How to Handle Unapproved Roommates in Your Rental Property

It is not uncommon for tenants to have guests.  But when those guests never leave, they become unapproved roommates to your tenants.   They have not signed your lease and, therefore, do not have to abide by the rules or policies outlined in your lease.  This blog post will show you ways to find out if someone other than the tenant is living in your unit and how to handle an unapproved roommate in your rental property.

Let’s touch a minute on why this is important.  First, as a landlord, you should take the time to vet your tenants.  Typically, you’ll check their credit and previous landlord-tenant relationships to ensure they can and will pay rent on time.  Next, maybe you do a background check to confirm they are a law-abiding citizen and do not pose a threat to other tenants or neighbors.  Finally, you do what you can to make sure the person leasing your rental unit is a good fit for you, the unit, and the complex (if you own a multi-family).

You jeopardize your rental property business when someone starts living with a tenant without being vetted.  For example, this unauthorized roommate may not have the financial means to qualify for your unit. In addition, they may have been evicted by their previous landlord for lease violations or may even have a criminal background that adds liability to your other tenants or neighbors should that illegal activity continue in or around your unit.  But, on the other hand, they may be a perfect tenant who you’d welcome to your rental property!

Ways To Discover Unapproved Roommates In Your Rental Property

Get friendly with neighbors

We try to get to know our neighbors with all our rental properties.  While outside sprucing up the curb appeal, we will see them going to or from their home and introduce ourselves.  Often, neighbors aren’t thrilled to have renters next door if the neighbors are homeowners.  They want assurance that the landscaping will be maintained and there won’t be car parts all over the front yard.  They do not want to experience loud parties late into the night or loud, aggressive dogs wandering the neighborhood.  For multi-family, they want to ensure there won’t be issues with parking and that tenant entrances facing them will be kept clean and free of clutter.  How do we know this?  We got to know ALL of our neighbors around our properties, multi-family or not.

Getting to know your neighbors allows you the opportunity to share contact information.  So, you can let them know when workers may be on-site, and parking may be affected.  It also lets them keep an eye on your rental property and let you know when things seem array.

Do periodic inspections

We cannot stress this enough.  Halfway through all of our leases, we will schedule a unit inspection.  This inspection is so we can evaluate how the tenant lives in our space.  We look for lease violations like extreme clutter, bikes or strollers blocking exits, holes in walls, broken windows, or mold growing from not cleaning the shower or tub.  We also check all the appliances, sinks, toilets, water lines, and smoke/carbon detectors to ensure they are working correctly.  If we notice something like the garbage disposal is leaking, we can  get it replaced, avoiding extreme damage from this unreported leak.

Why Inspections are Important For Detecting Unapproved Roommates

We also check closets for mold.  Commonly, in locations with extreme temps outside, mold can grow in areas with little airflow.  The cold weather outside with the warm uncirculated air inside is a prime place for mold to grow, especially in older homes.  Again, closets are the most common place, behind dressers, drapes, and headboards being another.

When checking for this mold, notice the shoes and clothing in the unit.  When checking for leaks under the bathroom sink, check for masculine or feminine products that may indicate someone other than the original tenant is living in your unit.  An inspection is how we found our single male tenant had a new roomie.  During an inspection, we checked the spare room closet that had been empty in years past.  This time, it was full of women’s clothing and shoes.  Does this mean there is an unauthorized roommate?  Not always, but it is the perfect opportunity to spark a conversation with the tenant about if there is an unapproved roommate living in your rental property.

We commonly hear, “That is just a friend staying for a couple of weeks,” or “My sister lost her lease and is in transition.”  We allow visitors in our lease but limit it to 7 days in a row, with a maximum of 35 days over a year.   When we remind the tenant of this, we are often asked how they go about adding this person to the lease.  At this time, we explain that they will have to qualify financially and undergo background checks just as the tenant did before moving in.  We then email them an application and let them know you will follow up in a few days.  This period allows them time to decide whether the new roomie will get to stay or must move on.

Purchase our Periodic Inspection Checklist!

This 6-page, single-family home inspection checklist (4 bed, 4 bath) is very thorough and includes space for notations if an area is satisfactory, needs attention, or is damaged.  It also includes inspections of appliances, smoke/carbon detectors, fire extinguishers, air filters, and HVAC.  The $5 purchase fee allows you to use this pdf form repeatedly.

Options For Adding a Tenant

If you vet the new roommate and they meet all criteria and qualifications, you have a couple of options with regards to the lease:

Create a whole new lease and have both tenants sign it.  At this time, you should walk the new tenant (and the original tenant) through all the lease terms to ensure they understand them.  You can keep the dates the same as the old lease or start over, adding time to the lease and thus, confirming you have a tenant for longer than initially expected.  If you had planned to increase the rent when the old lease expired, add an addendum for a rent increase mid-lease to cover yourself.

Another option is to add the new tenant to the current lease by creating an addendum. Both tenants would need to sign this form.  However, it is still essential to go over the terms of the entire lease so the new tenant is aware they have responsibilities beyond paying rent on time.

When the guest does not qualify

This situation is challenging, but where landlords need to stand their ground.   It would be best if you gave the current tenant an ultimatum.   Either the guest moves out, or they will both have to leave.   This is the no-fun part of being a landlord, especially when you like the existing tenant.  Be kind, explain your reasoning, and how you are conscientious of making sure all who live in your rental property must meet specific criteria.

If you allow one unapproved roommate in a unit of your rental property, you must allow it for ALL units.  Where their friend or family member may be great, you may not be so fortunate the next time.  Unauthorized roommates often feel they can do what they want without following lease terms.  For example, they could bring in pets, drugs, or side businesses that attract a variety of patrons, etc.  The existing tenant is responsible for this behavior, not the newbie, as they did not sign your lease.

How to Encourage Tenants to Not Sneak Roomies In

Our friends, Erik & Gelerie Stenbakken (@REIforthewin) shared this tip on how they avoid this issue altogether.  Include in your lease, either in the body or by addendum, that if an unauthorized roommate is discovered there will be a retroactive rent increase incurred.  Now, if you live in a rent controlled area or have limits on how much you can increase rent in a calendar year AND your rents are at market rate, this may not fly.  The theory behind this clause is to discourage unauthorized roommates, especially those that tenants bring on to share in the rent.  They quickly realize, by violating this clause in the lease, it will likely cost them more in the log run.  Initiating this clause has, for the most part, removed this issue for these smart rental property owners!

Check out our other blogs to guide you on your self-management journey as a landlord:

The Pro’s and Con’s of Holding Your Rental Property In An LLC

Why Landlords Need to Use Independent Contractor Agreements

10 Tips for DIY Landlords

Buying Rental Property? Make Sure You Evaluate These Structural Items!

Cash Reserves for Rental Properties, How Much is Enough?

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