As always, please review my disclaimer before reading this blog post. It can be found by following the link at the top of this page or by clicking on this link. As always, any legal principles discussed involve only the laws of the Commonwealth of Virginia.
Introduction
Fresh out of college and ready to face the real world, many of us face that most basic of questions - where are we going to sleep at night? With a mountain of student loan debt, practically no job security, and probably about $0 to your name, buying a home probably is not your immediate plan, so renting seems the way to go. In today's market, however, especially in higher demand areas, renting on your own just may not be feasible either, so now you need a roommate.
What you may not realize, however, is that having a roommate may not be as simple as it seems. For example, if both of you sign the lease, that does NOT mean that you are each legally responsible for half the rent. In fact, unless the lease says otherwise, if your roommate skips town you could suddenly become responsible for the whole rent, and continuing to pay only half the rent could result in your eviction, a judgment against you, and a nasty notation on your credit report that follows you for years and makes finding your next rental apartment next to impossible.
There are two ways to potentially protect yourself from this problem, however. First is to insist that the lease you sign with your landlord delineate which roommate is responsible for what - including a breakdown of who owes how much rent. This is usually not practical, however, as it shifts the burden of resolving conflicts between you and your roommate to your landlord. As we are largely in a landlord's rental market today, finding a single renter would just be easier, so most landlords will be unwilling to do this. Second, then, is to require your roommate to sign a Roommate Agreement, which creates a contractual relationship between the two of you and provides at least some protection in the event of a dispute between you.
In this blog post, I hope to provide some basic advice regarding Roommate Agreements, why you need them, and what should be in them.
Why a Roommate Agreement?
Imagine, if you will, that you and your best friend decide to live together. You both agree to split the rent, and you both sign a lease and move into your new apartment. Suddenly, your best friend loses her job, and can't afford to pay her share of the rent anymore. You continue paying your half, hoping that she and the landlord can work something out - after all, she is your friend. Then, suddenly, you get served with court papers seeking to evict both of you. You go to court, argue that you were only supposed to pay half the rent, so nothing should happen to you, and yet judgment is entered against you both for your roommate's unpaid rent, and you are both evicted. Then, a month later, you get notice from the court that, as your landlord knows your friend is unemployed, your wages are being garnished to pay the judgment.
As shocking as it may seem, this happens every day, and when you sign a lease with a roommate, this is exactly what you open yourself up to. Moreover, if you do not have a roommate agreement, you may have no right to recover any of that money from your roommate. You can file a suit against your roommate seeking contribution, but without a set contract a court may very well only give you a partial judgment or no judgment at all. A roommate agreement can help protect you by requiring your roommate to reimburse you for any damages you suffer as a result of her non-payment of her share of the rent.
What Should Be In a Roommate Agreement?
So, now that you understand why a roommate agreement might be necessary, you might be wondering what it should contain. Remember, first and foremost, a signed roommate agreement is a legally binding contract like any other, so do not sign one that contains provisions you are uncomfortable with - chances are they will be enforced if necessary.
The first provision every roommate agreement should have is a payment clause. This clause should break down who is responsible for what share of the rent, utilities, late fees, and any other costs associated with your living arrangement. This clause should also detail deadlines to pay your share, and to whom you pay. Will one of you be responsible for paying the whole amount to the landlord while the other pays that person back for her share, or will you both pay the landlord directly? Think about what works easiest for you. If one of you is much more reliably prompt than the other, that may be the best arrangement, but if you don't like the idea of harassing your friend for money, each of you sending rent straight to the landlord may be better.
The second provision every roommate agreement should have is an indemnity clause. In an indemnity clause, each of you will promise to be responsible to the other for any damage they suffer as a result of your actions. This goes beyond mere payment. If your roommate violates the lease in another manner that causes you both to be evicted, you could then go after your roommate for your costs in finding a new place, the difference in rent you are paying, lost wages if you had to miss work, etc. This is an additional layer of protection if your roommate's actions cause problems for you.
Depending on your situation, it may not be necessary to have provisions beyond those two, but provisions regarding chores, household responsibilities, and other relevant matters are certainly allowed as well. Just beware that remedies for breaches of those provisions (for example, if your roommate doesn't do the dishes when she's supposed to under the agreement) might be minimal, and not worth the cost of pursuing.
Dangers of Roommate Situations
Even a Roommate Agreement cannot protect you from all possibilities. The scenario outlined in the "Why a Roommate Agreement" situation above could still happen if you have a roommate agreement. Then, when you pursue your (presumably now former) roommate for her share, she could declare bankruptcy, flee to a location such that you cannot find her, or simply remain a judgment debtor from whom judgment is basically uncollectable (because she makes too little money, for example). As a result, you would still get stuck with the bill, even with a very well written roommate agreement.
Because of this risk, you should assess carefully who you are considering rooming with. How well do you know this person and his or her payment history? How reliable are they? In the end, a roommate situation will always entail some risk, no matter how well you prepare.
Conclusion
Renting with a roommate is a risky proposition, but in this day and age, it is often necessary. A roommate agreement can protect you from many of the dangers associated with this situation, however. If you would like to put together a roommate agreement, review one that has been proposed to you, or are otherwise in a dispute with a current or former roommate, please feel free to call (703)281-0134 or e-mail SLeven@thebaldwinlawfirm.com to set up an appointment with me. Your initial consultation is free for up to half an hour!
No comments:
Post a Comment