Dimensions Online - Redbook Blues: Room for Improvement
As multifamily housing owners/operators and our residents adjust to the current turbulent economic and social environment, I am reminded of the tremendous resources available to us as AATC members. Whether it is a fair housing class or the Business Exchange, AATC offers the tools we need to successfully own/manage rental property. From education to legal services and networking and advocacy efforts, AATC helps us thrive in increasingly challenging times.
Best of all, AATC’s professional staff is a great resource when you have questions or concerns about industry best practices. Often, the staff helps our members find the answers and operational insights they need in the REDBOOK. Some inquiries are simple and require a quick reference to a form or legal commentary in the REDBOOK. Sometimes, a member just wants the assurance that they are following common residential rental property practices and procedures.
Often, the solution lies within the TAA Lease. Sometimes, the questions are legal in nature and beyond the scope of the staff’s expertise. AATC staff are not attorneys and cannot give legal advice. When a staff member receives a legal-type question, members are referred to one of AATC’s Legal Service attorneys. AATC members have access to the best landlord-tenant attorneys in Texas through our Legal Services program. To learn more about our Legal Services program go to: https://www.aatcnet.org/legal-services-program
Over the years, roommates and how to handle them has been a frequent topic of inquiry. Given the increase in rents and the impacts of inflation, we anticipate an increase in renters seeking roommate arrangements to help with their rent cost burden.
Whether it is renters seeking to double up until their finances improve, college students, boyfriend-girlfriend, or single parents sharing living expenses, having unrelated individuals as parties to a lease contract has both rewards and challenges for the rental housing owner/operator.
After about a month, the initial excitement of having an apartment with a friend has worn off, and reality sets in. Like all partnerships, when these arrangements work, they work well; when they do not work, it is bad, really bad. Following are industry best practices when dealing with roommates.
First, take the extra time to fully explain to all parties their joint obligation to each other and the landlord. Like pre-marital counseling, this is an opportunity for the potential roommates to think about and discuss problems that might arise and what the resolution of those problems should be. The most important benefit of this discussion is to help prevent problems from ever arising in the first place. For example, rent is due the first. As a landlord, you do not care who pays, but you do care how, and most importantly, when rent is paid. You can require one check or one electronic payment. If rent is not paid, then they ALL can be evicted. If damage occurs to the rental unit, ALL are responsible. If one roommate violates the lease, ALL roommates get a lease violation. As we say in Texas: “Y’all means All.”
Second, ninety-nine times out of a hundred, ALL roommates will be leaseholders. In this case, ALL are subject to meeting rental criteria (credit and criminal history, income, length of employment, etc.) and responsible for adherence to the TAA Lease.
Third, AATC members encounter roommate situations most often with student housing and college-age renters. It may surprise you to learn that cities within AATC’s jurisdiction have more than 150,000 college students (UTA, 50,000; TCU, 12,000; Texas Wesleyan, 1,900; Tarleton, 10,500; SWBTS, 2,500; and TCC, 53,000). Frequently, students will need a guarantor to ensure financial obligations. If guarantors are required, be sure to use the TAA Guarantor form. Roommates could save themselves (and their guarantors) a lot of headaches if they put in writing what they assumed or intended when signing a lease. TAA also has a TAA Student Housing Lease form.
Fourth, if there is a guarantor(s), state law covers this relationship. The REDBOOK has an outstanding article on the role and responsibilities of a guarantor(s). Basically, Texas law ensures that rental agreements specify the term (length of time), the amount of rent, and other financial obligations of the guarantor. As a practical matter, good communications between the landlord and the guarantor(s) are critical. They need to know what their responsibility is if the leaseholder(s) fail to meet their obligations under the lease.
Finally, believe it or not, couples fall in and out of love, college students get homesick, and roommates have conflicts— relationships change when folks start keeping house together. Landlords make lousy relationship counselors. Do not even try to go there. It is not your job – you and your staff are not Dr. Phil. Frankly, from your perspective, you should not care about the roommate drama, so long as you are being paid everything you are owed on the first of the month and there are no other lease violations.
If a roommate moves outs, unless ALL parties agree (most importantly you, the landlord) to release them from their responsibilities, then they are still obligated under the lease. If you and ALL roommates agree to a change, TAA recommends you use the TAA Lease Addendum to Add to Remove Roommate. This form is a great way to ensure that each leaseholder understands their obligations during the remainder of the lease.
The bottom line is roommates make great residents, especially if you take the time to communicate their obligations to you and each other.
Nicole Zaitoon, Allied Property Management, is AATC’s 2022 Government Affairs Committee Chair and a member of AATC’s Board of Directors.
