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In a standard landlord and tenant situation, a lease agreement would be used to outline the terms expected on both ends where a rental property is concerned. What happens when more than one person is renting a property independently?

This would require the co-tenants to have what is known as a room rental agreement. Imagine a situation in which there is a principal tenant (person who initially rented the property) and then secondary tenants come into the equation.

In this case, they wouldn't be included in the lease, which gives rise to the need for another kind of agreement.

Room Rental Agreements

Put simply, a room rental agreement is a legal document that clearly outlines what is expected of each co-tenant when there is a shared living situation at play.

There are different circumstances under which a rental unit may become a shared space. For example, the original tenant may find that the cost of the Illinois rental property has become less affordable than it may have been previously.

Therefore, the decision may be taken to extend the master lease in a sense by renting out a room to someone else. This would alleviate the pressure that would've been associated with the costs.

Of course, the principal tenant would not necessarily need to add the new person to the original lease so long as the state requirement of having a room rental agreement established is met. However, the new tenant(s) must fill out the legally binding document in its entirety before moving in is allowed.

Naturally, it can't be stated enough how important it is to cover all bases with these agreements. Having someone to help pay rent and split utilities is great, but these collaborative relationships can become less so, and the master tenant may need security.

When You Need One

A room rental agreement would be recommended in any situation that sees a principal tenant or owner wishing to lease a room or subsection of an Illinois rental unit to a secondary tenant.

These situations can create potential issues and the contractual agreement means that there is an established way to handle grievances, primarily since there would be defined communication channels. Here are a couple of the instances in which room rental agreements may be helpful and applicable:

  • The party being rented to has a significant other who stays over almost consistently
  • There's a desire to effectively separate costs and expenses
  • A roommate consistently has guests staying over on the property
  • There's a need to properly establish the lines of property maintenance duties
  • Quiet hours need to be established.

Bear in mind that while some elements, such as financial responsibilities, are legally enforceable in court, others are not. A judge will not help you get your subtenant to mop the floor when it's their turn.

Not Having One

Without a proper room rental agreement, some risks are left unaccounted for, some of which can be very severe. For example, financial obligations may not be adequately covered, which can lead to unnecessarily long lawsuits. Consider the following potential issues:

  • One party may end up having to pay more rent than the other, forfeit a security deposit, or even be stuck paying for property damages because another moved out early
  • There may be a situation in which personal property is borrowed and never returned. Things get even worse if there is community property damage and one person ends up having to pay for it.
  • Sometimes, a negative fallout from a good relationship gone sour emerges out of ambiguity and misunderstanding. Having a room rental agreement in place can eliminate the lack of clarity. It's no different from the way a standard lease agreement would indicate security deposits, maximum overdue rent periods, etc.
  • A lot of time can be wasted on situations that could be easily addressed if the right clauses are included in an agreement. For example, if there are set boundaries on noise levels past a certain time, then there may be less of a need to have to try to navigate blindly through a situation when it occurs.

Roommate Agreement

Some people use these terms interchangeably, but there are subtle differences. A room rental agreement is effectively a sublease. It typically requires a landlord's approval, incorporates elements of the original lease agreement, and is used when a tenant wants to sublet the property.

A roommate agreement is used when someone is moving in with a new roommate, doesn't necessarily require the permission of Illinois landlords, and is independent of the original lease.

What to Include

As indicated before, like a standard lease agreement, it's imperative to ensure that a room rental agreement includes all the necessary pieces, as doing so helps to avoid certain levels of conflict or confusion later.

While there is no one size fits all template, the elements below are recommended as a good base to start with.

Involved Parties

Here, you want to ensure that there is sufficient information to identify and contact all co-tenants who form the agreement. Of course, the principal tenant is the one on the initial lease agreement.

Dates

The dates that the agreement will begin and end should be included here.

Security Deposit Details

Security deposit details tend to be pretty standard. While the co-tenant is technically not a part of the initial lease, the decision may be taken between the parties on the agreement to split the deposit, which will make the burden of paying a bit lighter on each person.

If this is the case, the room rental agreement must speak to it. You want to make sure it's clear how each renter will pay and how the deposit is divided amongst those involved. It's also a good idea to speak to forfeiture of the deposit should there be any property damage.

Allocation of Space

Considering that the property is being split among multiple people, it's a good idea to establish which spaces are allocated to whom and which ones are shared.

Rental Unit Payments

The rules of the original lease agreement will always hold, which means those that speak to how, how much, and when a tenant is expected to pay rent. The last thing that the original tenant wants is to create any issues with the lessor because of a roommate.

Many Illinois landlords will require that a single payment is made encompassing everything. In that case, the principal tenant can collate payments from everyone else to make the final payment on time.

Privacy

Comfort is a very big part of any rental experience and privacy feeds into it greatly. Therefore, it's a great idea to establish rules where privacy is concerned. For example, a quiet period can be set, which is expected to be honored by all roommates.

This can be supplemented by "do not disturb" timelines and limitations on when guests can be at the property.

Concessions

This may be an absent element considering the scope of power that an original tenant will have. Typically, you find landlords offering concessions to their tenants to incentivize them to rent the property. Rent concessions, for example, are very popular.

Similarly, any concession granted to the new co-tenant(s) must be clearly outlined.

Signatures

Provided that all parties involved agree to the terms outlined, they must provide their signatures to indicate so. These must be accompanied by the date and legible printing of the associated names. With all this, the document will become legally binding.

Potential Challenges

Once you're going to live with someone in a shared and enclosed space, there's always the potential for things to go awry. It's incredibly convenient for those who want to split costs to do so, but you cannot lose sight of the issues that may come with going this route.

Here are some of the common problems that you may find yourself facing:

  • A disregard for your privacy
  • A lack of appropriate methods to handle areas of disagreement peacefully
  • Dealing with guest behaviors that are less than acceptable
  • A disregard for the upkeep of the living space.
  • Property damage

It's a good idea to take some time to think about the kind of challenges that may come up, even if some are specific to the person you'll be staying with.

Build Your Own

While you may have gotten a lot of useful information here, you may still find it a little difficult to draft your own agreement with a co-tenant on an Illinois rental unit. If that's the case, all hope isn't lost!

DoorLoop provides you with three convenient options that cover those who want a prebuilt or customizable template for their room rental agreements. Check out the options below:

eSignature

If you need to sign a room rental or roommate agreement with a new tenant, you want to make the process as easy and efficient as possible.

With DoorLoop, you can get your agreements and templates eSigned in a few seconds. You can also get to the eSignature step much faster by creating reusable templates that are autofilled with tenants' information.

DoorLoop also makes it so simple to find the best tenants in the first place by syndicating your listings on popular websites Zillow, Trulia, Hotpads, Apartments.com, and more. You can also make sure you're bringing in the best tenants by screening your prospects in seconds through DoorLoop.

For more information about DoorLoop, learn more or schedule a free demo.

The Bottom Line

Whether it's handling security deposit concerns, protecting privacy, or establishing payment and maintenance responsibilities, a room rental agreement will help tremendously in Illinois. If nothing else, it, alongside the lease agreement, will provide guidelines to remain in accordance with state and federal law.

Bear the insights provided above in mind, and take advantage of the convenient forms that DoorLoop offers to ensure that you leave no stone unturned!

FAQs

Can a Landlord Legally Access the Property Anytime?

There will usually be a clause in the initial lease agreement that covers landlord access to the property. Typically, landlords will give notice as stipulated in the document unless there is an emergency.

Can There Be Multiple Prospective Tenants Covered By a Room Rental Agreement?

Yes! A room rental agreement is not limited to two people. Depending on the situation and size of the space, there may be multiple co-tenants.

Can Rent Concessions Be Verbal?

No. Like a security deposit requirement, any concession granted must be formally disclosed as it is a legally binding element of the agreement.

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David Bitton

David is the co-founder & CMO of DoorLoop, a best-selling author, legal CLE speaker, and real estate investor. When he's not hanging with his three children, he's writing articles here!