Can I charge potential tenant w/judgments an extra monthly fee?

Question

We normally do not approve applicants with any court records of evictions or judgments. I have a tenant who makes a good salary and qualifies except for history of past court judgments for non-payment. Can we charge her an additional premium monthly on top of her rent for the additional risk? If yes, what do we call it? Security fee? Rent insurance fee?

Long Dang · Answer

If there's a history for non-payment, it might be good to prepare yourself prior to taking the tenant in - a lot of landlords can opt to take first months, last months, and security deposit. This might help you figure out if they have the money up front.

It looks like in Michican, you can charge up to 1.5x the rent amount as a security deposit (http://www.legislature.mi.gov/...). Just make sure you're handling this compliantly so tenants don't come after you at the end of the lease.

Gail K. · Answer

Past court judgments?   How many?  This person is high risk even with a good salary.  Most would likely not consider her.  Some landlords would either request a double security deposit (if allowed in your state) or jack up the rent to take someone with a history of past court judgments...as well as providing only a month to month lease to be able to get her out quicker than an eviction should she go back to her previous habits.