Landlords often question whether or not all occupants living in a property should be on the lease. Technically, if someone isn’t responsible for paying rent, does it matter? In truth, yes, it matters, and this article will explain why.
The purpose of a lease is to get everything in writing
The reason you create a lease is to document the terms of the rental agreement between you and your tenant. This includes how they may use the premises along with who is allowed to live in the home with them. Often, people live in a home who are not tenants; they are occupants. It’s common for a lease to restrict additional occupants to minor children and dependents.
It’s important to name everyone on the lease because you might need to hold your tenant accountable for lease occupational violations at a later time. For instance, if your lease forbids subletting, and your tenant breaks this clause, they might tell the judge the person is simply living with them for free or staying as a guest. Without a written policy on guests, that story might be accepted by the judge.
When you outline occupant and guest policies in the lease, a tenant can’t get away with lying about unauthorized occupants. If they try to say a sublessee is really just a guest, they’re still in violation of the lease if that person isn’t explicitly listed.
Written leases are easier to enforce
Although most states recognize verbal agreements, it can be tough to prove specifics. A written lease is easier to enforce because the terms are spelled out plainly and your tenant has signed in agreement.
Since written leases are superior, it makes sense to put every person in the house on the lease regardless of age. If they’re considered a tenant who is responsible for paying rent and communicating maintenance needs to the landlord, they’ll sign the agreement. Otherwise, they’ll just be listed as an occupant.
When you list people as occupants, they can’t be held responsible for paying rent, but they are required to follow the lease rules. Having them listed in writing makes their actions enforceable should they choose to violate the lease agreement.
Unknown occupants can multiply fast
If you don’t have a policy that all occupants must be listed on the lease, your tenant might end up letting too many people live in the unit. Most of the time, the concern isn’t necessarily a fire code violation, although that is certainly an issue with studio apartments.
The bigger issue is that the more people who live in the home, the more liability they pose to your property. If you have six people living in the unit and only three are on the lease, the other three won’t feel the same sense of responsibility and might engage in carless acts that cause property damage.
Evicting unauthorized occupants is easier with a lease
You probably know that it’s extremely difficult to evict someone, even when they aren’t on the lease. You’ll have to go through a lengthy (and costly) process to remove unauthorized occupants from your property.
This process is easier when you have documentation proving they were never authorized. With a policy for documenting all occupants, you can also easily prove that your tenant violated the lease, which will help you win your eviction cases.
Should you add adults as occupants or tenants?
Generally speaking, most landlords require adults aged 18 or older to be listed as a tenant, that way they are legally responsible for paying for rent and damages. However, sometimes adult children are still listed as occupants when they just turn 18. Even when an adult child of your main tenant hasn’t yet entered the workforce, it’s important to list them as a tenant regardless.
If they’re 18+, make them a tenant.
If they’re under 18, make them an occupant.
Doing this will discourage your main tenant from letting their friends and family move into the unit and “freeload” off of them and you. In the end, you might need to recover damages in court and if your main tenant leaves, you’ll have a hard time pursuing the other people, especially if you don’t know their legal names or have their contact information.
Put everyone on the lease, including minor children
To protect your investment property, make every adult a signed party on the lease, and list all occupants, including young children. One day, you may have an experience that will make you glad you followed this rule.