What would you do with these rental applicants?

30 Replies

Got a trio of educated young people (25-30) applying for a large $1750 2 bedroom in a gentrifying area, just the kind of tenants I want to push the neighborhood, rather than the typical working class family of 6 that used to rent these places.  Problem is one of them has a 3 year old eviction and several debt gone to collections in his report.  The other 2 are a couple, he's making $63-93k (depending on bonus) and she's a full time student at a good college working part time making perhaps $10k. He's paying $1k/m in student loans with a 750 fico.  They alone work out using 40x monthly or 3x yearly formulas, not counting his loans. 

It's a bad season to rent and this is top dollar, responses to a beautiful recently renovated place were slow.  My inclination is to put just the couple on the lease and make the deadbeat roommate their problem, and I won't be left with him alone if they leave. Thoughts?

If their gross income combined is 3X the amount of rent, it reaches that standard. Now, with the eviction and debts, if you want to consider them, you could ask for a higher security deposit? Or, you could make the lease shorter....6 months...3 months....month-to-month?

The first month rent is due after moving in is the test. If they come to you with excuses of roommate #3 doesn't have his fair share, that is not your problem. You file for whatever the first step of eviction is immediately. Don't wait the few days they promise to pay.

Your lease should state that it creates joint and several liability in the case of multiple Tenants. This means that they are all responsible. It doesn't matter if 2 say that they paid their share. That's their own deal. According to the lease, they're all responsible even if the rent is short by $20.

Originally posted by NA Beard:

ALWAYS put all adults on the lease.  Consider what happens of the couple moves out and he stays - - you have no control over him.

Is that really worse than him staying with leaseholder rights? It doesn't seem to give me any more rights or "control". My understanding of the law is in that case he would be a squatter that I could immediately move to evict. Inquired some of these same questions last year when a longtime tenant wanted to leave her apartment to her loser son. I was told he had no rights.

Originally posted by @Nicole W.:

 Now, with the eviction and debts, if you want to consider them, you could ask for a higher security deposit? Or, you could make the lease shorter....6 months...3 months....month-to-month?

 Unfortunately in NJ tenants are forever, you are required to renew leases. Are you advocating putting them all on the lease too?

Ugh...that law again? There's got to be a way to not be stuck with a tenant forever. There was another thread about apparently not being able to end leases once they're over in New Hampshire. If it's truly that hard to have control of your own property, I'm surprised anyone wants to be a landlord in those states.

Anyway, yes, I am advocating putting all people 18 years and older on the lease.

In Calif, any persons in residence and not on the lease has rights.  The only way out out is Unlawful Detainer and the so-called squatter / trespass approach rains down on the owner, not the squatter.

Bottom line, you have to know your State's Landlord / Tenant regulations and it's painful to do so after the fact.

@Johann Jells I agree with other, All adults need to be on the lease. All persons the will be living in the units should be listed on the lease, with children being listed as occupants.  This would be important if you ever need to evict them.

As for NJ tenants being forever, I would have you research that more.  My guess is that leases automatically renew (likely month to month), but with proper notice you can end the lease after the initial lease term.

As for the eviction and bad debt, I would ask for an explanation.  If there appears to be a good reason (divorce, medical bills, whatever you think is reasonable), I would rent to them.

Originally posted by @Nicole W.:

Ugh...that law again? There's got to be a way to not be stuck with a tenant forever. There was another thread about apparently not being able to end leases once they're over in New Hampshire. If it's truly that hard to have control of your own property, I'm surprised anyone wants to be a landlord in those states.

Anyway, yes, I am advocating putting all people 18 years and older on the lease.

 In NH it's really easy to evict. Leases are easy to break, for either the tenant or landlord, you only need to give 30 days written notice in order to break it. They're really not worth the paper they're written on, except that most tenants don't know that. 

As for evicting, it's a really simple process up here, usually only takes 2 weeks or so.

Originally posted by @Mike Wood :

@Johann Jells I agree with other, All adults need to be on the lease. All persons the will be living in the units should be listed on the lease, with children being listed as occupants.  This would be important if you ever need to evict them.

As for NJ tenants being forever, I would have you research that more.  My guess is that leases automatically renew (likely month to month), but with proper notice you can end the lease after the initial lease term.

As for the eviction and bad debt, I would ask for an explanation.  If there appears to be a good reason (divorce, medical bills, whatever you think is reasonable), I would rent to them.

 I'm well versed in the NJ Anti-eviction statute. leases must be renewed  or go MtoM if the tenant wishes, and rent increases cannot be "unconscionable",the interpretation of that up to the individual judge hearing the case. http://www.state.nj.us/dca/divisions/codes/publications/pdf_lti/t_i_r.pdf

Can anyone elaborate on how him being on the lease improves my situation over him potentially being a squatter after the lease has been terminated by the leaseholders?

Hi @Johann Jells ,

   I would personally never take the risk of someone with a past eviction in one of my units. If he is with them he will likely move in and just because only one eviction shows it doesn't mean he never got cash for keys or had a landlord sell the house to get away from him, I'm in Massachusetts and just like New Jersey our laws suck for landlords. My opinion is that you should not rent to any of them because if he ends up in there he could "teach" the others how to "live rent free for a few months".

All parties should be on the lease and the rent is due in full regardless of who it comes from.  I do a lot of rentals here in NJ the first few months of the year, so I would think that you other tenants shouldn't be too far away. Do you have the property listed with an agent or are you trying to find them yourself?  If on the open market, your tenant pool will naturally be increased.

I think what you describe is that all togeather they are a good tenants, but individually they may falter.

As mentioned, you need to put all 3 on the lease, joint and several, do that, one of them leaves, and you have an opening in NJ law to get rid of them all since they will have to cancel the lease. Keep in mind that JC rent control (if your building has to deal with that) is harsher than NJ tenant law.

In NJ you are not allowed to take more than 1.5 month security, so have them pay the security and pay last month's rent up front (this is allowed).

I agree that no one moves in January in NJ unless they just graduated, or just got evicted, so I would also pursue WHY they want the place now, also, as an added protection, I suggest you make this a 6 month or 18 month lease, with 12 month renewals... have the next tennant start in June, because that is when all the college graduate jobs start in NYC and apartments go like hoitcakes.

Thanks all.  Did a little detective work and I think what happened was he left early without legally returning possession, so they filed eviction and detainer, plus the difference between his security and the 2 months rent loss.

I just offered them the unit with 2 conditions, last month as Mark helpfully suggested (didn't know that was legal) and that they use an automatic ACH payment or a service like Cozy.

I was planning on asking them to sign at least a 15 month so it's up in the spring next time. This winter thing sucks, don't face it with my 1BR units in Downtown JC that rent like hotcakes. 

And Cheryl, I use Craigslist and show myself. I find there's no better time to chat up and get to know a prospect.

Originally posted by @Johann Jells :

Got a trio of educated young people (25-30) applying for a large $1750 2 bedroom in a gentrifying area, just the kind of tenants I want to push the neighborhood, rather than the typical working class family of 6 that used to rent these places.  Problem is one of them has a 3 year old eviction and several debt gone to collections in his report.  The other 2 are a couple, he's making $63-93k (depending on bonus) and she's a full time student at a good college working part time making perhaps $10k. He's paying $1k/m in student loans with a 750 fico.  They alone work out using 40x monthly or 3x yearly formulas, not counting his loans. 

It's a bad season to rent and this is top dollar, responses to a beautiful recently renovated place were slow.  My inclination is to put just the couple on the lease and make the deadbeat roommate their problem, and I won't be left with him alone if they leave. Thoughts?

Hello Johann,

This is an excellent question! When determining if applicants are a good fit for your unit, you want to make sure you look at the picture as a whole. Does the good outweigh the bad? 

Always have all adults on the lease. If that guy causes any problems you will not be able to take legal action against him. He will be free of your regulations.

If all of them make enough money to cover their bills and pay the rent then I don't see why you should not go with them. Assuming their background has checked out, you might want to consider a double security deposit. 

Also, do some research into that eviction. Was there any judgment against him? If so, did he pay it?

Make sure to look at the whole picture. If you still have a good feeling about it go ahead with them.

I get applicants like this all of the time. You want to make sure to review EVERYTHING. Your unit is important to you and the last thing you want to do is rent to someone who will cause problems.

Please let me know if you have any questions.

@Johann Jells Any Housing Court actions, No way!

It's a long stretch from a disagreement to Housing Court.

and by the way be consistent with your approval process to avoid a Discrimination suit;-0

Originally posted by @Mike Hurney :

@Johann Jells Any Housing Court actions, No way!

It's a long stretch from a disagreement to Housing Court.

and by the way be consistent with your approval process to avoid a Discrimination suit;-0

 It appears he wasn't actually "evicted" as in owed them money and having to be crowbarred out, it's just a management company doing it legal so they weren't exposed to accusation of taking illegal possession. He had no idea what the legal repercussions of not formally surrendering the keys were. Had he done so, they likely could not have cared less about his leaving a month early as long as they kept his security, and would not have filed an eviction.

Honestly, I did stupider things when I was in my 20's.  I guess I'm hoping he's matured in the last few years and his friends will keep him from capsizing since they're in the same boat as him now.  I'm guessing that when the girlfriend graduates and gets a nice job in Manhattan they'll kick him out.

Good luck with the tenants! If they want the apartment they should gladly accept your conditions. With last months rent up front they will be less likely to break the lease. Remember we can only have 1.5month for security deposit in Jersey, but you can ask for whatever condition you want to lower your risks.

Originally posted by @Brian Lee :

Good luck with the tenants! If they want the apartment they should gladly accept your conditions. With last months rent up front they will be less likely to break the lease. Remember we can only have 1.5month for security deposit in Jersey, but you can ask for whatever condition you want to lower your risks.

 They have accepted the terms, with a 15 month lease.  We have usually let our Downtown tenants go month to month after 1 year, but the Heights is different, seems more seasonally sensitive. I wonder if there's a legal way to let someone go MtM with a winter blackout?

Originally posted by @Johann Jells :
Originally posted by @Brian Lee:

Good luck with the tenants! If they want the apartment they should gladly accept your conditions. With last months rent up front they will be less likely to break the lease. Remember we can only have 1.5month for security deposit in Jersey, but you can ask for whatever condition you want to lower your risks.

 They have accepted the terms, with a 15 month lease.  We have usually let our Downtown tenants go month to month after 1 year, but the Heights is different, seems more seasonally sensitive. I wonder if there's a legal way to let someone go MtM with a winter blackout?

Great job Johann! I'm not too sure about the MtM question you have, but it sounds like you're on a good path with these tenants! a 15 month lease is great! I hope they work out the way you hoped and they end up renewing!

Best of luck to you!

@Johann Jells

I guess I'm hoping he's matured in the last few years and his friends will keep him from capsizing since they're in the same boat as him now.

If you've rented to him, I guess this is the best way for you to learn this lesson. I'm a lot less optimistic about people wanting to rent from me than I was when I started. I now "listen to my gut" and hope you do;-)

Originally posted by @Mike Hurney :

@Johann Jells

I guess I'm hoping he's matured in the last few years and his friends will keep him from capsizing since they're in the same boat as him now.

If you've rented to him, I guess this is the best way for you to learn this lesson. I'm a lot less optimistic about people wanting to rent from me than I was when I started. I now "listen to my gut" and hope you do;-)

 The "gut" can tell us a lot about tenants, mainly when you have been doing this for awhile! Great advice.

Knock on wood, my gut has done well so far, 18 years in and now 12 units I've not had a serious problem with a tenant I've placed, only legacies.  I've rented to 2 who had past bankruptcies, and went with my gut. They were fine tenants.

Just had it brought to my attention this unit's area went up 15% last year according to Zillow. Not bad.