My name is Andy Ritan and I am the owner and broker of Atlanta Property Management Group, a residential property management company in Atlanta, Georgia.
This video is about a form we use frequently and it saves us a lot of trouble: Our Roommate Change/Add Amendment which is available to download for free from our website, atlantapropertymanagement.com, at the DIY landlording page.
Here is a very common scenario in residential property management: You have more than tenant named on a lease. The lease renews for a new year. One or more tenants desire to stay in the property for another year, while one or more tenants desire to move out. There are several ways to get this done. One way is to terminate the current lease, disburse the security deposit to the parties, draft an entirely new lease naming the new tenants, and collect a new security deposit from them.
Wow! What a lot of work! Here is a better way: Amend the lease to extend the expiration date by one year and then execute our roommate change/add amendment.
The beauty of our "roommate change/add amendment" is that it includes the following language: "The tenants have agreed to handle and settle the transfer of monies for reimbursement of any security deposit between themselves and release Landlord from any and all claims or liability for refund of security deposits to any Roommate who is being released from the Lease and moving out of the Premises.
Released roommate agrees to look solely to remaining roommates for reimbursement of any amount he or she claims to have paid toward security deposits." There are several benefits to using this amendment: First, it saves you a lot of work because you don't have to terminate the old lease and draft and execute an entirely new lease. Also you don't have to pay out and then re-collect a security deposit. Lastly, the amendment spares you from having to wade into any dispute among the tenants as to who paid in the security deposit and who should get some portion of it back. The tenants agree to settle all that among themselves and leave you out of it. This is a fantastic problem to leave to the tenants and not have to get involved in. I've been using this form a long time and have never had any disgruntled tenant who has signed the amendment come back to me wanting to collect security deposit funds from me rather than from his or her former roommates.
The last thing regarding roommate change/add situations is a "best practice" you should not neglect. Let's say you were a property management rock star and did a very thorough job at screening your tenants before they signed the original lease. What if the tenant who is leaving the lease had a big enough income to carry the lease all by himself but the remaining roommates, the ones who must carry the rent after the big earner leaves, don't earn enough money to pay the rent? Is this something you should worry about?
Absolutely! The solution is to require the remaining and/or new roommates to re-apply for the property and allow you to verify that they can indeed carry the rent without the help of the departing roommate. If you neglect to re-screen the remaining and/or new roommates, and the new crew of tenants cannot afford pay the rent, you'll have only yourself to blame for this avoidable problem. I am not an attorney and do not provide legal advice. The materials available at this web site are for informational purposes only.
You should contact your attorney to obtain advice with respect to any particular issue or problem. Good luck out there! If you'd like help managing your rental property please find us at atlantapropertymanagement.com.