Should I lease to 3 individuals when 1 doesn't qualify?

Question

I've received an application from 3 individuals who live together. The first two are a couple with a baby and would qualify for the home individually (each income separately is more than 3x monthly rent, etc.). The third person is a friend and live-in babysitter, has a part time job that doesn't meet the income requirement and had an eviction filed 3 years ago. The story is a relationship was ended and this person was left with an un-affordable lease.

I like these folks, they have been forthright about everything and the screening otherwise checks out, but not sure how to best handle the situation? It's obvious the couple are helping support this individual, but also receive babysitting while they both work full time. Could I make a stipulation that this person does not qualify on their own and must vacate if they do? Have the third person sign the lease or no?

Roy N. · Answer

@David Moore

Things may be different in Indiana than here, but your tenants signatory to the lease are collectively and severally responsible for the obligations of the lease.   If one of them leaves and the other two are able to carry the lease, then the lease enures.

I'm guessing if the Nanny moves out, you would have no issue - in this case, I would execute an amendment to the lease to remove the Nanny. Now, if the father were to bolt and you suddenly have a single Mom - who will need her Nanny even more - your lease should still be fine, but I would not remove the father from the lease in this scenario.

David Moore · Answer

Thanks everyone for the replies. I guess my real concern was somehow getting stuck with someone who I would not have rented to on their own to begin with. My qualifications say no evictions. I want my screening to be rock solid, but the thing I am still trying to wrap my head around is when you have 1 or 2 qualified people, you are really just making sure any additional occupants are not criminals or have other history which will negatively affect your property. Income/credit don't matter as much since they will not be paying the bills.

The idea to re-evaluate anytime there are changes to occupancy is a good one. In reality, since they leased together they must stick together and I am not legally obligated to continue the lease to the end of the term if one or two of them leave, right?

Roy N. · Answer

@David Moore

You have two applicants who each earn at least 3x the rent and a third who is their nanny (and likely their employee).   If the two applicants pass all your other screening criteria, then I would offer them a lease.

Since/If the nanny is also of the age of majority, we would require them to be named on, and a signatory to, the lease as well.

Kyle Hipp · Answer

I would rent to them and have them all on the lease. If one wants to move out then you would assess at that time if the remaining two can qualify as to whether you will accept that change. That power is in your hands. They cannot move in and then the couple get off the lease without your permission. So I see no problems whatsoever. Just be sure that the qualified couple is actually moving in not just saying they will to get the babysitter approved.

Jeff S. · Answer

The reason they most likely are together is because alone they can't qualify. I prefer to see at least one strong tenant though. Have 2 units with 3 women who each are low income but great credit and have been great payers.

Chris K. · Answer

From what I've read I'd have no problem renting to them.

They make 6x the monthly,  you said you like them and they've been upfront. I wouldn't place too much concern on the third person.

Colleen F. · Answer

I would lease to them given the income. Think about it this way, if there was a couple with a baby and only one was working would you turn them down because one person did not qualify on income?  The only thing I would be unsure about is putting the babysitters name on the lease,  I wouldn't except where you list occupants but maybe someone who knows your local laws can comment.   I would however verify that the eviction story holds true as being for non-payment and there were no other problems.

Bill Gulley · Answer

If two qualify, why not lease to them? :)