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House rules for room renters

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The tough economy has prompted more people in recent years to rent out rooms in their home for extra cash and it can be a lucrative deal for both parties.

Before agreeing to allow someone to move in, there are things you should consider for happy living and things you should know to protect you in the event the arrangement goes south. 

America Now interviewed a woman in Charlotte, N.C., who agreed to rent a room out in her house. Tina requested that we not use her last name.

Tina lost her full-time job three years ago. During this career transition period, she has worked a variety of temporary jobs.

When her bills started piling up, she decided to search for a roommate to help make ends meet and she posted an ad online.

"Some people said they were glad I was 50 because they were worried I would party every night," Tina says while laughing. "That made them feel better—the older women looking for a place to stay."

When she narrowed the responses to a viable candidate, Tina decided to draft a rental agreement.

"I looked online and almost did one of the ones online, but it was 10 or 12 pages long and I looked through it and just said I don't think all this stuff is necessary," Tina says.

Instead, she wrote up a one-page lease agreement containing only what she deemed important.

America Now Reporter Jeff Rivenbark spoke with Tom Bartholomy, president of the Better Business Bureau serving Southern Piedmont of North Carolina, who says oversimplifying a rental agreement may not be the wisest thing to do.

"You have to act as a landlord would act," Bartholomy warns. "You have to have a lease that protects you, and the person renting that space from you."

He says you have to treat the relationship between the landlord and the renter as a business.

In addition to charging a security deposit, be sure to charge a fee to cover your expense for obtaining both a credit check and a background criminal check.

Most landlords obtain one or the other, but Bartholomy warns that's not good enough.

"Not only do you want to make sure they can pay their rent; you want to make sure they're not a convicted felon," Bartholomy adds.

Don't forget to ask for references, but keep in mind, most applicants are only going to provide you with the names of people they know who will say good things about them. That's why a credit check and a criminal background check are critical. 

"You want as much information as you can get because it's your safety, your family's safety, your home security that you're putting at risk," Bartholomy says.

Once you feel comfortable offering someone a lease, be sure to go over the house rules, which could include chores the tenant is responsible for doing, where they should store their food, and any other restrictions they need to know.

"It's very important, because that's what's going to cause the friction if you are allowing someone to live in your house," Bartholomy says. 

If you're like Tina and have lived most of your life without a roommate, start out by offering a short-term lease. If things don't work out, you won't be locked into months of misery.

You can find a variety of rental applications and leases online.

If you have never had a renter living with you, be sure to check with your insurance provider to see if having a tenant will cause your homeowner's insurance to increase.

Regardless of the research you do to identify the right roommate, Tina says something is inevitably going to happen that will irritate you and that's why landlords need to be flexible. 

"My mother used to say there's no house big enough for two women, but I'm trying to prove her wrong," Tina says.

Additional Information:

The following information is from Tom Bartholomy with the Better Business Bureau of Southern Piedmont/Charlotte, NC.

  • If you are considering renting a room in your house to someone, you should treat the arrangement similar to an apartment landlord by having a lease that protects both you and the renter.
  • There are several websites online that offer leases in which you can download, or that provide a template in which you can fill in the blanks.
  • Your rental application should contain a section in which the prospective tenant must check or authorize which allows the landlord to check the prospective tenant's credit history. This will let you know if there are any potential issues of concern pertaining to their ability to make their monthly rent payments to you.
  • The only way to access a person's credit history is through their Social Security number. You have to be able to show to the federal government that you have good cause to be able to access someone's credit history.
  • You do not need a prospective tenant's permission to have a criminal background check conducted.
  • When conducting a criminal background check, you should check to see the prospective tenant has been convicted for prior crimes or is a convicted felon.
  • You can do a criminal background check online, but if the person has moved from one state to another, it may be difficult for you to perform a thorough check. You may need to hire a company to perform this service for you and that could cost anywhere from $50 - $100.
  • Once you know how much a credit history check and a criminal background check will cost, factor these expenses into your application fee in which the prospective tenant must pay up front. Do not allow them to charge this fee to their first month's rent because you may decide not to rent to them pending the results of these checks.
  • Before a person moves into your home, write up a list of rules for your home. It should cover where the tenant should place their food in the refrigerator, pantry, and any chores in which they are responsible for assisting with. You may want to establish when the prospective tenant is allowed to wash/dry their laundry, when the lights in the common areas should be turned off, and when your household observes quiet time at night.
  • Some landlords come up with long lists containing 20 or more items in which a prospective tenant must sign and agree to before they are allowed to rent a room.
  • When you are vetting a prospective tenant, you should base your decision on both subjective and objective information. Subjective data might include comments from the prospective tenant's references or prior landlords. Objective data would include a credit check and a background criminal check.
  • Speaking to a prospective tenant's references it not good enough. You also need to check their credit history as well as their background criminal history.
  • When someone moves into your home, you need to devise a "move-in process" and a "move-out process." During move in, the landlord and the tenant should both walk room-to-room to identify the condition of each area noting any visible signs of wear and tear. Both parties should sign this document. Before the tenant moves out, you should walk room-by-room with the tenant noting any damages that have occurred during the term of the lease. The landlord should compare this document with the original one in which both parties signed upon move in. The landlord should inform the tenant if conditions of the home match up to the way they were when the tenant first moved in, the tenant will qualify to get their security deposit back. It is not necessary to have a notary review these documents.
  • If a prospective tenant previously lived in an apartment complex, find out where and call the property manager to see if the tenant was tardy in making those payments or left without fulfilling his/her financial obligations.
  • Just as you have the right to obtain personal information about a prospective tenant, you also have the responsibility to keep that information secure.
  • Consider buying a refrigerator to keep in the prospective tenant's room if you do not wish to have their food items in the main refrigerator in the kitchen.
  • Designate a section of your pantry and/or kitchen cabinets for the prospective tenant's food items.
  • If you have never rented a room in your house to someone, you may want to start off with a short-term lease. If you later run into problems with your tenant, at least you have the assurance of knowing the lease is not for a year or longer.
  • Some other rules of consideration include: Will the tenant be allowed to bring a pet into the house? Will smoking be allowed inside your home? Can the tenant have overnight visitors? What curfew should your tenant and their guests adhere to?

Read Laws on Renting a Room http://www.ehow.com/facts_5028453_laws-renting-room.html for information pertaining to laws that cover both the tenant and landlord. 

  • Renting a room is different from renting a house or apartment, because there are no laws in place requiring a lease. If a lease is signed, all parties must abide by the rules of the lease.
  • Laws between a tenant and landlord only apply in situations where the renter and owner sign a lease between them. If there is no lease, the tenant/landlord laws don't apply.
  • The law on renting rooms states that the landlord cannot raise the rent without alerting the renter in advance. The renter also cannot demand that rent be lowered.
  • If the owner or landlord determines that he wants to end the agreement, he must give the renter proper notice. The renter must also give notice if he plans to move out earlier than the agreed-upon time.
  • If the renter attempts to move out prior to the agreed-upon time, she is responsible for the months leading up to that month. For example, if the renter agreed to stay until June and moved out in March, she's still responsible for the rent due in April and May.
  • All landlords are required by law to claim any money they make from renting a room. They must include this income on their taxes and pay any taxes due.

Copyright 2013 America Now. All rights reserved.

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