How to have a business sign a residential lease

Question

Hi,

I found a potential tenant who has an arrangement with their employer that the company will pay his rent as part of his compensation package. I spoke to the owner, he is willing to have the company co-sign to make sure they are on the hook for the rent. But, Just because there is an LLC doesn't mean they pay their bills. My question is, how do i qualify the company and prove they are trustworthy. Also, who should be on the lease, both the business and the tenant? any advice on how to structure this?

Nathan Gesner · Answer

You can have anyone co-sign. I'm just saying that I wouldn't do it. If a person doesn't qualify on their own, I don't rent to them. If he's qualified, but only by the skin of his teeth, then I would rent to him but I would want a double deposit and take other precautions.

Most people would be ok with what you're doing.

Frank Rizzo · Answer

@Nathan G.

Thanks for the response. The tenant does qualify on his own, but wouldn’t be the strongest of candidates .

Wouldn’t having the company co-sign make the company just as liable as if they signed it alone. Also, do you have any tips on determining the trustworthiness of the company?

Nathan Gesner · Answer

There are two different things here: Is the company renting the house and then putting the employee in it? Or is the employee renting the house, unable to qualify, and the company is backing him?

I allow the former. I do not allow the latter.

If the company is renting the house, I require a responsible owner or CEO or CFO or someone to apply and get qualified. The lease is in the company name and the company pays the rent. I have never had a company fail to pay what is owed because that responsible person doesn't want their credit screwed.

If the tenant applies and fails to qualify, I don't think I would use the company as a co-signer. I don't put people in my rentals unless they personally qualify, with the exception of my example above.

By the way, when a company rents from me and then places an employee in the rental, I charge a premium rent, a higher deposit, and a mandatory cleaning fee. Why? Because the tenant usually doesn't take care of the home because they're not responsible for the bill.

How to have a business sign a residential lease

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