A landlord posted this question in our Forum recently and since it's one that comes up fairly often, we're turning it into a little quiz to see how well you know your way around property management.
The landlord's lease with his tenant – we'll call him Mr. Nice Tenant – is up for renewal. Mr. Tenant has been in the unit for a year, never causes problems, pays his rent one full year in advance, and wants to know if it's okay to have his girlfriend move in with him. If you were the landlord, what would you say to Mr. Tenant?
A. Absolutely. It's my way of thanking you for being a great tenant.
B. No, I don't want to mess up a good arrangement.
C. Yes, but I'll have to raise the rent and your girlfriend will need to sign the new lease.
If you were looking for a few more Answer options, good for you! We deliberately offered some simplified answers, but Mr. Tenant's request calls for more careful consideration. The landlord who offers a simple answer will no doubt confront complications eventually.
Answer A. – There's nothing wrong with showing gratitude toor a great tenant; in fact, a trend in bigger cities has been to reward good tenants for extending their stay with perks like a rent-free month or a renewal with no rent increase. Responsible tenants who pay rent on time are an enormous asset and keeping them happy should be your goal even with the mostly good news that continues to dominate the rental market. It's better to keep a good tenant than to weed through new applicants to find another good tenant.
Answer B. – Saying “No.” is absolutely the landlord's right. Landlords aren't compelled to accept changes proposed by a tenant in a lease renewal. Of course, the opposite is also true. Mr. Nice Tenant doesn't have to accept a lease renewal that leaves out things he wants (the girlfriend) or adds things he doesn't want (such as higher rent). The landlord will have to consider whether denying the request will prompt Mr. Tenant to look for a new home.
Answer C. – Having the girlfriend sign the lease is a good start if you agree to add an occupant to the property that Mr. Tenant is living in. Lease renewals are the ideal time to tweak original lease terms including raising monthly rent. Both the landlord and the tenant can propose terms through a lease renewal that address issues that have come up through the last year.
But wait, there's more!
Real protection, 'though, will require more than adding the girlfriend's name to the lease. The landlord must vet her just as he presumably did when he signed a lease with Mr. Nice Tenant. Her credit and criminal background should be screened. Her previous landlords should be checked as references, and the girlfriend should complete a rental application just as every other new tenant would.
After all, maybe Mr. Tenant has blind spots where love is concerned. Maybe his girlfriend is a debt-ridden con who's been repeatedly evicted for nonpayment of rent. Adding her name to the lease could subject the landlord to serious risk.
Okay, maybe that sounds a bit paranoid, but when it comes to a hard-earned investment property, we want the landlord to do all he can to protect that investment that may be his sole source of income or could be his retirement plan. And if Mr. Nice Tenant's girlfriend is as nice as her boyfriend, then she'll understand.