Can I reject a rental application for too many people on the lease?

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knightrider
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Can I reject a rental application for too many people on the lease?

Post by knightrider »

Have a 2-br townhouse that I only want a max. of 2 adults to live in. Got an application from three people who want to live together as roommates. I do not want to deal with three roommates as they usually have high turnover. Can I legally say no, my max is 2 adults? The rental condo is in the state of Virginia.
Last edited by knightrider on Tue Jul 21, 2020 10:53 am, edited 1 time in total.
Goal33
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Re: Can I reject a rental application for too many people on the lease?

Post by Goal33 »

Do you have to cite a reason?
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BolderBoy
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Re: Can I reject a rental application for too many people on the lease?

Post by BolderBoy »

Does the town in which the condo lies have "unrelated occupants" limits?
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knightrider
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Re: Can I reject a rental application for too many people on the lease?

Post by knightrider »

BolderBoy wrote: Tue Jul 21, 2020 9:08 am Does the town in which the condo lies have "unrelated occupants" limits?
Highly doubtful they do.
Mr. Rumples
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Re: Can I reject a rental application for too many people on the lease?

Post by Mr. Rumples »

Housing Opportunities Made Equal of VA can provide the answer:

https://homeofva.org

https://law.lis.virginia.gov/vacodepopu ... enant-act/

Not sure if this is applicable. Here is a document from VA which says: NOTE: Landlords may impose occupancy standards restricting the maximum number of occupants to two (2) persons per bedroom.

http://www.legalaidworks.org/wp-content ... INAL-1.pdf

If its a three bedroom townhouse and you only want two tenants, that might be construed as unreasonable.
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Re: Can I reject a rental application for too many people on the lease?

Post by Carefreeap »

knightrider wrote: Tue Jul 21, 2020 9:21 am
BolderBoy wrote: Tue Jul 21, 2020 9:08 am Does the town in which the condo lies have "unrelated occupants" limits?
Highly doubtful they do.
Far safer to discriminate based on income and credit rating. I had a large 3br condo near UCSD which I wrote in the ad "No Roommate Situations". I did not want to be running a dorm. I still had a few calls but was always able to find a more qualified tenant within a reasonable amount of time.
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knightrider
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Re: Can I reject a rental application for too many people on the lease?

Post by knightrider »

Carefreeap wrote: Tue Jul 21, 2020 10:03 am Far safer to discriminate based on income and credit rating. I had a large 3br condo near UCSD which I wrote in the ad "No Roommate Situations". I did not want to be running a dorm. I still had a few calls but was always able to find a more qualified tenant within a reasonable amount of time.
Credit scores seem good. Incomes are a little low, but combined for all three they earn plenty to afford the rent. Can I make the requirement that each person on the lease needs to earn at least 4X the monthly rent?
tashnewbie
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Re: Can I reject a rental application for too many people on the lease?

Post by tashnewbie »

knightrider wrote: Tue Jul 21, 2020 10:18 am
Carefreeap wrote: Tue Jul 21, 2020 10:03 am Far safer to discriminate based on income and credit rating. I had a large 3br condo near UCSD which I wrote in the ad "No Roommate Situations". I did not want to be running a dorm. I still had a few calls but was always able to find a more qualified tenant within a reasonable amount of time.
Credit scores seem good. Incomes are a little low, but combined for all three they earn plenty to afford the rent. Can I make the requirement that each person on the lease needs to earn at least 4X the monthly rent?
I don't know if it's legal in VA (or NC), but I had a large apartment complex in NC require at least one person on the lease have sufficient income to cover the rent. I don't know what formula/multiplier they used to assess the sufficiency of monthly income.

ETA: I can't remember the specifics, but that apt. complex may have just relied on one person's income and not even considered the other people's, because that one person had sufficient income. You'll want to look at VA law (maybe check out the links previously posted by someone else) to see if this is something VA allows.
Last edited by tashnewbie on Tue Jul 21, 2020 10:30 am, edited 1 time in total.
quantAndHold
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Re: Can I reject a rental application for too many people on the lease?

Post by quantAndHold »

knightrider wrote: Tue Jul 21, 2020 10:18 am
Carefreeap wrote: Tue Jul 21, 2020 10:03 am Far safer to discriminate based on income and credit rating. I had a large 3br condo near UCSD which I wrote in the ad "No Roommate Situations". I did not want to be running a dorm. I still had a few calls but was always able to find a more qualified tenant within a reasonable amount of time.
Credit scores seem good. Incomes are a little low, but combined for all three they earn plenty to afford the rent. Can I make the requirement that each person on the lease needs to earn at least 4X the monthly rent?
Requiring a group of roommates to make at least 12x the rent seems like it’s a bit over the top. You could only really do that if you have the same requirement for everyone who applies. You can’t just make up rules to suit whether or not you want to rent to a particular tenant. From a legal standpoint, your safest course of action to not go afoul of the Fair Housing Act is to lay your requirements out up front before you start taking applications, and accept the first applicant who meets them.
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jpelder
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Re: Can I reject a rental application for too many people on the lease?

Post by jpelder »

It definitely depends on the number of bedrooms and the laws in your state. You can't say that you don't allow roommates at all, since familial status is a protected class under the FHA. This section of Virginia housing law appears to indicate that you can only limit occupancy to two persons per bedroom, so unless it's a one-bedroom townhouse, you may not be able to reject the three-person group: https://law.lis.virginia.gov/vacode/tit ... reasonable.

I understand not wanting turnover in tenants, but that's part of landlording. If you have another application, you could choose the other over the roommate situation for some reason besides familial status (income, credit, etc.) But tread carefully, as you definitely don't want a housing discrimination lawsuit.
Mr. Rumples
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Re: Can I reject a rental application for too many people on the lease?

Post by Mr. Rumples »

This might help:

https://www.thebalancesmb.com/tenant-qu ... ds-2124944

But while the above is general, state laws vary as do the court decisions in state courts. Let's say that my brother, his wife and I want to rent the townhouse, would that be OK, whereas three unrelated adults would not be? Would that pass muster in VA? I don't know.
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Re: Can I reject a rental application for too many people on the lease?

Post by MarkBarb »

I'm sure that it depends on the state and local laws. Many years ago, my wife and I moved to an apartment in Houston. They required that either we both individually meet the minimum income requirements or that we produce a marriage certificate showing that we were married. That seemed reasonable, because the risk in a roommate situation is that one or two of them move out and the remaining person is not financially able to afford the apartment.
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Re: Can I reject a rental application for too many people on the lease?

Post by snailderby »

Here's the 1991 Keating memorandum on occupancy standards: https://www.hud.gov/sites/documents/DOC_7780.PDF.

Here's the text of the Virginia Residential Landlord and Tenant Act: https://law.lis.virginia.gov/vacodepopu ... enant-act/.

And the text of the Virginia Fair Housing Law: https://law.lis.virginia.gov/vacodepopu ... using-law/.
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Re: Can I reject a rental application for too many people on the lease?

Post by randomguy »

knightrider wrote: Tue Jul 21, 2020 10:18 am
Carefreeap wrote: Tue Jul 21, 2020 10:03 am Far safer to discriminate based on income and credit rating. I had a large 3br condo near UCSD which I wrote in the ad "No Roommate Situations". I did not want to be running a dorm. I still had a few calls but was always able to find a more qualified tenant within a reasonable amount of time.
Credit scores seem good. Incomes are a little low, but combined for all three they earn plenty to afford the rent. Can I make the requirement that each person on the lease needs to earn at least 4X the monthly rent?
In general for real estate questions, you need to look at state and local laws. But at a minimum, you should have your standards in writing before trying to rent out a place. When you are making stuff up as you go, you run a much bigger risk of coming across as a person that is discriminating on illegal factors.
megabad
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Re: Can I reject a rental application for too many people on the lease?

Post by megabad »

You have 2 questions here: 1) can you reject current applicants? 2) can you universally restrict applications to 2 occupants. In my non expert opinion, the answer to 1) is almost certainly yes unless you live in a jurisdiction that specifically modified fair housing laws (highly unlikely). The answer to 2 is almost certainly no as I can see numerous conflicts with federal law. Not a lawyer, seek professional advice.
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Re: Can I reject a rental application for too many people on the lease?

Post by Mr.Chlorine »

Is this a 3 bedroom condo or 2? If 2, I am assuming the applicants are a couple plus a third wheel. Would you not prefer to have all three on the lease as opposed to just 2, with the 3rd being a significant other who also lives there? If this is a 3 bedroom place but you only want 2 adults then this does not seem reasonable to me.

Do you have other applicants? If so, just choose another qualified one.
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Re: Can I reject a rental application for too many people on the lease?

Post by randomguy »

MarkBarb wrote: Tue Jul 21, 2020 10:36 am I'm sure that it depends on the state and local laws. Many years ago, my wife and I moved to an apartment in Houston. They required that either we both individually meet the minimum income requirements or that we produce a marriage certificate showing that we were married. That seemed reasonable, because the risk in a roommate situation is that one or two of them move out and the remaining person is not financially able to afford the apartment.
What is the risk? Both people on the lease are liable for the rent. You have 2 people to sue for rent instead of 1.... I would be worried that these days that discriminating based on marital status is illegal. As always talk to a lawyer.
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Re: Can I reject a rental application for too many people on the lease?

Post by galawdawg »

An ounce of prevention is worth a pound of cure. I'd recommend you consult with a Virginia attorney experienced in landlord-tenant matters. That is your best resource for correct legal advice. Realize that if you are sued and your actions violated the law (even inadvertently), your insurance provider may deny coverage for both the claim and your attorneys fees and leave you on your own to defend. The few hundred you spend now for legal counsel could save you tens of thousands down the road.

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Re: Can I reject a rental application for too many people on the lease?

Post by Mr. Rumples »

Renting out a home is a complicated business bound by law. Its important to know them. Also, note that in VA, in most localities, renting out a home/condo and so forth requires a business license. Example:

https://www.fairfaxva.gov/government/co ... properties

I posted a link to HOME of VA above. A landlord needs to be very careful that they don't appear on their radar:

https://www.wric.com/news/taking-action ... l-renters/
Last edited by Mr. Rumples on Tue Jul 21, 2020 11:07 am, edited 2 times in total.
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Re: Can I reject a rental application for too many people on the lease?

Post by Mako »

galawdawg wrote: Tue Jul 21, 2020 10:52 am An ounce of prevention is worth a pound of cure. I'd recommend you consult with a Virginia attorney experienced in landlord-tenant matters. That is your best resource for correct legal advice. Realize that if you are sued and your actions violated the law (even inadvertently), your insurance provider may deny coverage for both the claim and your attorneys fees and leave you on your own to defend. The few hundred you spend now for legal counsel could save you tens of thousands down the road.

IANYL.
+1. You have to be very careful, especially because you are clearly making up reasons to deny them after the fact, rather than having some sort of policy in place from the start.
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Watty
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Re: Can I reject a rental application for too many people on the lease?

Post by Watty »

For a townhouse there may be HOA rules that are involved too.

In particular check about the number cars that each unit can have since there may be limited parking. If there are three adults and they need three cars but the HOA rules say you can only have two cars then that would seem to be a reasonable reason to decline the application.

I live in a suburban single family home but the county I am in has a limit on the number of cars that can be at a single family home and that will occasionally catch people with large extended families or people trying to rent out room.
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Re: Can I reject a rental application for too many people on the lease?

Post by knightrider »

Mako wrote: Tue Jul 21, 2020 10:59 am +1. You have to be very careful, especially because you are clearly making up reasons to deny them after the fact, rather than having some sort of policy in place from the start.
I am not managing some 500 unit complex with policies in place for everything under the sun :-) This is all we own and it just takes one bad tenant to make our life miserable and ruin our property.
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Re: Can I reject a rental application for too many people on the lease?

Post by randomguy »

knightrider wrote: Tue Jul 21, 2020 11:13 am
Mako wrote: Tue Jul 21, 2020 10:59 am +1. You have to be very careful, especially because you are clearly making up reasons to deny them after the fact, rather than having some sort of policy in place from the start.
I am not managing some 500 unit complex with policies in place for everything under the sun :-) This is all we own and it just takes one bad tenant to make our life miserable and ruin our property.
It just takes one lawsuit to make your life miserable and ruin your life. When you are running a business legal expenses are part of deal.
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knightrider
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Re: Can I reject a rental application for too many people on the lease?

Post by knightrider »

randomguy wrote: Tue Jul 21, 2020 11:15 am It just takes one lawsuit to make your life miserable and ruin your life. When you are running a business legal expenses are part of deal.
The risk of bad tenant ruining my life is far higher than risk of rejected tenant lawsuit.
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Re: Can I reject a rental application for too many people on the lease?

Post by Mako »

knightrider wrote: Tue Jul 21, 2020 11:19 am The risk of bad tenant ruining my life is far higher than risk of rejected tenant lawsuit.
Then by all means, reject whomever you like for whatever reasons you like! I think you've gotten sufficient advice here.
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Re: Can I reject a rental application for too many people on the lease?

Post by Grt2bOutdoors »

knightrider wrote: Tue Jul 21, 2020 11:13 am
Mako wrote: Tue Jul 21, 2020 10:59 am +1. You have to be very careful, especially because you are clearly making up reasons to deny them after the fact, rather than having some sort of policy in place from the start.
I am not managing some 500 unit complex with policies in place for everything under the sun :-) This is all we own and it just takes one bad tenant to make our life miserable and ruin our property.
No one says you must rent to anyone. Take it off the market - they can’t sue you for that. Or just be upfront with them, you don’t want to rent to roommates - they can’t win with that, it’s your property and you set the requirements for who rents it (within rational reasoning) - not the government.

I’ve been to tenant court twice, it’s not pleasant. The first time we had to get a lawyer and that cost $5k between the attorney and the sheriff to forceably remove them and their stuff. The second time I represented without the attorney, the court found in my favor, I still had to pay the sheriff and it was another forced eviction. It’s not only time and money, it’s aggravation!
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Re: Can I reject a rental application for too many people on the lease?

Post by SmallSaver »

Grt2bOutdoors wrote: Tue Jul 21, 2020 11:41 am
knightrider wrote: Tue Jul 21, 2020 11:13 am
Mako wrote: Tue Jul 21, 2020 10:59 am +1. You have to be very careful, especially because you are clearly making up reasons to deny them after the fact, rather than having some sort of policy in place from the start.
I am not managing some 500 unit complex with policies in place for everything under the sun :-) This is all we own and it just takes one bad tenant to make our life miserable and ruin our property.
No one says you must rent to anyone. Take it off the market - they can’t sue you for that. Or just be upfront with them, you don’t want to rent to roommates - they can’t win with that, it’s your property and you set the requirements for who rents it (within rational reasoning) - not the government.
The government very much sets requirements for why applicants can be rejected. I think OP, and any landlord, would be well-advised to understand housing laws, especially when looking for ways to reject an applicant. For example, if the applicant is a member of a protected class and OP rejects their application without a legally solid basis that is a significant liability exposure.
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Re: Can I reject a rental application for too many people on the lease?

Post by Mako »

SmallSaver wrote: Tue Jul 21, 2020 11:45 am The government very much sets requirements for why applicants can be rejected. I think OP, and any landlord, would be well-advised to understand housing laws, especially when looking for ways to reject an applicant. For example, if the applicant is a member of a protected class and OP rejects their application without a legally solid basis that is a significant liability exposure.
Exactly, even if your reasons are benign, if you have no policy in place and are beating around the bush trying to figure out a way to reject them, and if the applicants happen to be in a protected class, you are asking for trouble.

This is why you put a policy in place--so you can just point to the clear policy, and you don't look like you are making stuff up for potentially nefarious reasons. If the business (and landlording is a business) isn't important enough to make such a policy, or to get legal advice when you are in a gray area, then you are taking a big risk IMO.
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Re: Can I reject a rental application for too many people on the lease?

Post by bighatnohorse »

You set the standards. 1) credit score 2) background check 3) employment history
All three have to pass the standards - so that any "one" could be held responsible for paying the lease.
Zillow offers a landlord service that will handle 99 percent of those chores for you.
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Re: Can I reject a rental application for too many people on the lease?

Post by tibbitts »

knightrider wrote: Tue Jul 21, 2020 11:19 am
randomguy wrote: Tue Jul 21, 2020 11:15 am It just takes one lawsuit to make your life miserable and ruin your life. When you are running a business legal expenses are part of deal.
The risk of bad tenant ruining my life is far higher than risk of rejected tenant lawsuit.
Sell the property, or leave it vacant until you are ready to use it yourself. That's what I do with mine, so it's not like I'm suggesting something I wouldn't do myself.
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Re: Can I reject a rental application for too many people on the lease?

Post by quantAndHold »

MarkBarb wrote: Tue Jul 21, 2020 10:36 am I'm sure that it depends on the state and local laws. Many years ago, my wife and I moved to an apartment in Houston. They required that either we both individually meet the minimum income requirements or that we produce a marriage certificate showing that we were married. That seemed reasonable, because the risk in a roommate situation is that one or two of them move out and the remaining person is not financially able to afford the apartment.
Unless this was before passage of the Fair Housing Act in 1968, this was almost certainly illegal. One of the parts of that act is that you can’t discriminate based on marital status.
Yes, I’m really that pedantic.
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Re: Can I reject a rental application for too many people on the lease?

Post by megabad »

quantAndHold wrote: Tue Jul 21, 2020 12:48 pm
Unless this was before passage of the Fair Housing Act in 1968, this was almost certainly illegal. One of the parts of that act is that you can’t discriminate based on marital status.
Uh this isn’t true. Once again, seek professional advice OP if you view this a issue of significance.
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Re: Can I reject a rental application for too many people on the lease?

Post by Mako »

quantAndHold wrote: Tue Jul 21, 2020 12:48 pm Unless this was before passage of the Fair Housing Act in 1968, this was almost certainly illegal. One of the parts of that act is that you can’t discriminate based on marital status.
Marital status isn't a protected class in the Fair Housing Act, though it is in many states. No idea if VA is one.
quantAndHold
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Re: Can I reject a rental application for too many people on the lease?

Post by quantAndHold »

megabad wrote: Tue Jul 21, 2020 12:53 pm
quantAndHold wrote: Tue Jul 21, 2020 12:48 pm
Unless this was before passage of the Fair Housing Act in 1968, this was almost certainly illegal. One of the parts of that act is that you can’t discriminate based on marital status.
Uh this isn’t true. Once again, seek professional advice OP if you view this a issue of significance.
I stand corrected. It’s protected in half the states by state law. I’ve never lived in a state hat didn’t have protection for marital status, so I had never seen that.
Yes, I’m really that pedantic.
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Re: Can I reject a rental application for too many people on the lease?

Post by brandy »

https://www.biggerpockets.com/forums is an active comprehensive real estate forum.
Sign up there and get better info.

You have to abide by federal, state, local laws.
Everybody gets treated the same.
You want your application criteria the same for everyone.
a good rental agreement that spells out your criteria and abide by it.
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Re: Can I reject a rental application for too many people on the lease?

Post by johnnyc321 »

knightrider wrote: Tue Jul 21, 2020 8:59 am Can I legally say no, my max is 2 adults?
If your intention is to not allow kids, then this is discrimination on the basis of familial status.
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Re: Can I reject a rental application for too many people on the lease?

Post by neverpanic »

knightrider wrote: Tue Jul 21, 2020 8:59 am Can I legally say no, my max is 2 adults? The rental condo is in the state of Virginia.
1) Consult with a landlord-tenant lawyer in your state. This shouldn't cost more than $250 and will answer all your questions.

2) "3 adults" is not a federally-protected class. That's my legal argument to support your position.

3) X is the rent for 1-2 adults. X + $500 is the rent for 3 adults.
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Re: Can I reject a rental application for too many people on the lease?

Post by Sandtrap »

knightrider wrote: Tue Jul 21, 2020 8:59 am Have a 2-br townhouse that I only want a max. of 2 adults to live in. Got an application from three people who want to live together as roommates. I do not want to deal with three roommates as they usually have high turnover. Can I legally say no, my max is 2 adults? The rental condo is in the state of Virginia.
1. A landlord does not legally have to give a reason for not renting to someone.
"I'm sorry, the unit has already been rented."
"I'm sorry, the unit is still under renovation."
"I'm sorry, we are still taking rental applications."
"I'm sorry, the unit is not for rent."
See?

*Follow the rules and laws.
*Be professional.
*Follow a good procedure.
*Have your leases, rental apps., House rules, Inventory check in/outs, Bed Bug Notices, ADA and Assist Animals, etc. done professionally with legal counsel.

2. Just as a tenant does not have to give a reason for not renewing a lease and moving out, so the landlord does not have to give a reason for not renewing a tenant's lease.
See?

3.
a) Simply state your criteria for your rental unit.
b) Take applications. Verify your data.
c) Choose your renter.
d) Follow the laws and codes. Be professional.

4. Cautions
a) do not put your foot in your mouth
b) do not say more than you need to or it will be held against you
c) do not make promises
d) Tenants are applicants are not your friends, converse carefully and professionally.
e) Do not talk about other applicants and tenants.
f) Follow the laws and codes. Be professional. It's a business.

Principles:
1) "Renting is a "business"."
2) The landlord tenant code and local laws and practices are your 'bibles". Know them well.
3) As a landlord, you must know the codes and laws, etc, more than anyone.
4) Landlord/tenant lawsuits are absolutely no fun.

When in doubt, seek legal counsel.
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ladders11
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Re: Can I reject a rental application for too many people on the lease?

Post by ladders11 »

Non- attorney here. Leases generally fall under "joint and several" liability which means that roommates, co-signers, etcetera are EACH responsible for ALL the rent.

To be honest, when I worked for a realty company we never had grown-ass roommates. Rent was cheaper then. We took college students with their parents co-signing. But we never "needed" to accept them because they almost always had no credit. Not bad credit, mind you, just no credit. We knew we'd always get the rent paid since there were so many responsible parties.
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Re: Can I reject a rental application for too many people on the lease?

Post by bayview »

ladders11 wrote: Tue Jul 21, 2020 9:38 pm Non- attorney here. Leases generally fall under "joint and several" liability which means that roommates, co-signers, etcetera are EACH responsible for ALL the rent.

To be honest, when I worked for a realty company we never had grown-ass roommates. Rent was cheaper then. We took college students with their parents co-signing. But we never "needed" to accept them because they almost always had no credit. Not bad credit, mind you, just no credit. We knew we'd always get the rent paid since there were so many responsible parties.
When we rented the house that we now live in, we included in the contract that every tenant would be held responsible for the entire monthly rent if the others left/ flaked out/ were abducted by aliens/ etc. The effect of this was that each tenant stayed on top of the others like hawks to make sure that they all got their rent checks in on time, and that the checks didn't bounce.
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