Greetings, fellow property managers! Today’s blog is a guest post by one of our own, Robert Frenchu of Coldwell Banker Best Sellers in Carson City, Nevada. It’s a humorous take on the myriad issues surrounding roommates in rental properties. Enjoy!
The very word sends chills down the spine of property managers. The only other things we’d rather not hear are, “…water leaking since last Tuesday,” and “…when the garbage truck plowed through the living room….” Why do we develop nervous tics whenever roommates apply for a rental? Besides dealing with the competing priorities and motivations of two or more different people, roommates many times have trouble understanding some basic concepts.
A lease is a contract— a legal agreement between two- or more- parties. Any time you add another party to the mix, things can get more complex, and often do. Many leases have language that describes the obligation being between the owner and multiple tenants, and that language is “together and severally.” (Think of the word “severed” instead of “several.”) That means the agreement is • between the Owner and Tenants A & B, and • between the Owner and Tenant A, and the Owner and Tenant B.
Now that you understand the concept behind multiple signatories on contracts, let’s cruise through some examples of situations you need to think about before you sign on the dotted line.
John and Mary
Tenants John Smith and Mary Brown— who, by the way, are completely, utterly, and irrevocably in love with each other— sign a lease with owner Snidely Whiplash. A week later, Mary decides that John will never learn to put the toilet seat down, and runs off with Dave Milquetoast to live on the other side of town. John, aching to fill the sudden void in his life, asks Patty Partyhard to move in with him and be his new inamorato. While John is at work, Patty’s friends come over and celebrate Patty’s new hideout by moving a couple of walls, and seeing how much stuff they can flush down the toilet before it overflows. John, coming home and seeing the damage, calls it quits, packs his car, and moves to Barking Spider, Wyoming to work on a chinchilla ranch. Patty lives in the property until the owner comes by the see why the rent isn’t being paid, and he chases her out and changes the locks, leaving Patty to live in her ’77 Datsun until her next True Love reveals himself to her.
Who is responsible for the damage Patty caused?
Answer: John and Mary.
Since John has moved out of state, Mr Whiplash will take Mary to court, and he will win, and Mary will have to pay all the damage caused by John, Patty, and Patty’s League of Evil. Why? Because Mary signed a contract with the owner— along with John— that made her responsible together and severally. Whiplash does not have to go after John; he does not have to charge Mary only half- she is 100% responsible as if the contract were between Whiplash and her alone. Pretty cool, huh? Well, not if you’re Mary, obviously. Mary’s big mistake was signing a contract with someone she did not know well enough. Her other mistake was not weighing the Toilet Seat Issue against other possible outcomes. For the amount of money she ended up paying, she could have hired a person to come in and lower the toilet seat twice a day for the remainder of the lease. (Look in the Yellow Pages under “Toilet Seats, Raising and Lowering.”)
As it turns out. Dave was just as bad, and maybe worse. Backing up. Mary has decided to stay with John and his miserable toilet seat habit until the end of the lease, which terminates at the end of the month. Despite his tearful pleading, Mary turns in her required written 30-Day Notice to Vacate and starts looking for another place. Since the agreement is between the Owner and the Tenants together, Mary’s 30-Day Notice to Vacate is essentially the same as John giving a 30-Day Notice to Vacate. John cannot renew the lease, since the lease is between the Owner and John and Mary. If he wants to stay, he will probably have to sign a new lease. John will also have to remember that since the previous application was probably approved based on John and Mary’s combined income, he may not qualify to rent the property himself.
“I always pay my rent on time…”
Mary used to pay her half of the rent like clockwork on the first of the month— John would sprint in with his half on the fifth or– late– on the sixth. Or seventh. Or maybe even the tenth. When they finally went their separate ways, and Mary applied for her own place alone, she was shocked to discover that her tenant reference noted late rent! “How could this be,” she wailed. “I always paid my rent on time!” Well, no, Mary, you didn’t. Your rent was $1,000. You made an agreement with your co-tenant to each pay half of the rent, but that agreement was between the two of you, not the two of you and Mr. Whiplash.
Imagine, if you will, the owner asking his mortgage company if it was OK if he paid half of his mortgage payment now, and the rest when John brought in his rent. The mortgage company will say, “BWAH ha ha ha ha ha ha ha ha ha ha ha— No.”
John and Mary have decided to share a large house with Jill. All three people sign a lease with Mr. Whiplash. They write a check for the rent, and write a check for the $1500 deposit. Months go by, and Jill is promoted to Apprentice In-Flight Missile Repair Technician and leaves the state. John and Mary, blissful in their large house all alone, don’t mention this to their property manager, and soon lose contact with Jill. Their lease ends, and they decide to move out. When they get their deposit check back, they note with not a small amount of trepidation that the check is made out to all three parties, requiring three signatures.
Since the lease (remember, this is a legal agreement) is in all three names, the deposit refund must also be made out to all three names. It doesn’t matter who wrote the original check, unless you specified who paid for what in the lease.
“We used to get along great…”
Things have gone south for John lately. His hours have been cut at work, Mary nags at him constantly, and the cat just pooped in his slippers. He attempts to escape with the help of his new friend, Dr. Jack Daniel. John starts spending a lot of time with Dr. Jack, and Jack convinces him that the best way to solve the nagging problem would be to engage in some violent behavior.
Mary hurries over to the court house and gets a restraining order, and asks Mr. Whiplash to change the locks. Mary, as one of the signatories to the lease, has every right to ask for the locks to be changed, and Mr. Whiplash does so. She brings in a copy of the restraining order. When John comes home from work to spend some quality time with Dr. Daniel, his key doesn’t work, and he demands— as a signatory to the lease— a copy of the new key. Mr. Whiplash knows that he cannot give John a copy of the key, or he would be violating the restraining order, which specifies that John is “excluded and ordered to stay at least 100 yards away from the residence.”
Secrets of Successful Roommate Arrangements
Although we have personally experienced each one of these examples, and although some property management companies choose not rent to roommates just because of examples like these– or worse– there are examples of roommate situations working out beautifully. What is their secret?
KNOW YOUR ROOMMATE. Avoid the temptation to enter into a legal contract with people you don’t really know. Where do they live now? What kind of condition is that place in? What’s the inside of their car look like? When they say they’ll meet you at a certain time, are they prompt? Do they stay up late while you’re an early riser? Can you really stand listening to Neil Sedaka all day long?
WHO WILL BE IN CHARGE? Avoid the temptation to let things take care of themselves. Choose which one among you will collect the rent, make sure it’s delivered to the landlord on time, handle the bills, and be the main contact person.
WHAT ’S THE FINANCIAL SITUATION? It’s likely you have a roommate because you can’t afford a place by yourself. What will happen when your roommate can’t pay, or is late? Do they have a steady job, or is it seasonal, like construction?
GET IT IN WRITING. If you’re going to enter into any agreements with your roommate aside from the lease (i.e. just between you and not involving the owner) get it in writing. Sure, it’s not as friendly as a handshake but it sure prevents misunderstandings later on, and it’s always better if everyone involved knows exactly what’s expected of them.
In today’s economy, getting a roommate makes sense for a lot of people. Don’t jump into the roommate pool without testing the depth first. A little homework and preparation can make it a great experience– for your wallet, too.
Thank you, Robert, for both your humor and the good points you raise in this post. I’ve rented to roommates with a high degree of success, and with a few failures similar to the ones you describe in your piece. To our readers: Do you have a roommate story you’d like to share? Please do so by leaving a comment on the blog. Thanks!