What To Do With Multiple Unrelated Tenants?

It is not uncommon, particularly if your rental home is anywhere near an urban center or college campus, that you will receive an application for multiple unrelated tenants. It’s also common in these situations to receive requests in the middle of the lease term to approve a change of the occupants. It’s important that rules for these situations are known and uniformly enforced.


One additional problem in these scenarios is that one or more proposed tenants will have limited or no credit or rental history. For the purpose of this discussion, we are going to assume these are legal adults able to enter a contract, so turning to a parent for additional support may not be an option. On college campuses the parents are usually still involved so lets just leave it that you can always ask. You still should be prepared as you review applications that young adults in this situation may not be able to provide this type of additional support.

Qualifying For The Rental

What to do when there are multiple unrelated tenant applicants and only one who really qualifies. Actually, having one who qualifies is a great thing! Ideally, each applicant could individually qualify. This is an unlikely scenario. If combined, the income of the applicants is barely 3x the rent, then the need for a co-signor increases. The reason is that if one tenant moves out the other ones would not qualify in a combined situation. Yes, you can pursue the tenant who moves out to continue to make payments. Legally, that is required. Often, the nuances of a legal agreement may not be that important to the departed tenant and legal pursuit of payment will extend way past the time of the lease.

When multiple unrelated tenants make application they are considered as a group The lease obligation is a joint and several one meaning each applicant is responsible for the full amount of the lease. If co-signors are required, they are also co-signing for the entire terms of the lease, not just a portion as represented by their respective association to one or more of the tenants. Therefore, the burden of strengthening the application to work within our normal parameters (income, credit, rental history) is on the group. A proposed tenant with an eviction might slip through and be approved based on a really strong overall group. The entire group of tenants and co-signors are equally considered for approval. They are all obligated for the entire amount of the lease.

As a property manager or owner we do not want to be chasing multiple parties for incremental parts of the lease obligation. The parties to the lease all need to understand they are individually obligating themselves for the entire contract. One for all, all for one. The reality is these scenarios do occur and they are not a bad option if managed correctly by following a standard set of guidelines for the approval process.

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WILMOTH Group is headquartered in Indianapolis, Indiana. We focus on providing creative local solutions for a variety of residential real estate needs including, properties for sale, property management services in Central Indiana.