Cotenancy often results in unique situations for a landlord. For example, a resident’s inability to pay his share of the rent may result in late-, partial-, or nonpayment. Likewise if the cotenants have a dispute and one of them moves out, the remaining residents may have trouble paying the rent and finding a replacement roommate. Cotenants may even expect you to resolve their disputes.
Deciding who pays the rent
How your residents choose to divide the rent between them isn’t your decision, and accommodating your residents by accepting multiple payments can cause administrative nightmares. Doing so can also lead a roommate to erroneously believe that he’s not responsible for the entire rent. You’re better off having a firm policy of requiring one payment source for the entire month’s rent.
This practice offers more than just administrative convenience. Legally, each roommate in your rental property is jointly and severally liable for all rental contract obligations, meaning that if one skips out, the others owe you the entire amount.
Encourage your residents to let the delinquent roommate know that they’re all on the hook until the balance is paid. After all, your residents are in a better position to track down their elusive roommate than you are.
Don’t accept partial rent payments from two or more cotentants. You may not receive all the payments at the same time or for the proper amount. When you call the residents, some of them may say that they paid their share and that you need to track down one of the other residents. Make it easier on yourself by requiring a single rent payment from all cotenants.
Raising the rent and security deposit
If one of your residents brings in a new roommate, you may want to raise the rent to cover the added expenses you’re likely to pay and to lower your exposure to risk. After all, the more people living in a rental unit, the greater the wear and tear on the apartment and common areas and the greater your exposure to risk.
To avoid misunderstandings about the cost for an extra roommate, include a clear statement in your lease or your policies and procedures document regarding the maximum number of occupants and specify how much each additional occupant will raise the monthly rent. Your security deposit policy should also include a statement of the amount of the security deposit required for each additional roommate.
Requiring an additional security deposit provides you with leverage to compel the new resident to comply with the lease terms. Be sure to check with a local fair housing expert to make sure that increasing rent or the security deposit per occupant isn’t considered discrimination.
Take a hands-off approach to cotenant disputes
When cotentants try to get you involved in their disputes only one word applies: Don’t! Instead, tell the residents to work out their differences among themselves. Remind them that they’re responsible as a group for complying with the lease agreement. If you get involved, you’re likely to find yourself in a no-win situation in which one or all cotentants turn against you.
Unless a resident has a restraining order against a cotentant, don’t change the locks or take any other action to prevent a cotentant from entering the rental unit. If you’re concerned that a resident will be harmed by his roommate, consult with local law enforcement or other relevant agencies and let your resident know what actions he can take legally to protect himself.
In domestic violence situations that are disrupting your other residents, you may be tempted to evict the victim as well as the perpetrator in order to rid yourself of the problem. Be careful. In some states, including Rhode Island, evicting a victim of domestic violence is illegal or restricted to limited fact situations.
Terminating a cotenant’s lease
When a cotentant needs or wants to leave before the lease term expires, you need to ensure that you continue to receive rent payments from the remaining residents, decide what to do with the departing resident’s share of the security deposit, determine whether you should terminate the existing lease, and if you will then sign a new lease with the remaining residents, which may include a new resident.
When a cotentant leaves or gives you written notice of his plans to move out, keep the following information in mind:
If the cotentant signed a month-to-month rental agreement, he should give you a written 30-days’ notice prior to leaving, which gives the other residents and you 30 days to find a suitable replacement. Regardless of whether you find a suitable replacement, the departing resident will no longer be responsible for any rent beyond that 30-day period if he moves out by the expiration of the notice.
If a cotentant breaks the lease by leaving prior to the expiration of the lease term, you have the option to terminate the lease with the others and evict them, if necessary. If they’re good renters, keep them and give them time to find a replacement. If they’re not good renters, the breach of the lease by one resident gives you the opportunity to get rid of them all.
Although the departing resident is responsible for any unpaid rent, courts expect you to do what’s possible to mitigate (lessen) the damages. For example, if the departing resident finds a replacement, you need to accept the replacement or have a good reason to reject him. If a suitable replacement isn’t found , and they won’t pay the rent in full, you need to advertise and find new residents.
As soon as a suitable replacement is found or you decide to evict the residents, terminate the existing lease, so a departing resident can’t come back and claim that he never really intended to leave.