Chicken & Egg

5 Replies

Thoughts on how to approach this situation....

I am screening a potential tenant...good credit, clean background, verifiable gross income 3+ times rent, no pets, and seems like a neat & orderly kind of person.  Only problem...he would like to move in with his sister and her wife...and they are reluctant to fill out an application until they know whether he is approved (the excuse is they don't want to pay additional app fees if they don't have to).  While they haven't explained details, they seemed to indicate that their credit & background are not as squeaky clean.  I was also told that if they didn't qualify then he might want to rent my place on his own.  I find it hard to believe he would not try to move them in without my knowing.  Of course I reserve the right to inspect the property and this would be a violation of the lease agreement.  But I really don't want it to come to that.

So the question I make them all apply and it's a "package deal"....complete picture before approving "them".  Or do I consider him the primary, who has the income on his own to pay the rent, and approve him to move in...separating the other two applicants on their own merit?

@Tony Castronovo , even if you consider him the primary, you'd still want to charge an app fee for the other two to at least run a criminal background check on them. We deny applicants/residents with felonies or misdemeanors of a violent or drug related nature. Basically, they should have to pay an app fee if they want to live there so you can run that check, even if they're not directly responsible for the rent. We charge $35 for a single app and $20 for each add'l adult. If you approve them after that, still list their names on the lease agreement because they do need to comply with all the other tenant provisions of the lease--just specify somewhere that the joint & several responsibility of the tenants extends to all of the lease except the payment. It might be just a credit thing, and they might be happy to do this. Good luck!

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What a great question. 

You are absolutely correct in assuming that he will just try to sneak them into the unit if they don't qualify on their own. Would you not let them all rent if two of three had bad credit? He already makes the income, so that shouldn't be a problem. 

I'm wondering what sort of secrets hide in their backgrounds... If he's good, and they just have low credit scores, but no criminal background or evictions, I'd say yes. 

I'm a newbie on the forum - so i'll speak from personal experience and offer my humble opinion on it...

I have one property where we screened the tenant, she makes over 3x the rent and has been a stellar tenant for years now... now in the background however I suspect that her boyfriend at least part-time has been living there which would be a violation of her lease.  I know this isn't exactly the same situation...I see it as similar in that she's qualified for the lease, she's the one I'd hold responsible for anything that might go wrong since I have her contractually liable.  

For your situation, since he passes muster, if you can get criminal etc background checks on the other two, if it's just a matter of a spotty credit history, (and depending on how long the unit's been vacant as well as how many alternatives you have) i would probably feel comfortable still leasing to him/them since you know that rent can be covered already by his income - it's sort of like college kids using their parent's as co-signers.

Hope that helps!

Thank you all for your responses.  They shared with me a little...the sister has poor credit and the sister-in-law got into a bar fight.  They just don't want to drag him down.

I would absolutely run at least a background check on both of them and add their names to the lease agreement.  The question really is whether I should place contingency on the roommates as a qualification of approval for the primary applicant.  I am less concerned about whether he can pay the rent on his own (he can).  I just want to aim for putting quality tenants in my properties.  I'm all for giving people a chance and overlooking minor blemishes in their history.  Wish there was a report you could run on "Will you take care of my property o-meter" ha ha.

Appreciate the advice.  And welcome to Bigger Pockets @Jennifer McElliott !