WHAT to do when adding a tenant to an existing lease?

Question

HI,

I was curious to hear from other professionals, when you have a tenant for a couple of years, and then he wants to add a new person to the lease, what steps would you take?

Thank you

Cari Sweet · Answer

I allow adding tenants as long as the existing tenants are in good standing. Having more people liable for the lease is usually positive in my experience. I do require full screening for the incoming tenant, and updated income screening for the full group of tenants. Then we do an addendum adding the new tenant, and specifying that all tenants are equally liable for all lease terms.

Here in Portland, there are a couple of different landlord groups/companies that offer pre-made forms. Those forms are generally well reviewed by local attorneys in regards to the local jurisdiction regulations. The landlord-tenant attorney that I work with generally recommends using those forms rather than writing my own. If I do write my own addendums I always run it by her first.

We also allow removal of a tenant from a lease as long as the tenant group is in good standing, and the remaining tenants qualify again based on their combined income.

There are situations where it is more beneficial to end the current lease and start a new one (ability to change lease terms, rent amount etc), and there are situations where it makes more sense to just do an addendum. It depends on a lot of factors; primarily the local jurisdiction rules that may limit lease changes (in Portland/Oregon rent, security deposit, screening fees, an no-cause evictions are heavily regulated).

Martin Streich · Answer

@Cari Sweet 100% agree! As you stated jurisdictions and different city regulations all handle it differently. I Should've re-worded that A little differently.

Nathan Gesner · Answer

That is not true. You can legally change or cancel a contract if all parties agree.

Kristian Sexton · Answer

@Sami Gren When this happens to us we make the existing tenants reapply, as well as the new ones that they plan to add. We consider background checks and credit checks only good for 60 days. Once we get those in we look at their applications as we would a brand new lease.

Cari Sweet · Answer

That's simply not how contract law works... Addendums can be added to a contract (in most cases), which modify the original contract, when legally executed (per the original contact terms).

Now, I see you are in Seattle, which much like Portland, has extensive tenant protections. In Portland for example we are not allowed to increase rent more than once in 12 months, and it must be less than 10% increase in "effective rent". This has been interpreted to mean "any increase in tenant expense to live there". So we couldn't increase rent 10% and make the tenant start paying WSG when it was included before. BUT even then, the contract is valid, it just violated Portland regulations and the owner would owe the tenant the local Relocation Fee (penalty, which is steep).

Therefore, due to the local jurisdiction, sometimes we choose to mutually terminate the lease and write a new one instead of modifying the original by agreement. Sometimes, (but not always, ask an attorney) a new lease will allow you to modify terms that you couldn't legally change otherwise. Also, in Oregon we have more landlord protection in the first year of a tenancy. So there could be benefits from starting a new lease for that reason. But it's a case by case basis to modify by addendum, or terminate and start a new lease.

Nathan Gesner · Answer

I start by making the original tenant fill out a form requesting to add a new renter, and they pay me a $50 processing fee (I charge a $50 fee any time I make changes to an existing lease). The new person must complete an application and pass the screening. Then, they sign the lease, are issued a key, and can move in.

Nobody moves in without passing my screening and signing the lease.

Martin Streich · Answer

If it is in the middle of the contract term, you either have to terminate it and rewrite a contract, including the other tenant or wait until the contract is done and add the new tenant to the contract on the next lease. If the lease is month-to-month, you can do it at the end of the month. Suggested to do that earlier than later, so there is no liability on a tenant who is not on the lease paper. All liability will be put on you As a landlord otherwise.

Martin Streich · Answer

@Nathan Gesner consent from both parties is sometimes not enough. Definitely check in with your state laws to clarify. All state regulations work differently.

Martin Streich · Answer

@Sami Gren  it is illegal to edit a contract midterm, even with the tenants consent. You will have to rewrite the contract. The main reasin is for a better clearance of liability. with you editing a signed contract, that has a high Probability of letting a tenant be able to void the contract and it actually happening. Regardless when that edit was made to the contract , they can still use that against you as a landlord breaching contract.

Martin Streich · Answer

@Nathan Gesner Exactly! The only thing that changes is how many tenants theyre are, And how long the remaining lease is so you can rewrite the lease term for that amount of time. It is also great to change small but specific terms and conditions due to it not being just one tenant anymore. An example of that is tenant must pay for additional electric over flat fee / flat limit since now there is 2 occupants in the home instead of originally one. (Just an example 😅).

WHAT to do when adding a tenant to an existing lease?

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