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What is a Room Rental Agreement?
A room rental agreement is a legal contract that defines the rights and expectations of all people that reside in a rental unit, including individuals not listed on the original residential lease between the landlord and master tenant. It is necessary to complete a room rental agreement when more than one person lives in a rental unit but may not be stated on the lease, as in when a master tenant seeks a roommate. This document is considered to be a signed contract and is vital in the event of legal action.
Having additional riders on the lease can be very beneficial for those experiencing rising rent values in a specific area, and in addition to this benefit, roommates also add a social value that can be experienced for a lifetime. In the state of Indiana, those with residential rental properties can add other individuals to the rent to:
- Make paying utilities easier: For those utilities that have a preset cost on a month-to-month basis, it can be very useful to have a roommate. This can make things like cable bills, phone bills, and internet almost negligible. For those utilities that vary, these can also be much cheaper when shared with roommates.
- Make paying rent easier: For those areas of Indiana where the rent values are increasing due to population upsurge, single tenancies can be particularly tricky. For those units that can accommodate more than one person, taking on roommates can be very beneficial since the monthly cost can be split based on the allocated room.
- Make unit maintenance easier: When the cleaning schedule is split amongst the tenants in a unit, it becomes much easier to ensure that the area is well-maintained. In addition, if policies are created to ensure that each roommate picks up after his- or herself, then the management of the property becomes reasonably easy.
- Share furnishings: Furnishing a unit can be expensive, but when split, this is also something that becomes much easier.
Clearly, there are significant benefits associated with renting a room or multiple rooms to other tenants, but even with this in mind, it’s still a good idea to establish a framework for this unique lease type. A roommate agreement is a legally-binding agreement that establishes this framework and also is designed to provide both information and responsibilities for all of the roommates in a particular rental unit.
For example, who makes the utility payments or when is rent due? A roommate agreement can serve to establish key information as well as provide a set of rules for each of the tenants to adhere to during the tenancy. With one of these agreements, it’s even possible to easily add on future roommates to the agreement.
Typically, there is a primary tenant, and it’s usually the person that signed the original lease agreement with the landlord in those situations where someone expands a single-occupancy unit into a multiple-occupancy property. Since this is the person that signed the original tenant agreement for the fixed-term lease, this person is also usually the person responsible for ensuring that all of the requirements of the lease are met. For this reason, it’s a good idea to craft a rental agreement for the roommates that is fairly all-encompassing.
Writing a Room Rental Agreement in Indiana
As mentioned, it’s essential that all of the information that’s needed in order for the room rental agreement to be successful is included. This also ensures that the document becomes legally binding in case the unfortunate circumstance occurs where the court system is required. Also, ensuring that all of these sections are included will also ensure that there’s a framework at play that each roommate can use.
The first thing that needs to be included is the date of the creation of the roommate rental agreement.
When creating the document, it’s a good idea to include multiple blank spaces so that add-on roommates can add their name to the document. Each roommate will need to record his or her first and last name. Sometimes, some roommates may not want to sign the agreement but still live on the premises; if this is the case, then the protections and right provided in the roommate agreement will not apply to them.
Usually, the tenant that signed the original lease will be considered the primary, or principal, tenant. It’s also a good idea to include contact information for each roommate so that they can be reached during emergencies.
Details of the Security Deposit
In Indiana, there is no cap that is imposed by the state when it comes to the cost of the security deposit, so in some cases, in multiple tenant units, the security deposit can exceed the price of rent. In any situation, the state mandates that a landlord is required to return the money tendered for the security deposit within 45 days of the end of the lease.
This is based on state law § 32-31-3-12, and the only situation where a landlord may retain the security deposit is when the deposit is used to repair the damage that has been incurred during the roommates’ tenancy. When the roommate tenancy is ended, the agreement should also establish how the cost will be divided between the roommates.
Rent Due Dates and Payment Amounts
For the sake of outlining roommate responsibilities and recordkeeping, it’s advisable to clearly state the date when rent is due. Also, each roommate’s percentage of the rent and the dollar amount should be noted here as well. In those situations where the landlord requires a single payment, the rental payments can be provided to the primary tenant who will then provide a check to the landlord or management company.
When a unit is split among roommates, sometimes, some tenants have more space than others. If this is the case, then each roommate’s allotment of space should be clearly outlined in the agreement. Also, if this affects the cost of the roommate’s rent, the value of their rent percentage will also need to be demarcated here as well.
Details about how each utility is paid should also be included in the agreement. A section for utilities should determine which utilities are in which roommate’s name. When it’s time to pay the utility bills, each roommate will give the named roommate their share.
When there are allocated parking spaces, the details of each roommate’s parking spot should be included.
Cleaning, Yard Work, Food Prep
As mentioned, one significant benefit to bringing on roommates to a lease is that the upkeep of a rental property is managed by the roommate community. That said, schedules and responsibilities for each roommate should be established in the agreement so that there is a form of structure. This can even entail creating a physical copy of the cleaning schedule. This can extend to the area outside of the apartment so that the outside of the property is properly maintained.
Sometimes, roommates opt to makes the preparation of food communal as well. When this is the case, the agreement can establish food shopping times as well as food preparation duties for each roommate as well as schedules. It can also establish if the roommates will prepare their food separately.
Dealing with Noise and Privacy
When it comes to a comfortable tenancy, it’s important that all of the renters agree on roommate behavior so that peace can be kept. For this reason, ground rules for noise should be established. In many cases, this sets out “quiet times” where roommates may not have loud get-togethers, noisy guests, or furniture moving.
Some properties allow smoking on the premises but have rules for where smokers may legally indulge their habit. All of the rules pertaining to this will need to be established clearly in the room rental agreement.
Vacating the Property
Every lease eventually ends, and there should be a section that clearly outlines the processes of vacating the premises. A process can be established here that will help the roommates easily move out in order to make it easier. Here are some that can be included:
- Final cleaning duties before move-out
- How damaged items will be repaired
- The amount of warming a roommate will need to provide before opting to move out
Finally, any and all roommates that will be agreeing to the terms of the agreement will need to sign their name, print their name, and date the document. When writing the document, it’s also a good idea to include extra blank spaces for roommates that may be added on to the lease.
Indiana-Specific Considerations for Room Rental Agreements
When renting any property in Indiana, there are some state- and federally-mandated disclosures that must be included. These will be present in the original lease and should also be included in the roommate agreement:
Of all of the mandated disclosures in the state of Indiana, the lead-based paint disclosure is the only one required by federal law. Lead paint is hazardous for both children and pregnant women, and if the building predates 1978, then the landlord must disclose the presence of this type of paint. Additionally, once the disclosure is displayed, all tenants must initial and sign the agreement indicating that they have been alerted to the presence of this material.
Privacy is important and based on Indiana state law § 32-31-5-6, the landlord must provide either written or oral notice when looking to enter the unit unless it is an emergency.
Managers and Agents
Also to protect the privacy of the tenants, Indiana state law § 32-31-3-18 establishes that any landlord, the landlord’s management representative(s), or employees must have their name disclosed if they are to in any way enter the premises.