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What Is a Room Rental Agreement? Things a Live-In Landlord Needs To Know

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One way for cash-strapped homeowners to bring in more income is to rent out a room on their property. But if you decide to go down this path, you’d better protect yourself, financially and legally.

Enter: The room rental agreement. This type of contract outlines the rules and responsibilities required of the tenant and landlord who will be sharing a space together.

A room rental agreement covers a single room in a house, in contrast to a traditional lease that covers an entire unit with its own entrance, says Brentnie Daggett, a rental expert at Rentec Direct, which provides online property management solutions.

Having a room rental agreement in place can bring peace of mind and help avoid unnecessary stress down the line. But before advertising a room for rent in your home, take heed of these guidelines about room rental agreements.

When is a room rental agreement needed?

A room rental agreement is needed when a room in a dwelling is rented out to a tenant. This type of agreement may also be needed when one renter sublets the room.

“In either case, the room rental agreement serves as a detailed outline of the tenant’s financial responsibilities and guarantees that the landlord and tenant understand the behavior expectations while living together,” says Daggett.

What a room rental agreement should contain

In addition to outlining the financial obligations of the tenant, a room rental agreement should include rules regarding housekeeping, noise, and general conduct within the space. This entails rules about pets, houseguests, painting the room, parking, or whether the tenant can sublease the room.

The room rental agreement should include the most important conditions, including the following:

  • The names of all parties living in the dwelling
  • The address of the rental property
  • The number of bedrooms and bathrooms
  • Which areas are common spaces and which areas are private
  • The length of time the space will be rented
  • When rent is due, how it should be paid, and the late fee
  • If a security deposit is required
  • How bills will be split up
  • The owner’s policy on entering the tenant’s room and how much notice must be given before entering
  • Specific house rules
  • How much notice must be given before the renter moves out
  • Signatures of the landlord and tenant

Consequences of not having a room rental agreement

Room rental agreements are not legally required, but they can protect both the tenant and landlord from any future disputes. The landlord will be protected if the tenant misses a rent payment, suddenly leaves a vacant room, or damages the property.

“Without a formal written rental agreement, it would be difficult to recoup lost rent or reimbursement,” says Daggett.

The room rental agreement protects the tenant from things like surprise fees and rent increases.

What happens if you break the room rental agreement

If the tenant breaks the terms of the agreement, the landlord has the right to evict the tenant, according to local state law. Should the renter suddenly leave, the landlord can file a claim in small-claims court to recover rent per the agreement terms.

Many states have differing guidelines on tenant rights if the landlord lives on the property, says Daggett.

“As such, it is very important to understand your specific state’s renter rights before creating a room rental agreement,” adds Daggett.

Visit the website for the U.S. Department of Housing and Urban Development and click on your state for more information. The State Landlord-Tenant Rights Guide by Avail is also a thorough resource.

How to create a room rental agreement

A room rental agreement template is a handy way to get your contract started, but proceed carefully. To make sure you’ve covered all of your bases, have a legal expert give it a once-over.

“Even if you use an online template, it can be a great idea to consult a lawyer familiar with landlord-tenant law and have them review your final product to ensure your stipulations are legal,” says Daggett.

The post What Is a Room Rental Agreement? Things a Live-In Landlord Needs To Know appeared first on Real Estate News & Insights | realtor.com®.

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