Once you have decided to move into an apartment with one or more roommates, you will need to determine how your rental payments will be handled. There are three ways you can set up the lease and determine how the rent will be paid:
a) All roommates sign the lease, and all are then "Jointly and Severally Liable" for rent and damages
b) One person basically becomes the "landlord" of the apartment by renting one or several rooms of the apartment to other people through what is called "subletting."
c) You and your roommates create your own contract.
Subletting is complicated, but it is a great way to have legal backup in the event that you have irresponsible roommates. For example, Joe, Frank and Bill move in together, and they all sign a basic lease (making each party "Jointly and Severally Liable." Joe and Frank are responsible roommates, and have their payments ready on the first of the month, but Bill is broke. Frank and Joe, then, must come up with Bill's rent money since they are all on the same lease together. If they only submit their portion of the rent, the landlord can legally evict all three tenants - even though Bill is the only tenant at fault.
However, if Joe, Frank and Bill had been subletting the apartment - Joe is the sublessor, Frank and Bill are the sublessees, Bill could have been held legally responsible. In this situation, Joe would basically be the landlord of their apartment. He would be responsible for all landlord duties - one of which is collecting rent from his sublessees (Frank and Bill) and turning it in to the landlord of the complex. If, as a sublessee, Bill failed to pay his rent, Joe could evict him from the apartment, or take the rent out of his security deposit, and Joe and Frank would be free to stay in the apartment without being punished for Bill's unpaid rent.
Some complexes do not allow subletting. If this is the case in your complex, it is be wise to protect yourself and your roommates by designing a written contract that spells out your obligations to each other, such as what portion of rent each will pay, responsibility for damages, division of payment for utilities, duration of the rental period, responsibility for finding a replacement upon early termination, and payment of rent until a replacement is found.- which may be better in the long run because in subletting, one person must take on more responsibility as landlord and this could cause battles for power in the household.
Joe, Frank and Bill could set up a contract stating exactly how much rent each party is responsible for:
I, Joe Blow will pay $250.00 rent money on the fifteenth day of each month by five o'clock PM.
I, Frank Dunn will pay $250.00 rent money on the fifteenth day of each month by five o'clock PM.
I, Bill Schnill will pay $250.00 rent money on the fifteenth day of each month by five o'clock PM.
They could then get this document notarized for legal verification. In the event that one of the parties did not pay the $250.00 on the fifteenth day of a certain month by five pm, the other two parties could take legal action against him and avoid a bad mark on their rental history record. Notarization usually costs under ten dollars, and Notaries are easy to find. This simple contract could save you and your responsible roommates from any legal problems in the future.
So, in order to avoid any future disasters with irresponsible roommates, you need to decide how things are going to be handled once you all move in together. Just make sure that all agreements are written and legally verified. Oral contracts don’t impress Judge Judy!
by Kate Kemp