Investor · Oak Park, MI · Member since 2014 · 299 posts · 47 votes
Hi guys,
It's been a few years since I had to look for a new renter, I'm strongly considering a couple, one make 45K, the other 60K, both with stellar credit reports (rent is $1,325). They have been together for one year and it's going to be the first time they live together, so it wouldn't be totally far off for them to realize that they're not compatible once they start living together and break up.
So how should I handle this? Should I just put the higher earner in the lease as being the one responsible for rent or have them both as being responsible? In the case that they have a fight and break up I can imagine the problems trying to collect half from both but if one is responsible I can see one leaving and the higher earner staying and keep paying while maybe trying to find a roommate.
Am I far off? How do you guys set up your contract with this situation?
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
10y
@Roy Gutierrez Don't overthink this. They both have good income and good credit so they both go on the lease. Explain to them that you only want one payment per month for the rent and that if the ship goes down they are both going down.
Good people with good credit will pay their rent even if they break up.
Investor · San Pedro, CA · Member since 2015 · 17 posts · 1 vote
10y
Being new to this could be wrong but, I would think if they both have stellar credit ratings neither one of them would just let credit go easily. Not easy to get stellar credit so I would put both of them on Lease this way can hold both of them accountable .
Lowell, MA · Member since 2014 · 260 posts · 99 votes
10y
They are both living there and they're both adults put them both on the lease. Having more than one person accountable for money to you is a far more desirable position.
Investor · Century, FL · Member since 2015 · 950 posts · 603 votes
10y
You put both on the lease.
Whether you need both to qualify for the rent individually is up to you, and frankly, we don't have a set rule for that. If a new couple impresses enough, sure we'll do a joint income, if we think it's a roll in the hay gone wrong, we'll need both to qualify individually.
With both are liable, even if one leaves the house, they are both liable.
Investor/Landlord · Farmington Hills, MI · Member since 2011 · 1k+ posts · 1k+ votes
10y
@Roy Gutierrez, absolutely have all adults sign the lease. It isn't just income that is important but collectability. If you are owed money at the end of the lease it will be easier to collect on any judgment if you have multiple sources to collect from. I had one couple move with money owing. They probably though they would get away with it because they didn't leave forwarding addresses (they split up and moved to different places). I was able to easily get a default judgment against both parties. I never even tried to find their addresses and was able to collect. I didn't bother going after the man since I didn't know where he lived or worked. I knew the woman had been a supervisor at a company that she had worked at for 15 years. I simply sent the garnishment paperwork to her employer and collected my judgment in full.
Architect · Papillion, NE · Member since 2015 · 1k+ posts · 840 votes
10y
Anyone over 18 goes in the lease and is screened by your typical process. Deposit stays with rental when one leaves. I would define the deposit better in your lease. Make sure you have language for joint tenency.
Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
10y
Both on the lease and both are responsible for the full rent amount. That's what "jointly and severally liable" means. You can collect from either one or both. Full amount.
Investor · Cathedral City, CA · Member since 2014 · 481 posts · 170 votes
10y
I have seen something, new for me. A Roommate agreement.
Your lease agreement should contain proper language making all roommates that will be living in your rental responsible for the lease agreement’s provisions as Joint and Several Liable .
In addition you might use this roommate agreement.
Here are some common details that may be included in a roommate agreement signed by all tenants leasing your rental:
Division of rent between all parties
Utility cost splits
Maintenance responsibilities such as cleaning, yard maintenance, or repair requests
Both on the lease and if they break up make it clear the one that stays pays you the full rent. They can be responsible for getting the half from the other person.
I have had applicants in exactly the same situation many times and I have always chosen not to rent to them. I prefer more stable tenants. Let a less experienced landlord take the risk of breaking them in.
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
10y
@Roy Gutierrez Don't overthink this. They both have good income and good credit so they both go on the lease. Explain to them that you only want one payment per month for the rent and that if the ship goes down they are both going down.
Good people with good credit will pay their rent even if they break up.
Investor · Oak Park, MI · Member since 2014 · 299 posts · 47 votes
10y
Hey guys,
Thank you very much for all your help, I've been on the Vacation Rental bandwagon and almost made this rental a VR as well but decided that I wasn't ready to handle even more stress (and VRs are stressfull!).
On a side note, something funny happened, I'm ready to offer this couple the house but got an email 2 days ago from single professional lady and she mentioned if she likes the house she's ready to offer the entire year's rent up front! Well, I guess I'll make an exception to show the house one last time, can't beat one year's worth of rent up front if she works out!
Guy with Great Hair · Austin, TX · Member since 2013 · 2k+ posts · 4k+ votes
10y
put them both on the lease so you have leverage in case they split regardless of the outcome.
Make sure to tell them you will return the security deposit how it's given. So if the guy gives you a check, from his bank, you're giving it back to him. Vice Versa for the chick, and if it comes in 2 checks for 1/2 each then it's super easy to refund even if they split up.
Vendor · Pasadena, MD · Member since 2016 · 43 posts · 24 votes
10y
Max Tanenbaum is correct. They are j&s liable. If they default, you can go after them both and let them figure it out after you have your judgment. Just make sure the proper language is in your lease agreement.
Do not be swayed by a flash of cash. If she is selected tell her your policy is to collect rent monthly and avoid the responsibility of holding her money in an account for her.
Cash usually means she is hoping to hide something in her past rental records. Screen thoroughly.
Very wise words, I scheduled them, they were late so I had to show the house along with the next couple that came on time. Had a negative vibe right off the bat (the only person I've shown the house where I had this negative vibe), when we went to the basement suddenly I see that the "husband" wasn't there, I asked her where is your husband, we are in my renter's house and we all need to be together for security reasons, I hear steps above, we all went up and he was there nonchalant; very, very shady, I don't think he had time to go thru the stuff of my renter but I think they were to no good.
Investor · Oak Park, MI · Member since 2014 · 299 posts · 47 votes
10y
One last question, I see that a lot of people take a "hold deposit" then at move in take the rest, sign the lease and then give the keys but what if I want to require the renter to pay everything and sign the lease now and then give them the keys when they move in in August?
It is completely your call as to how to handle collecting money. Just make sure you have all of it in your hands in a form of cash, no checks, prior to turning over the keys. If you are receiving checks you need to cash them 1-2 weeks ahead of turning over the keys to make sure they are not NSF. Never agree to any "payment plan" after the lease begins. If a tenant can not pay the full amount up front they are not qualified to rent.
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
10y
@Roy Gutierrez If you are leasing to two adults, you should put them both on the lease. Trying to predict what their personal relationship may or may not be is going down a rabbit hole you have no business being in. Business is business. The housing discrimination laws cover "familia status" Whether or not they are married or not is none of your concern. By making a decision to prefer one over the other you are setting yourself up for a lawsuit. "Fairness" in housing is the goal.
Set your income, and credit criteria as a guide, and use that. Be consistent.
St Thomas, Ontario · Member since 2013 · 575 posts · 408 votes
10y
@Roy Gutierrez Well it sounds that could be it, but I would be wary of a tenant who is busy asking for material of this nature. The truth is that most tenants would not know or would not care. A tenant that is prompting you to supply what may be mandated materials is a tenant who knows the system to some degree, and a tenant who knows the system could well be up to no good. Remember that they are at their best behavior in the application process. I would look very hard at any signs that the prospective tenant could be about to make trouble later on.
San Jose, CA · Member since 2015 · 4k+ posts · 3k+ votes
10y
One point of my criteria that I learned to include over time - if someone is late, without a phone call and a darn good excuse - denied. That person does not respect me or value my time. I didn't rent to people who didn't respect me or value my time.
And, I agree with roommates/couples you put them on the lease and then only do month to month agreements, because odds are, they will break up and you'll be dealing with this scenario.
The only times I didn't include all adults on a rental agreement, I then gave written permission to the tenant to have a long-term guest, which could be revoked at any time.
But, really trust your hinky hairs. If you get a hinky feeling, find any reason to deny. Because you'll find out why you had hinky hairs later. This is why having a M2M agreement is always best anyway, in my opinion.
Investor · Oak Park, MI · Member since 2014 · 299 posts · 47 votes
10y
Thanks @@Stephen E. it's a young couple, both very sharp, both read the entire contract, he just mentioned he got a booklet from his previous renter and was inquiring if he could get one, I should have asked him if he still had the one he gave him? I have no idea about that booklet, I'll search michigan government websites I guess.
Another question, they're paying first, last, and security deposit up front. Lets say a couple of months before the year lease expires they decide to go month to month, so since they already paid the last month, I imagine they don't have to pay the last month and then they start paying the month to month (so 1 payment gap) OR no gaps they keep paying and then don't pay the last month?
Murrieta , CA · Member since 2016 · 37 posts · 7 votes
10y
Hello Roy Gutierrez . It looks like a lot of great responses have already been give. I can only provide a personal experience from the renters perspective.
I was dating a girl for a year and we decided to rent and apartment together.
We both had good credit.
We both read and signed the lease knowing we were equally responsible.
After about 7-8 months we wanted out, and we want pretty bad. We ended up working on it and completed the lease because we knew we couldn't get out of the lease and our credit was very important to each of us. I can say it was a learning experience for sure for me and I'm sure many couples go through this, hence your concern. However, I know I wasn't going to ruin my credit now was she even though things got very uncomfortable.
Good luck!!
Specialist · Grand Rapids, MI · Member since 2016 · 1k+ posts · 611 votes
10y
I would be upfront with them what happens if one moves out but as a precaution make sure both are on lease but look at the less qualified of the two applicants and see if they still meet your criteria for renting individually. You have a good problem however. I also had a similar situation and what I did was I told them I would market house at same rent and would allow them to break their lease as long as they paid rent through the day that I found a new renter which up front I could not tell them otherwise when that may be. They were so happy they actually they gave me reviews and even referred me another renter for how I handled it.
Real Estate Investor · Tempe, AZ · Member since 2012 · 874 posts · 648 votes
10y
Roy Gutierrez our lease has a checkbox that says they acknowledge they are aware of the Arizona State Landlord-Tenant Act, and that it is available on the state's website. For our first few renters, I printed it out and gave it to them. Haven't done that recently; the disclosure is now sufficient to me.
The Landlord -Tenant Act is the governing document of our relationship. I have no interest in hiding it from them, and I would welcome a renter who wants to read it. It would make for less surprises in a dispute, as judges will rule according to the statutes in the act.