Rental Property Management: Handling Unauthorized Tenants

Oct 17, 2023 | By ES Property Management
Stressed, tired and frustrated business man with headache at night from burnout

Managing a rental property goes beyond ensuring the property is in good shape and collecting rent on time. It involves a complex process of navigating through legal obligations and dealing with unexpected challenges — one of which could be unauthorized tenants. Unwanted tenants can pose significant problems, from potential property damage to liability issues.

In this blog, our experts here at ES Property Management aim to provide landlords with a guide on how to effectively handle unwanted tenants. We will offer practical tools and strategies to prevent unauthorized occupancy and maintain compliance with rental regulations, ensuring a smooth and profitable rental property management experience.

What Is an Unauthorized Tenant?

Every individual residing in a rental property must be accounted for in the lease agreement. This legal document serves as the foundation of the landlord-tenant relationship and outlines the obligations and rights of each party. It stipulates the names of the authorized occupants, terms of occupancy, rent amount, and other specific rules pertaining to the property.

When residents not listed on the lease agreement move into the property, they are considered 'unauthorized tenants.' An unauthorized tenant refers to any individual occupying a rental property who is not included in the initial lease agreement. 

They can emerge in various forms, ranging from a tenant's friend or family member who has moved in without the landlord's consent, to a boyfriend or girlfriend who has gradually spent more time at the property until they're practically living there.

A long-term guest can evolve into an unauthorized tenant, if their stay exceeds the period stipulated in the lease. It's important to remember that any person residing in the property who hasn't been screened and approved by the landlord or property manager is considered an unauthorized tenant, constituting a violation of the lease terms. 

This can lead to a variety of complications, including increased wear and tear, potential for property damage, and liability issues. Therefore, landlords must take every measure to ensure all occupants are duly authorized and included in the lease agreement.

Unauthorized Tenants: A Common Issue

Unauthorized tenants can pose significant challenges for landlords. It is not uncommon to discover that more tenants are occupying a property than are listed on the lease agreement. 

Understanding the signs of unauthorized tenants and the potential consequences is essential for landlords to take appropriate action.

What Are the Signs of Unauthorized Tenants?

Several red flags may indicate the presence of unauthorized tenants in a rental property. These signs include:

  1. Excessive occupancy: An unusually high number of people seen entering or leaving the property regularly.

  2. Additional vehicles: More cars are parked around the property than expected based on the lease agreement.

  3. Excessive noise and activity: Frequent disturbances and increased activity during odd hours.

  4. Utility usage: A significant increase in utility usage that exceeds the expected consumption for the number of listed occupants.

Being vigilant and observant can help landlords identify these signs and prompt further investigation. Regular inspections can aid in detecting unauthorized tenants.

Potential Consequences of Unauthorized Tenants

Allowing unauthorized tenants to occupy a rental property can have various repercussions for landlords. These consequences include:

  • Breach of lease agreement: Unauthorized tenants violate the terms of the lease agreement, potentially leading to legal complications.

  • Increased wear and tear: More occupants can result in increased wear and tear on the property, potentially leading to higher maintenance and repair costs.

  • Safety concerns: Unauthorized tenants may not undergo the same screening process as authorized tenants, raising potential safety and security concerns.

  • Insurance complications: An extra tenant's actions or damages may not be covered by the landlord's insurance policy, leading to financial loss.

By promptly addressing unauthorized tenants, landlords can mitigate these potential consequences and protect their investment properties. 

Someone pointing to a space on a contract and another person signing, property management Indianapolis conceptHow Can Property Owners Deal With Unauthorized Tenants?

Discovering unauthorized tenants in your rental property can be a concerning situation. As a landlord, it's important to take prompt action to address this issue. 

Here are four essential steps you should take.

1. Review the Lease Agreement

Start by thoroughly reviewing the lease agreement that you have in place with your tenants. Look for specific clauses that pertain to occupancy and subletting. Check if there are any restrictions on additional occupants and whether prior written consent is required.

By familiarizing yourself with the terms outlined in the lease agreement, you can determine if the presence of unauthorized tenants is a violation. This will help you in deciding the appropriate course of action to take.

2. Communicate with the Tenants

Once you have reviewed the lease agreement, it's essential to communicate with your tenants. Reach out to them to discuss the situation and gather more information. Approach the conversation in a professional and non-confrontational manner.

Express your concerns regarding the presence of extra tenants and request an explanation from your tenants. It's important to allow them to provide their side of the story. Document the conversation and any information provided by the tenants for future reference.

During the conversation, make it clear that unsanctioned tenants are not allowed as per the terms of the lease agreement. If necessary, remind them of the potential consequences of violating the agreement, such as termination of the lease.

If you're unsure about the legal aspects or need guidance on the best course of action, it's recommended to consult with legal professionals who specialize in rental property management. They can provide you with expert advice tailored to your specific situation.

3. Gather Evidence

Before taking any action, it's crucial to gather evidence to support your claim of unauthorized tenancy. Document any signs or indications that suggest additional occupants living in the rental property without your knowledge or permission. 

This may include:

  • Observations: Make note of any unusual activity, such as increased traffic to and from the property, excess noise, or unfamiliar individuals seen entering or leaving the premises.

  • Neighbor Reports: Reach out to neighbors and inquire if they have noticed any unapproved tenants or activities in the rental property.

  • Utility Usage: Review utility bills to identify any spikes in usage that could indicate the presence of additional occupants.

  • Communication Records: Check communication records, such as emails or messages, for any discussions or indications of extra tenants.

By gathering concrete evidence, you can strengthen your case and provide support for any necessary legal actions.

4. Consult with Legal Professionals

Once you have gathered sufficient evidence, it is advisable to consult with legal professionals experienced in rental property management. They can help guide you on the specific steps to take based on local laws and regulations. 

During the consultation, be prepared to provide the evidence you have gathered. This will allow the legal professional to assess the situation accurately and provide appropriate advice. 

They may recommend sending a formal notice to the tenants, conducting an inspection, or initiating eviction proceedings, depending on the severity of the unsanctioned tenancy.

What Preventative Measures Should You Take to Protect Your Property?

To maintain a smooth and compliant rental property management experience, implementing preventative measures is crucial. By taking proactive steps, such as thorough tenant screening and regular inspections, landlords can mitigate potential issues and protect their investment property.

Thorough Tenant Screening

One of the most effective ways to prevent unauthorized tenants is through thorough tenant screening. This process involves conducting background checks, verifying employment and income, and checking references. 

By thoroughly vetting potential tenants, landlords can gain valuable insights into their rental history, financial stability, and potential red flags.

Components of thorough tenant screening:

  • Background checks

  • Employment and Income Verification

  • Rental History Verification

  • Reference checks

Thorough tenant screening helps landlords identify individuals who are more likely to comply with the lease agreement and adhere to the occupancy limits. It also reduces the risk of unsanctioned subletting or occupants who may cause disturbances or damage to the property.

Regular Inspections

Regular inspections are an integral part of rental property management and play a crucial role in maintaining compliance and identifying extra tenants. 

By conducting inspections at appropriate intervals, landlords can ensure that the property is being occupied by the individuals listed on the lease agreement.

Some of the benefits of regular inspections include:

  • Ensuring Compliance with the Lease Agreement 

  • Identifying Unauthorized Tenants

  • Monitoring Property Condition

  • Addressing Maintenance Issues Promptly

During inspections, landlords should pay close attention to any signs of unauthorized tenants, such as additional personal belongings, unfamiliar faces, or excessive wear and tear. 

By promptly addressing any discrepancies or unsanctioned occupants, landlords can take appropriate action to maintain compliance and protect their investment.

A property manager on the phone smiling, rental property management conceptProtecting Your Investment

As a landlord, it's essential to take proactive measures to protect your investment property. This includes being prepared to navigate the eviction process and documenting incidents for legal purposes.

Eviction Process

In unfortunate situations where unauthorized tenants refuse to vacate the property, eviction may be necessary. The eviction process involves following legal procedures to regain possession of your property. 

While specific eviction laws may vary by location, the general process typically involves the following steps:

  1. Review Local Laws: Familiarize yourself with the eviction laws and regulations applicable to your area. This will ensure that you follow the proper legal procedures throughout the eviction process.

  2. Serve Notice: Provide the extra tenants with an eviction notice, specifying the reason for eviction and the date by which they must vacate the property. The notice period will vary depending on local laws.

  3. File an Eviction Lawsuit: If the unapproved tenants fail to comply with the eviction notice, you may need to file an eviction lawsuit, also known as an unlawful detainer action, with the local court. This legal action initiates the formal eviction process.

  4. Attend the Court Hearing: Attend the scheduled court hearing to present your case before a judge. If the judge rules in your favor, they will issue a judgment for possession of the property.

  5. Enforce the Judgment: If the extra tenants still refuse to vacate the property after the court judgment, you may need to involve law enforcement or a sheriff to enforce the eviction order and remove the tenants.

Evictions should be considered a last resort for landlords dealing with unauthorized tenants. This process can be complex, costly, and time-consuming, but it is sometimes the only viable option to protect your investment property. 

The Best Property Management Indianapolis Offers Deals With Extra Tenants

Unauthorized tenants can pose significant challenges for landlords, potentially leading to financial loss and violation of rental agreements. 

However, by taking prompt and decisive action, you can address this issue effectively. Reviewing the lease agreement, communicating with tenants, gathering concrete evidence, and consulting with legal professionals are all critical steps in dealing with unapproved tenants.

ES Property Management is committed to providing comprehensive property management solutions that address the challenges landlords face, including the issue of unsanctioned tenants. Our team of experienced professionals is well-versed in the intricacies of rental property management and can assist in areas such as tenant screening, regular inspections, and legal consultations.

Whether you need guidance on local laws, help with eviction proceedings, or advice on maintaining documentation, we're here to assist. If you’re ready to see how we can assist you, download our Protecting Your Investment Property Guide and learn how to protect your investment property!

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