Q: We have been extremely fortunate in renting out our town house, which we have done for many years. Despite our success, we still are unprepared to combat the following pitfalls: First, how to get credit checks on prospective tenants; and second, what is the correct lease language to ensure that "group tenants" clearly understand that the total rent must be paid even if one or more tenants vacate or fail to pay?
A: I am pleased to learn that you have been having good tenant experiences; many people do, but many landlords do not.
Before responding specifically to your two questions, there are some general comments to be made about renting. Different jurisdictions, such as the District, Maryland and Virginia, have vastly different laws and procedures that impact the landlord-tenant relationship. And these laws are constantly changing--whether through legislation, court decisions or administrative agency rulings.
You should periodically contact the local landlord-tenant office in the jurisdiction where your house is located to ask for updated information. Some government offices even have handy booklets that will explain the law to you.
You should also make sure that the lease you use is up-to-date. Many landlords have been using the same lease year after year. If the laws or rules change, your lease may not accomplish what you intended.
Let's look at your two questions.
First, about obtaining a credit check on a prospective tenant. This is not always easy, but I am not sure that a credit report is really necessary. You should obtain basic facts from your prospect in three general areas:
* Where do they work and for how long and what is their salary. Employers won't provide information but will generally confirm or deny information when you ask them. For example, the employer will not tell you how much John or Sally makes. But if you ask to confirm "that John or Sally makes XX dollars per month," and has been working there for YY number of years, most employers will give you an answer.
* Where have they lived in the past? You should get the name and phone number of their immediate past landlord. If they are reluctant to give that information out--or if they give you some sort of excuse--my only advice is to be wary.
Keep in mind, though, that many landlords may not tell the truth--good or bad. There is a growing body of law that has held people giving references responsible for damages and thus you may find that many landlords will be reluctant to get involved. In fact, more and more landlords are starting to take the same position that employers take, not disclosing any information but confirming or denying what you ask.
* You should get the number of a bank account and confirm this information with the local bank.
But after all this, it is my personal opinion that the best test is just to "eyeball" the prospective tenant, and then talk to him. Explain that this is your personal property and that you care for it--and expect that the tenant will care for it as well. You will get "vibes" during your conversation, which may be as valuable as, if not more so than, reviewing a credit history.
You also asked about group homes. Here are some suggestions:
* The lease should state that each tenant--jointly and severally--is responsible for the entire monthly rent.
* The lease should also state that should a tenant vacate, you, as landlord, will not be responsible for finding a replacement tenant, although you want to meet with the replacement before he moves in. If you find that the new person is acceptable, using the same process as discussed above, he should sign the lease.
* Partial security deposits should not be returned when one tenant moves out. The vacating tenant must handle this directly with the new person, who should repay that tenant's portion of the deposit. Keep in mind that the security deposit is to be returned at the end of the lease term, if there is no damage. You, as landlord, are only obligated to return it after all tenants on the lease have vacated and you have found no damage to your property.
Being a landlord is a mixed blessing. Proper precautions before the tenants move in will go a long way toward avoiding future problems.
Kass is a Washington lawyer. For a free copy of the booklet "A Guide to Settlement on Your New Home," send a self-addressed stamped envelope to Benny L. Kass, Suite 1100, 1050 17th St. NW, Washington, D.C. 20036. Readers may also send questions to him at that address.