we would then have to sign shorter/longer leases than the standard 1-year, which individual owners don't love because of their leasing commissions - they would then run the risk of paying a leasing commission twice in one year.
Again, thank you all for your responses. Very helpful information. I am going to put some thought into the switch-out fee, although my first concern would be them switching roommates without telling us to avoid the fee. Would need to add a clause to the lease and roommate switch addendum that put emphasis on the original roommates being held financially responsible until all parties have signed and fee has been paid.
Thanks,
Bryant
