Are there restrictions on renting to large families? Smart?

Question

Hey everyone, I could use a little advice from the community on a rental property I currently have listed. I can probably guess which direction most of the advice will go, but I am definitely a bit torn on this particular situation.

The property is a 3 bed/2.5 bath SFR in an A class neighborhood. I listed the property for rent and had a viewing and subsequent application to rent the next day at full asking price, providing a 30% buffer over PITI obligations to account for all expenses.

It turns out, the family is relocating temporarily because the mother has been diagnosed with stage 4 cancer, and they are undergoing clinical trials in the area. In speaking with the applicants, both are very well spoken and friendly, and came prepared with an extensive list of references, including past landlords.

The biggest issue I’ve run into is they have 6 children. I only have a 3 bedroom house to rent including the master, about 1988 square feet in the entire house. And to compound the crowdedness, both of their mothers were planning to alternate long-term visits to understandably help out while she undergoes treatment.

I’ve tried searching maximum occupancy standards for the state of NJ, and I’ve found lots of conflicting information, but I’m sure a family of 8+ has got to be pushing it.

To compound the situation, they have a poor credit history from mistakes when they were younger, which have since improved. Since they are relocating, the father will be between jobs until he moves up as well. Their children are all adopted, so they get a guaranteed $3500 subsidy each month to support them. Combined with the father’s current job, they clearly meet the 3x rule for income, but he will obviously need to seek out a comparable job in this area, until then, only guaranteed income is the adoption subsidy.

I realize from a strictly analytical standpoint this seems like a very risky chance to take. However it’s not always as cut and dry when you’re dealing with real people. Obviously I would love to help them out in a tough time, and with the lease I would cover all of my expenses and then some. From unofficial vetting (social media) they have a very strong support system and solid references, but it’s very difficult to ignore the elephants in the room.

Also, if I were to deny their application because of maximum occupancy, could that be considered discrimination against having children? Any and all inputs would be greatly appreciated for this situation. Thanks!

Brent Paul · Answer

The hardest part is hearing these stories and getting tugged at your heart strings. But remember this is a business and your house. I have to imagine your water bill will be skyhigh with 8 people living there. I have to imagine there will be quite the cleanup after they move out too. Think about the neighbors around it. Do you think they will be ok with it or will someone lodge complaints with the city? Where I live you only get so many complaints and then the city gets involved.

Me personally I would stay clear of them.

Zoran Stanoev · Answer

@Steve Borodin this might sound cold-hearted, but it sounds like you're going to rent your place to someone unemployed with six kids. Did you really dig into the references and prior landlord? It definitely sounds they're trying to pull at your heart strings. I'd make sure you're making a decision with your head and not heart. Good luck either way.

Russell Brazil · Answer

You need to determine your local occupancy laws. These will typically be on a city/county basis and not statewide. Many locations will have a typical 2 per bedroom plus 1 rule in place. So 2 BR's allows 7 occupants. However some places will have it based on square footage. Also common if the individuals were unrelated is only 5 unrelated people.

Simply call your local housing office and ask what the occupancy standards are for your locale.

Amy Beth · Answer

@Steve Borodin. I would deny them based on poor credit to avoid any issues with discrimination. Six kids with a sick mother will cause damage to your property. The mother will be busy getting her treatments and resting and not properly supervise them. The dad will be busy working and trying to keep his sanity with a sick wife and six kids.

And they may fall behind on rent due to medical costs and buying takeout food when no one has the energy to cook. And the dad May have a problem keeping a job too with all of his family responsibilities and new employers not usually being accommodating of time off requests. You already feel bad about denying them so would you really evict them when they start paying late and the. Miss a rent payment and come to you with a sad story about why they will need to pay later.

It would be a bad business decision to accept them. Deny their application and find someone whom will

be able to pay the rent and take better care of your property.

Michael Noto · Answer

@Steve Borodin Occupancy limits are typically dictated at the town/city/municipality level and not the state level. A simple call to town hall where the property is located should answer this question for you.

This is a classic example of why having minimum screening requirements is a good idea for a landlord because it takes some of the emotion out of this situation. I would recommend implementing them and getting them across to anyone who inquires in the first convo you have with them.

Martin Neal · Answer

@Steve Borodin not Here in Illinois, no but that could be different where you are at. I would consult an attorney if it really concerns you.

Steve Borodin · Answer

@Martin Neal I definitely hear what you’re saying. Are you familiar with any kind of family discrimination laws that come into play here when limiting the number of occupants if they’re all immediate family?

Martin Neal · Answer

@Steve Borodin There is too much baggage here. Run your rental as a business. I have strict habitability rules that says no more than 2 people per bedroom. So six kids plus adults is two many people in the home. You don’t have room for chances with poor credit. Simply tell the potential tenant that you are going in a different direction and thank you for applying. If they ask why, they explain your occupancy standards and rules. Good luck.

Steve Borodin · Answer

@Rachael Agruso there are others interested in viewing the house, but that’s the only application so far. I would be paying the water bill, which works out to about $30/mo. They pay all other utilities.

Rachael Agruso · Answer

There is a lot of baggage here- Do you have any other applicants? Will they be paying the water bill?

Are there restrictions on renting to large families? Smart?

Are there restrictions on renting to large families? Smart?

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