Did you find out unauthorized people living in your Detroit investment properties? Whether it's a new roommate you didn't know about or a family member "crashing" on the couch for a while, anyone who stays in your rental longer than a short visit (and isn't on the lease) could be considered an "unauthorized" resident in your rental property.
Allowing people to live in your property when they aren't on the lease agreement puts your rental (and income) at risk. If you've found more tenants in your Detroit Michigan, rental than are on the lease, here are the expert property management tips to follow to handle the situation!
Who Is "Unauthorized?"
In the simplest terms, if a person stays for any length of time in your rental—but they aren't on the lease—they are an unauthorized tenant. Every person living in a Detroit rental property must be on the lease. Whether it's a few weeks or a few months, anyone who sleeps on the couch or in the spare bedroom without paying rent or being on the lease violates the rules.
It's okay for your residents to have overnight guests for a few days or even a couple of weeks. However, when those "couple" of weeks turn into a month or two, you have an "extra" resident that you didn't approve for the property. Long-term guests could potentially be subletting a room in your rental property without your knowledge or approval, and that's also a lease violation.
When listed tenants allow any of the following things to happen in rental properties in Detroit without permission, landlords must take action:
- Add a roommate to offset rent costs
- Get married or allow a significant other to move in
- Let overnight guests overstay their welcome
- Use your property as an Airbnb or sublet
- Swap a current roommate for a different roommate who isn't on the lease
Sometimes tenants don't understand the importance of updating the lease when a roommate leaves or a spouse moves into the home. A landlord should keep in touch with residents and conduct routine inspections to make sure they're always aware of who really lives in the property vs. the names on the lease.
Be Aware of the Liabilities
First, landlords must understand the liabilities and consequences of unauthorized tenants in a property. You could be liable for situations, including:
- Someone injures themselves while living in the property, but they aren't on the lease
- Approved tenants allow someone to move in who conducts illegal activities in the home
- A long-term "guest" causes property damage, and you have no way to hold them accountable or recover repair costs
- Your rental could exceed legal occupancy limits, leading to fines, dangerous living conditions, and losing the ability to operate your rentals
Keeping an eye on the people in your Metro Detroit rentals is important! If you own multiple investment properties, a property management company can help you monitor all of your rentals and enforce lease rules.
What Can Landlords Do?
To reduce the potential risks and financial loss of extra people in your property, investors must take action. When you discover extra residents in your property:
- Contact the tenants on the lease agreement and talk with them about the situation
- Reference the lease and point out that it requires all tenants to be on the lease
- If the "extra" tenant plans to stay in the rental, require them to fill out an application and go through the screening process
- If they refuse to comply, work with your tenants to get the additional "guest" to move out
- When they go through the proper application and review process, then meet your criteria, add them to the lease and adjust the rent amount and deposits accordingly
Anyone who wants to live in your rental must pass your screening process and be approved. If a long-term guest goes through the screening process yet does not meet your criteria, they must move out of the property.
Work with your legal counsel and a Detroit property management company to screen all potential applicants and handle situations when unauthorized residents won't comply with the lease. If your approved renters won't add a new roommate to the lease, enforce penalties and proceed with eviction, if necessary.
Protect Properties from Extra Tenants with Detroit Property Management
"Extra" residents can lead to "extra" problems that Detroit landlords don't need to deal with! When building a real estate investment portfolio and tremendous cash flow, investors must keep an eye on details like who actually lives in each rental vs. the names on the lease. To protect your rentals from unapproved tenants, work with a property management company to handle renter screening, leasing, routine inspections, and rule enforcement.
Own It Detroit is your best resource to protect your real estate investments! If you're dealing with more people in your rental than are on the lease, contact us to resolve the situation for you.
What do real estate investors need to know about protecting their properties? Find out in our free guide, "Protecting Your Investment Property: A Guide."