I'm considering renting to 3 young professional guys, before I've only rented to families so what was wondering the logistics of this situation. All 3 will be on the lease, in terms of payment I would like to designate 1 person that I need to receive a check from? Or should I be collecting 3 checks for legal reasons? What else should I be watching out for?
Always collect 1 check for the full amount . Money orders work well
You want to make sure that they understand that each of them is individually responsible for the entire rent. If 2 pay and one does not, the 2 that paid cannot say they paid their share and just evict the guy who did not pay. You only accept 1 payment of the full amount. It is the same with the security deposit. If someone moves out early the security deposit is not refunded or accounted for until the last person moves out. It is important that they understand this especially if they are young and have only lived in dorms where they were only responsible for their portion of the rent.
I see, any special wording in the contract? Anything special that you have to do when one of the roommates leaves?
Make sure it is one lease that spells out that all three of them are responsible for the entire rent amount. And yes, 1 check or money order is nice. I recommend dwolla.com for rent collection if you want to collect automatically. Still only take 1 payment that way.
Lynn, as far as the security deposit, if one leaves but then the others find someone else to replace him, I guess you can do an amendment to the contract to exclude the one that left, put in the new one, refund the money to the one that left and get a new portion from the new one, correct?
Thanks Aaron, I'll look into that website, my first renter recommended to deposit his payment into my account (what an amazing renter!) and since then I put it into my lease that I need the payment electronically transferred to my account a certain day of the month.
If one leaves the lease should be with the 3 new ones so a new lease or addendum. Also if one leaves they need to deal with the security deposit not you. Basically they pay the guy back his deposit from the new roommate. You could do an inspection if it is at then of a lease term and let them know what charges are associated with the repairs that would be taken from their SD if they were leaving but the security deposit is jointly given and returned because you don't know what roommate did what damages.
In the original contract I put an addendum that there will be a fee for all contract addendums. In NJ, the counties I am in are so friendly to tenants I have to rewrite every contract when there is an addendum and have everyone sign it . It takes time and time is money...
@Roy Gutierrez the term you are looking for is "Joint and Several". All tenants are responsible for the entire lease and the entire rent payment. If somebody moves out or somebody can't come up with their share of the rent it's up to them to sort out. You should request one check each month for the entire amount.
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