Any landlord or property manager already knows dealing with tenants can be a challenge, from keeping your business profitable to keeping your renters happy. However, there are always unique issues you don’t anticipate dealing with, like someone living on your property who isn’t listed on the lease.
It’s easy to cross the line between guest and tenant, and renters don’t always realize the problem. The tenant may have invited a friend or relative to stay on their couch while getting on their feet. Other times, a tenant may have their significant other moves in without clearing it with you first.
The bad news is, this issue arises too often. The good news? You have effective options and recourse when it comes to “long-term guest” situations. We’ve broken down what to know, look for, and how to resolve the problem.
What’s the Difference Between a Guest and a Tenant?
Let’s keep it simple. A tenant is someone who signed your lease or rental agreement while a guest isn’t listed at all. If the individual in question does not have their name on the lease, they aren’t a tenant. Period.
The difference matters because landlords and property managers cannot hold guests legally liable for apartment damage. Anyone not listed on a rental agreement also isn’t legally responsible for rent payments.
Guests are the individuals your tenant invites to the property. They don’t legally live there or pay rent for the property. The term “guests” in an apartment setting can mean several different things, including:
- Significant others who may sleep over a few nights a week
- College students who return for spring break or other short breaks (not including summer)
- Friends or relatives who visit and stay at the property for short periods. The visit usually doesn’t exceed two weeks within 6-months.
- Any hired help that doesn’t live on the property. Examples include full-time cleaners, nurses, pet sitters/walkers, and nannies.
When Does a Guest Become a Tenant?
It’s always easier to deal with an issue before the guest moves into the apartment or property. Whether they’re on the verge of moving in their furniture or already claiming space as their own, here’s what to look out for when it comes to guests who overstay their welcome.
Telltale Signs That a Guest Has Become a Tenant:
They pay rent. If you receive rent payment from an individual who frequently stays or lives on the property but is not named on the lease, they’re considered a tenant. Get their names on a lease pronto!
They have mail addressed to the property. Receiving mail at a property is a key indicator that an individual has established residence, whether you know about it or not.
They put in maintenance requests. It’s bold of someone who doesn’t live at the property to request maintenance. However, it’s a sure sign that they aren’t a guest any longer.
They move in. If you see a U-Haul, you’ve got a new tenant on your hands. If they move in pets, furniture, or other belongings, you shouldn’t consider them a guest.
They spend every night at the property. Do you see this person more than you see your actual tenant, as in they spend almost every night at the property?
They have made a verbal agreement with the tenant. If a guest has made an oral agreement with the tenant, then you may consider them a tenant, as well. For example, “You can stay here if we split the rent” or “You can live here until you get back on your feet” are verbal agreements that indicate the individual is now a tenant.
Your tenants may wonder what the big deal is if a guest moves in as long as the rent gets paid. Many landlords charge more for couples or multiple people occupying a unit and otherwise earn more rental income. When a guest moves in, a landlord should have the right to negotiate a new and longer lease agreement.
Included utilities like water are also an issue. An unexpected tenant drives up utility costs and also increases the wear and tear on the apartment. Landlords who are proactive about turning guests into tenants can avoid creeping expenses and overhead.
How to Proactively Prevent Guests from Becoming Tenants
It can be challenging to keep calm when you feel tenants are taking advantage of their lease terms with guests who never leave, but it’s essential to be proactive instead of reactive. Instead of hoping the issue never comes up, here are some ways to prepare yourself and prevent guests from becoming tenants.
1. Know your State’s Laws
States have their own laws regarding guests who decide to move in. In New York, it’s illegal for a landlord to mandate that only those named on the lease occupy or live in the apartment. The tenant is legally allowed to share the apartment with their immediate family and one other individual.
In California, however, a landlord may ask a guest to sign a lease agreement if the guest has overstayed the period outlined in the lease. Additionally, if you accept rent payment from said guest in California, you may have initiated a tenant-landlord relationship. The new relationship guarantees the guest the rights and protections of any tenant that the lease lists.
2. Review your Lease Agreement.
Does your lease agreement have a “use of premises” clause? If not, add one to any new lease agreements. A “use of premises” clause clearly defines how the tenant is allowed to use the premises in a way that doesn’t breach the covenant of quiet enjoyment.
In this clause, you may limit the number of guests and how long they stay on the property within reason.
It’s imperative to have a “use of premises” clause in your agreement as early as possible. Landlords cannot add in the clause after the tenant has already signed a lease. You can only amend this clause if your tenant agrees to sign an updated lease agreement.
3. Send a “Notice to Quit” to your Tenant.
If you’ve already noticed a guest-turned-tenant situation, you can still put a stop to it. Send your tenant a Notice to Quit letter that outlines their breach of the lease agreement, which will give them time to rectify the situation.
Keep a copy of the Notice to Quit letter for yourself. It serves as a record of the infraction if other issues arise or the tenant refuses to comply.
Dealing with a guest who has overstayed their welcome and turned into a tenant can pose challenges. It’s best to work with a professional and discuss your options with an attorney. They’ll advise you on how to comply with your state’s laws and your current lease.
What if you don’t mind having an additional tenant or long-term guest? Talk to your current tenant and guest about adding them to the lease agreement as soon as possible. Outline the issues with the current arrangement and offer a new lease agreement if they wish to continue living on the premises. You may also be entitled to increase the rent when you add another person to the lease.
In many cases, the guest will be happy to sign a lease agreement. If they are noncompliant, you may have to move forward with the eviction of both tenants on the grounds of lease violation.