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Rental Agreements vs Roommate Agreements

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  • 03-04-2017, 10:30 PM
    KayteeRM
    Rental Agreements vs Roommate Agreements
    My question involves landlord-tenant law in the State of: Michigan

    Ok, for starters, I am not renting but I live in a condo which have their own by-laws (which seem similar to landlord/tenant laws, in my opinion) which I'm trying to figure out to see if I can have a roommate help with my monthly mortgage and utilities or not.

    The by-laws state: No portion of a Unit may be rented and no transient tenants may be accommodated therein;

    The association board member I spoke to said that what they take it to mean is that I can have a roommate but I can't charge rent and I can't have a formal rental agreement. However, I can't afford to support a roommate in my place with just my salary. I need to have them help with payments, especially since I struggle with them as it is. I also need to be able to have some sort of legal protection just in case the roommate doesn't work out. I ran across roommate agreements online and I think I'm seeing them as different things.

    Based on this information, does it seem like I can legally use a roommate agreement to help out here and will it protect me from any problems that may come from said roommate?

    Thanks.
  • 03-04-2017, 10:42 PM
    Mr. Knowitall
    Re: Rental Agreements vs Roommate Agreements
    Do you own the condo, or is this somebody else's condo?

    If you break the condo rules by renting to a roommate, then you would be subject to whatever consequence is imposed by the community rules and bylaws. That would most likely be a fine (to the owner).

    Your obligations to a roommate who pays rent are those of a landlord. If you rent to a roommate in violation of the condo rules, and are caught, you can't simply ask a rent-paying roommate to leave. They must depart voluntarily, be given proper notice to terminate their tenancy, or be evicted following proper notice and for cause.

    Any agreement that involves the payment of rent, be it cash or some other form of rent, makes your roommate your tenant. Calling it a "roommate agreement" doesn't change that fact.
  • 03-04-2017, 11:05 PM
    KayteeRM
    Re: Rental Agreements vs Roommate Agreements
    I own the condo.

    One of the things I ran across before finding this site, which made things seem different was this article...http://www.nolo.com/legal-encyclopedia/renting-house-apartment-with-roommates-29865-2.html

    The first paragraph from that page stood out to me...

    "Roommates can make lots of informal agreements about splitting rent, occupying bedrooms, and sharing chores. Your landlord isn't bound by these agreements, and has no power to enforce them, but making an agreement can force you and your housemates to take your cotenancy responsibilities seriously"

    and then a little farther down...

    "Most of the agreement won't be legally binding -- that is, a judge won't order a tenant to clean the bathroom. Judges will, however, enforce financial agreements, such as how you've agreed to share rent."

    It was all an interesting read, but I wasn't 100% certain if I could use this as a means to handle this situation. But based on this is what made it seem like roommate agreements were different than formal rental agreements. Of course, I may be misinterpreting something too.

    I forgot to mention that what specifically stood out from those quotes was that the landlord wasn't bound by those agreements and that a judge will enforce the financial aspect of it.

    The fact that chores can be included in roommate agreements made it seem different than formal rental agreements as well.
  • 03-04-2017, 11:39 PM
    eerelations
    Re: Rental Agreements vs Roommate Agreements
    The article you're citing has nothing to do with whether or not you can rent out space in your condo. The article is about agreements roommates can enter into amongst themselves, whether or not you're allowed to rent out space in your condo is governed by your condo by-laws.

    If your condo by-laws state that you cannot rent out part of your condo to a tenant (and it appears that's what the by-laws state), then you cannot rent out part of your condo to a tenant.
  • 03-05-2017, 05:58 AM
    KayteeRM
    Re: Rental Agreements vs Roommate Agreements
    Ok, however I had already mentioned that I am allowed a roommate, I just couldn't form a rental agreement, which seems different than a roommate agreement. I was just trying to double check what I've been learning.
  • 03-05-2017, 06:38 AM
    eerelations
    Re: Rental Agreements vs Roommate Agreements
    Rental agreements are completely different from roommate agreements. Rental agreements are about how much rent is to be paid by the tenant (your prospective "roommate") to the landlord (you). Roommate agreements are about who does what (e.g., household chores, meal preparation etc.) during the term of the rental agreement.

    Your condo by-laws allow you to have another person living in your condo with you, as long as you don't charge that person any rent. And (obviously) if you're not charging your roommate rent, you therefore cannot have a rental agreement. (No rent = no rental agreement.)

    So if you want to have a tenant (i.e., someone who pays rent to you) in your condo, a roommate agreement will not cover the situation. You will also be liable for any penalties (fines, liens, etc.) that the condo board applies to you for breaking the condo by-laws.

    Finally, yes the condo by-laws are binding and enforceable. You agreed to them when you bought the condo.
  • 03-05-2017, 09:55 AM
    adjusterjack
    Re: Rental Agreements vs Roommate Agreements
    Quote:

    Quoting KayteeRM
    View Post
    Ok, however I had already mentioned that I am allowed a roommate, I just couldn't form a rental agreement, which seems different than a roommate agreement. I was just trying to double check what I've been learning.

    Understand this. You don't have to sign a contract to have a contract. The minute your "roommate" hands you money (or anything of value) in exchange for living there, no matter how you spin it, he/she is your "tenant" and you are his/her "landlord" and you have a "rental agreement" (contract).

    Granted, it's an informal (oral) contract but the upshot is that you are still renting out part of your condo and (trust me on this) any roommate you find will expect that the arrangement (again, no matter how you spin it) will be governed by applicable landlord tenant law.

    Another thing: when your roommate starts parking his/her car in the HOA parking areas and uses his/her key to access HOA facilities, questions will be raised and that board member will have amnesia about the statement that you can have a roommate.

    I also suggest you google something like "roommate horror stories" and learn why it's an incredibly bad idea to have one.
  • 03-05-2017, 01:04 PM
    eerelations
    Re: Rental Agreements vs Roommate Agreements
    Quote:

    Quoting adjusterjack
    View Post
    Another thing: when your roommate starts parking his/her car in the HOA parking areas and uses his/her key to access HOA facilities, questions will be raised and that board member will have amnesia about the statement that you can have a roommate.

    The board member doesn't need to have amnesia. While he/she told OP she could have a roommate, he/she qualified this by also saying that OP could not charge rent to said roommate.*

    (There are plenty of possible situations where OP might get a roommate and not charge rent - if she invites her child/parent/sibling/BF to come live with her, for example. I have a friend who invited her sister to live with her for six months after sister went through an incredibly abusive spousal relationship and acrimonious divorce - violence and stalking etc., the whole nine yards - so that sister could get a job, a place of her own, and back on her feet again. This was in no way a landlord-tenant relationship. I think OP's condo board is trying to allow the residents to have that sort of freedom, while at the same time preventing a whole lot of stranger tenants from constantly moving in/out of the building.)

    *And this is the core of OP's problem. The only reason she wants a roommate is so that she can charge rent, and because this would be in violation of the condo by-laws, she's SOL unless she's willing to be responsible for whatever penalties the board levies upon her for violating the by-laws.
  • 03-05-2017, 04:14 PM
    adjusterjack
    Re: Rental Agreements vs Roommate Agreements
    Quote:

    Quoting eerelations
    View Post


    (There are plenty of possible situations where OP might get a roommate and not charge rent - if she invites her child/parent/sibling/BF to come live with her, for example. I have a friend who invited her sister to live with her for six months after sister went through an incredibly abusive spousal relationship and acrimonious divorce - violence and stalking etc., the whole nine yards - so that sister could get a job, a place of her own, and back on her feet again. This was in no way a landlord-tenant relationship. I think OP's condo board is trying to allow the residents to have that sort of freedom, while at the same time preventing a whole lot of stranger tenants from constantly moving in/out of the building.)

    That's right.

    And would probably extend to a live-in boyfriend/girlfriend/fiance(e) even if that person was sharing in expenses.
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