What Can I Do If My Roommate Won’t Pay Rent?

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So your roommate did the unthinkable and stopped paying rent. You like the person, really, but just thinking about it turns your stomach, and you’re deeply concerned about what this could do to your finances.

For starters, your landlord could notify a consumer reporting company such as RentBureau, which is owned by the credit bureau Experian, about the missed payments. And if your landlord is really upset, they could skip that step altogether and contact the credit bureaus directly. Either way, this could appear as a negative mark on your credit report. Beyond that, there’s always the chance you’ll need to rent an apartment in the future, and you never know if the landlord there will want to check a version of your credit report before you apply. (You can request your free annual credit report when you visit AnnualCreditReport.com.)

The last thing you want is for your credit to suffer, especially because of someone else’s poor decisions. So what’s a dutiful tenant to do?

When Only Your Name Is on the Lease

How you handle this situation largely depends on the lease and who’s on it, Eric Kahan, an attorney with Sperber, Denenberg, & Kahan in New York, said. If you’re the only one on the lease, “you are sort of that roommate’s landlord,” he said, “[and] you could bring an eviction proceeding against that person to have them removed from the apartment if they’re not paying what they’re supposed to pay.”

In terms of the landlord, they “can only collect from the named lessee, unless the landlord’s agreement permits collection from the subtenant or additional occupant, or [if] there is a law that allows this to happen,” Steve Wagner, a real estate attorney with Wagner Berkow in New York, said in an email.

If you don’t currently have a lease (or never had one to begin with), it’s possible to go to small claims court or housing court to “bring a holdover proceeding, which is a process to get possession of the apartment,” Kahan added. You can do it yourself, but you may want to hire an attorney to help with the paperwork.

If You’re Both on the Lease 

If both parties are on the lease, you’re both liable to the landlord for the lease and the payments, Kahan said. “A lease would typically say that you’re jointly and severally liable,” which means the landlord can collect from either of you and/or keep your security deposits.

You and your roommate may have verbally agreed to split the monthly rent, but that is not binding, so you can’t really bring an eviction proceeding. What you can do, however, is bring a civil procedure to sue for your share of the money. That won’t get the roommate out of the apartment, Kahan said, but it’s a start.

Avoiding Rental Headaches

“Just as good fences make good neighbors, a good roommate agreement makes good roommates and can save friendships,” Wagner said.

To that end, all roommate agreements should address the essentials. This means explaining who has exclusive use of which areas and/or rooms; when rent is due and how much it costs; how utilities like cable and electricity are handled; how issues like guests, drugs, parties, pets and smoking will breach the contract and prompt termination; and who’s responsible for paying the landlord.

Other things to consider, Wagner added, are what happens if one person wants to leave before the lease expires, how the security deposit will be returned and how the apartment should be left upon leaving.

If you’re ready to move, or just fantasizing about your own place, it’s important to know about your credit, and how it can affect your daily life, including your ability to secure an apartment. (You can view two of your credit scores for free, updated each month on Credit.com.)

[Offer: If you’re trying to rent an apartment, and don’t want to go it alone, you can hire firms like Lexington Law to help you manage the credit repair process. Learn more about them here or call them at (844) 346-3296 for a free consultation.]

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7 Mistakes You’ll Inevitably Make in Your First Apartment

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If you’re looking for your first apartment — whether on your own or shared with a roommate — you’re probably eager and excited, daydreaming about the freedom, the parties and even the decorating. While it’s an exciting time, it’s good to be aware of some of the goofs you might make in your first home on your own.

Here are seven common first-time renter mistakes you could make and how to avoid (or correct) them if you do.

1. You’ll Let Your Parents Do All the Talking

“If I’m renting to a younger person, I want to make sure they’re responsible, so they’re not doing themselves any favors by bringing their parents,” said Barry Maher, principal of Barry Maher & Associates, who has owned several rental properties over the years. “If their parents are co-signing the lease, then OK, they have to do that, but I have to see that they are capable of taking care of themselves … and [if] they aren’t depending on Mommy and Daddy, I’m going to feel a lot better about renting to that person.”

2. You’ll Make a Late Payment

If you find yourself in a financial pinch, it’s good to communicate with your landlord. Maher said it’s also better to make a partial payment than no payment at all. Tell your landlord you can’t pay in full, explain the reason why, give them a firm date when the rent will be paid in full and ensure them it won’t happen again. If you do this, there’s a good chance your landlord will work with you and won’t file any negative reports.

“If they’re responsible about it and upfront about it, you do what you can as a landlord to work with them,” Maher said.

In some cases, paying your rent late also can have a negative impact on your credit scores.

Some landlords report rent payment history to the credit bureaus, and the information could wind up on some versions of your credit reports. It’s a good idea to find out if your landlord reports to the major bureaus directly, or if they use one of various third-party services that do it for them.

Some landlords also check specialty renters’ reports compiled by smaller credit bureaus instead of, or along with, your traditional credit reports to see if you have a reported lease history. That means that even if your previous landlord doesn’t report to the major credit bureaus, your payment history could still impact your ability to find another apartment when it comes time to move. (You can see where your credit currently stands by viewing two of your credit scores for free each month on Credit.com.)

3. You’ll Try to Own a ‘Dog-Cat’

A lot of leases restrict the types and sizes of pets you’re allowed to have, and if you think you’ll get away with having a pet without your landlord finding out, you’re probably wrong, and it could end up costing you money and the trust of your landlord.

Worse yet, if you think you’ll get away with lying about what type of pet you have, you’re not going to do yourself any favors.

At one of Maher’s apartment complexes, for instance, the lease allowed for indoor cats but no dogs. But that didn’t stop one tenant from trying to pull a fast one.

“She called me up one day and said, ‘Well, I got a cat, uh … but it’s a little bit different. It’s a cross-breed. It’s a ‘dog-cat,'” Maher said. “This is a 19-year-old young woman who hadn’t taken biology, I guess, so she had this ‘dog-cat,’ and it was such an outrageous lie, that I actually stopped and thought for a moment, ‘Is there such a thing as a ‘dog-cat’? … That didn’t win any trust points for her, and the situation went downhill pretty rapidly from there.”

4. You’ll Overspend on Decorating

It can be easy to get carried away with your credit cards and assume that you’ll be able to pay them off quickly thanks to the money you’re getting from your new job. Sadly, this is how many recent college graduates find themselves trapped in a cycle of debt. Instead, consider seizing this opportunity to begin a lifetime habit of never charging anything you can’t afford to pay. By paying each month’s statement balance in full, you’ll avoid interest charges and problems with credit card debt.

5. You’ll Apply for Credit at the Wrong Time

When you give permission for a landlord to request a copy of your credit report, you’ve initiated a credit inquiry. This type of credit inquiry is considered a hard inquiry, which does affect your credit score.

Because of that, applying for a credit card or two right after you sign your lease might not be the best idea. A typical inquiry can be expected to drop your score by only about 5 points, but that adds up when you’re signing a new lease, opening a new furniture store credit card, applying for a new general-use credit card, taking out a new auto loan, etc. You want to keep your hard inquiries spread out a bit more, or you could risk being denied a line of credit.

That said, there are other types of inquiries into your credit report — such as a credit card company checking your credit before sending you a pre-approved credit card offer — that do not affect your credit score. These types of inquiries are referred to as soft inquiries and include a consumer’s own request for copies of her credit reports.

6. You’ll Cause Damage to the Apartment

If you cause damage to your apartment (and you probably will, so just accept that it will happen), it’s a good idea to let your landlord know as soon as possible or get the damage repaired (correctly – your landlord is going to notice a shoddy patch job if you put a hole in the wall) yourself.

Also, when you move in, be sure you get a checklist from your landlord and do a walk-through of your apartment, noting all existing damages prior to your move-in. Take pictures or video as well to document that these issues existed prior to your arrival. Optimally, you’ll want the landlord to repair these issues, but documenting them when you move in can save you from being charged for them when you move out.

Before you leave, ask the landlord to be present for a final walk-through and get a signed copy of a list of needed repairs, if any. Again, photos and/or video are a good idea here.

7. You’ll Choose the Wrong Roommate

“The roommate situation is really tough,” Maher said. “I’ve had great tenants who had great roommates, but for whatever reason the roommate left and they’ve got to find someone else, and do it pretty quickly. So they get somebody else in there who isn’t so great.”

It’s important to remember that you are responsible for paying the rent in full every month, whether your roommate has his or her share or not, so make sure whoever you choose is financially responsible and can make the rent payments (and utility payments, for that matter) on time.

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