Some landlords misinterpret, to their own disadvantage, the housing laws created to prevent discrimination based on familial status. State and local health and safety codes often set maximum limits on the total number of occupants. It is your right as a landlord, however, to restrict the number of residents based on how many people were in the initial group of applicants. This means that if a family of four moves in, the lease should restrict usage specifically to those four people. Verify you have a Use of Premises clause in your standard lease which may have language, for example, that limits outside guests to visits less than fourteen days. To guard against resourceful tenants looking for a loophole, the clause may go on to clearly state only one visit per six-month period. This type of comprehensive clause also restricts the tenant from “carrying on any business, profession, or trade of any kind, or for any purpose other than private dwelling.”
I recently worked with a client whose tenants had two “friends” who moved in after the lease signing. There are many risks in a situation like this. The landlord was most focused on the impact of the increase in utilities based on the landlord’s skyrocketing bills, when compared to the previous year. But the area most often overlooked by a landlord is the increased liability. If you are in a situation where your tenant’s friends or family are occupying your unit, it is always best to request an application or addendum. But only if you agree to let the tenant add the additional roommate for short or long term. This reduces your risks in the event of damage to the property. If you don’t have any rules about guests in your lease, you can’t enforce any rules about guests.
It is key to be informed of your state and local county laws to verify if there is a limit on the number of occupants based on square footage. I have heard of landlords trying to enforce occupancy based on opposite sex children per bedroom. There are no laws that allow the landlord to restrict or dictate sleeping arrangements. Be sure you are aware of the local laws regarding the creation of additional bedrooms in the lower level of the unit or basement. I have worked closely with several landlords with properties in cities where there were oppressive fines for rooms in basements that did not have a second egress access in the case of emergency or fire. Your tenant may view that basement area as extra space for another bed, so be advised that there may be a heavy fine associated with this. Protect yourself by researching with your legal team or local REIA to learn more about regulations in your area.
About the Author
Linda Liberatore is the founder and president of My Landlord Helper—Secure Pay One, a unique virtual assistant solution for DIY real estate investors. She also is a motivational speaker and author of the book “Daily Inspirations to Achieve Your Real Estate Investment Goals.” Her second book is due out Spring 2017. She has conducted more than 1,000 workshops focusing on setting goals and implementing technology and best business processes. Her ability to transform a property suffering from reduced collections into a flourishing one is displayed by a 98 percent client retention rate. Contact her at email@example.com.