Adding an unauthorized tenant to lease & rent increase

6 Replies

We lease out a SF home in which current single tenant has resided for 4 years with minimal issues.  This is a no-pets property, clearly spelled out in the lease.

The neighbor contacted me to complain about a dog that's been in the unit for about 3 months & says it belongs to the tenant's family that has apparently moved in. 

We called tenant & she agreed to remove the dog & I mailed her a notice of lease violation.

At the same time she confirmed her child & 2 grandkids had moved in while relocating to the area to look for a place to buy. However, she also said the child is having a hard time securing a down payment. (Not surprising in our overpriced market.)

We've decided to work with the tenant & have her child submit an application & we'll run the usual credit/background reports.

I'm not thrilled to have 3 additional tenants because of added wear & tear.  Tenant does pay her own utilities/garbage. 

I've also been remiss in not raising rent for 3 years because I'd prefer to keep the tenant rather than have turnover.  (Yes, I know - my bad)

My partner wants to raise the rent if/when new tenants are added to lease. 

Is this legal or is it discrimination based on family size?I could just wait & raise it later, I suppose.

Would it be legal to raise the SD based on number of people in the unit?

*Thanks in advance for any thoughts on this subject.

If you want to add tenants and raise rent it would be easiest to terminate the old lease and draw up a new one. If everyone is in agreement then everything can be negotiated.

Oh, Duh!  Why didn't I think of that!  ;-)

Thanks, Max.   

You should not charge rent based on tenant count, it is discriminatory.  Charge extra for pets, not people, and especially not kids.

Consider starting a policy of evaluating and raising rent annually.  Stick with it.  We raise rent to 50% of the gap between current rent and market rent, to make progress but still reward long term tenants.

Long term problem free tenants are good, but tenants who so flagrantly break your rules and disrupt the quiet enjoyment of neighbors are not worth fighting for.

You will be makin a mistake adding the additional people to the lease. They are not at all like your present tenant. They are leaches and will likely cause considerable stress compared to your past 4 years with your tenant. The drama is about to begin.

This a mistake you will regret.

Just to update:  We offered to screen the prospective tenants & sign a new lease if they passed screening. They were only interested if they could keep the dog.  So it was 'no deal'.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here