I just bought my first rental and found out today that one tenant is planning on leaving in a few weeks. She currently has a niece living with her (I inherited them from the purchase and the niece is not on the agreement), and the niece wants to stay. The niece is probably 21 at the oldest, so I'm a little reluctant based on what I hear in regards to renting to college aged tenants. The aunt just mentioned this all today and wants to forgo her security deposit and transition it to the niece. What do I do about the security deposit? Do I have the niece fill out a rental application and new lease? Not sure if this is a common thing. I had originally planned to raise rent when one tenant left, so not sure if this is the best opportunity or not?
Any suggestions or advice would be helpful!
I would have the new tenant apply. I would screen her as I would any other tenant. If she pass YEAH, you have a new tenant. If not, than you explain that she doesn't have X. This way you have followed fair housing being fair to both parties. At the end of the day this is a business, you don't want to turn down a well qualified applicant. On the other hand, you don't want to get a mess.
It is important to know the landlord-tenant laws in your state and abide by them. In our state, whether or not the niece is named on the rental agreement she would already have established residency by living in the unit for a certain length of time. I believe that is true in most states. So you need to consider that the niece may already be a tenant and has all the rights of tenancy. You can't just tell her to move. You must follow legal notice procedure.
If she is age 18 or older, you can enter into a rental agreement with her. If the aunt leaves, the security deposit would stay with the unit until it is fully vacated anyway. It is not uncommon for people to move in and move out overtime. We handle this by having the tenant that is moving in (or in this case staying) complete an application and we do a background check. If she qualifies, then you enter into a rental agreement with her alone, after you first terminate the rental agreement with the aunt. Which you can do by mutual agreement.
If you need more security deposit to cover your risk of renting to the niece, then ask for it. If you need to raise the rent with the new agreement, then do so. But whatever you do, don't mention age as a factor. You can not discriminate on the basis of age. You can however discriminate on the basis of rental history, income history, credit history, and legal history. Be sure you are fair and don't make assumptions.
Make sure your new rental agreement is comprehensive and you are clear about the terms of tenancy. Then be fair, firm, maintain the unit, respond to tenant needs in a timely manner and be swift in enforcing the rental agreement if a tenant violates the terms.
So for a follow up. I've tried getting ahold of the current tenant a few times and She will not call me back. I've shown up there several times and haven't found her. Another tenant told me she has not stayed there for over a week, but that the niece is still staying. The rent is due on the first and there was nothing in my mail. Itbwould seem that she's going to stop paying. What should my next steps be?
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