Co-Tenant Rental Policies and Practices
Rental policies and practices, rules and standards, and landlord expectations of renter conduct should be clearly detailed in the lease agreement and clearly communicated to potential tenants wishing to apply for tenancy as co-tenants. Co-tenant applicants must understand the responsibilities and obligations they will have as co-tenants named in the lease agreement and by their signature on the lease agreeing to those lease terms and conditions. By requiring everyone who lives in the rental unit to sign the lease, the landlord is certain that each individual is jointly and severally liable for the full rent and lease agreement terms. Furthermore, the landlord has the option of suing any one or more of the tenants and, the more defendants, the greater the landlord’s chance of collecting rent defaults or damages.
The landlord’s standard rental policy and practice for tenant screening will be conducted for each applicant applying for co-tenancy.
Lease Agreement
Jointly and Severally Liability Lease Clause
The most important lease clause for co-tenancy is the “jointly and severally liability” clause. Co-tenants both as a group and as individuals are held equally responsible for compliance with lease terms and conditions and equally liable for lease violations by any co-tenant. The landlord can choose to hold all of them, or just any one or more of them, responsible to pay rent or pay for damages. The individual members of the living group should understand that they have full responsibility for the entire group rather than thinking that each co-tenant’s responsibility to the landlord ends when they pay their share of the rent.
While many states make “jointly and severally liability” a fact by statute, an adequate lease agreement will always include a jointly and severally liability clause which makes it clear that the landlord is legally entitled to hold each individual who signed the agreement wholly responsible for all terms of the agreement. Having the clause within the lease prevents the co-tenants from claiming to be unaware of their liabilities.
To further emphasize co-tenant jointly and severally responsibility and liability, a landlord should require payment of rents, fees, and deposits as a single payment payable according to the landlord’s stated payment methods rather than allow each co-tenant to pay their share separately. When the lease agreement stipulates a single payment of the monthly rent amount, it is a condition of the lease that binds all co-tenants. Multiple payments totaling the monthly rent amount creates more administrative work for the landlord and increases risk of rent payment disputes. The landlord does not have to accommodate a “Co-Tenant Agreement” that apportions each co-tenant’s share of the monthly rental amount. Co-tenant agreements are personal arrangements for division of rental expenses and living arrangements. The arrangement is usually a written document typically detailing major rental issues such as how rents, deposits, utilities are shared and paid, as well as housekeeping arrangements shared by co-tenants. The landlord is not a party to a co-tenant agreement and is not bound by the agreement.
There is a likelihood that by separate rent payments by each co-tenant will allow the co-tenants to forget about their jointly and severally obligations for full rent, possibly to claim that the multiple rent payments when accepted by the landlord represented a waiver of the co-tenants jointly and severally responsibility. A landlord should not allow himself to be drawn into problems between the co-tenants particularly financial difficulties. Co-tenants have the responsibility individually and collectively to make required rent payments. Co-tenants may be reminded that a default by one tenant will cause all tenants to be held responsible for the rent default and subject to consequences such as late fees, warnings, and possible eviction.
Similarly co-tenants will be held responsible for payment of security deposits and fees by a single payment made to lease requirements. Co-tenants are responsible among themselves if they wish to apportion amounts to individual co-tenants. The landlord should make it clear that the security deposit is held for the term of the lease agreement and return of security deposit funds will only be after tenant move-out inspection, assessment of the unit’s condition, completion of lease terms and conditions for tenant move-out responsibilities and in compliance with state statutes for security deposit accounting and return. In the event of a co-tenant moving out before the end of the lease term, the landlord will not refund a portion of the security deposit to the departing tenant .The co-tenants are responsible themselves to work out an arrangement regarding the apportionment or return of a security deposit amount to an individual co-tenant.
Changes in Tenancy
A landlord’s lease agreement should also detail the terms and conditions under which a change in tenancy may be allowed.
A landlord’s stated rental policy on co-tenants could state that approval for a new/replacement tenant will be subject to the following conditions:
- New tenant permission must be requested prior to any action by the current tenant,
- Adding an additional tenant must meet occupancy standards of the rental unit,
- A replacement or added tenant will be subject to standard tenant screening and acceptance by the landlord,
- Addition of a co-tenant may require an increase in rent and/or security deposit,
- If the co-tenant request is accepted, all tenants of the unit, both current and proposed, will be required to sign a new lease or addendum to the original lease,
- Each tenant in the rental unit will be jointly and severally liable for the lease terms including the total amount of the rent, and
- A default by any co-tenant may affect tenancy of all tenants.
If a Co-Tenant Leaves Early
If a co-tenant breaks the terms of the lease agreement by moving out, the co-tenant is still liable for the remaining term of the tenancy. If the landlord chooses, the landlord can evict all remaining co-tenants. As a practical matter, it is usually not to the landlord’s benefit to do so as long as the rent gets paid. However, there could be times when the collective financial condition of the remaining co-tenants is such that the landlord considers a vacancy to be preferable to a high risk of not receiving future rents.
Replacing a Co-Tenant
There are times when a roommate wishes to leave early and he or one of the remaining co-tenants is willing and able to find a replacement tenant to take his place. The landlord should require that the departing tenant sign a lease termination agreement. By signing this agreement the landlord and the tenant agree that the landlord is releasing the tenant from the lease and the departing tenant has no right to occupancy. This step is a protection not only for the departing tenant, but also for the landlord in the event that the departing tenant were to claim that he never really intended to leave and the landlord locked him out.
The replacement co-tenant must submit a rental application, consent to the standard tenant screening, and meet the selection criteria. If the replacement co-tenant is approved, all occupants of the rental unit should be required to sign a new lease.
Signing a new lease with all parties reinforces the responsibility of each tenant for full rent and lease terms. It will also make it clear that the departing tenant is no longer entitled to possession of the rental unit. A new lease is recommended even if the new tenant is completing the departing tenant’s lease term under the very same conditions.
The departing tenant may request a refund of his portion of the security deposit. As noted above, the entire amount of the security deposit should be retained until all tenants have completed the lease term and properly vacated the premises. The departing tenant, the replacement tenant, and the remaining co-tenants will need to resolve the security deposit issue among themselves.
Tenant Disagreements
When disagreements among co-tenants are brought to the landlord’s attention, the landlord should not intervene, attempt to mediate the disagreement, or give advice to any individual. Mediation by a neutral third party can be suggested but the co-tenants must decide among themselves to pursue and accept such a solution.
Eviction
One important fact to remember is that only landlords can evict tenants. A co-tenant cannot evict another co-tenant. Roommates cannot change locks to bar other roommates from access to the rental unit. Lease clauses customarily state that tenants will be in violation of the lease if they change locks without the landlord’s permission.
Lease Requirement for Renters Insurance
Landlords in many states can require that tenants purchase renters insurance as a condition of the lease. With multiple tenants in the rental unit, there is greater likelihood of loss of or damage to a tenant’s personal property. The landlord’s insurance does not cover the tenant’s personal property. Tenants need their own insurance to protect against losses caused by either their own negligence or by factors beyond the tenant’s control. Typically, each tenant will need to purchase their own insurance coverage.
Other Requirements
A landlord must always research applicable laws and ordinances for the location of his rental property to determine compliance requirements, in particular for co-tenants/roommates. For example, the state of New York has an Unlawful Restrictions on Occupancy Law, commonly known as the “Roommate Law” that allows tenants the right to bring in additional occupants subject to certain requirements.