Lease-by-room, also known as individual leasing, is an arrangement whereby a tenant and their
roommates pay rent for their own rooms instead of each tenant being equally liable for the rent for the whole
apartment
An apartment (American English, Canadian English), flat (British English, Indian English, South African English), tenement (Scots English), or unit (Australian English) is a self-contained housing unit (a type of residential real estate) that ...
. Typically lease-by-room leases are multi-room apartments or townhomes with shared bathrooms and living rooms. What distinguishes lease-by-room leases from joint leases is that tenants take on a lower
financial risk
Financial risk is any of various types of risk associated with financing, including financial transactions that include company loans in risk of default. Often it is understood to include only downside risk, meaning the potential for financi ...
, as they will not have to cover if their roommates do not pay rent and they cannot be
evicted if their roommates fall behind on payments.
Tenant
A benefit for renters is that in lease-by-room agreements, a tenant is not liable for damage to roommates' rooms; they are only liable for public spaces and their own room.
Potential downsides could include not being able to choose your replacement roommate if someone gets evicted and the lease may cost more per month than typical leases.
A study from the
University of Florida
The University of Florida (Florida or UF) is a public university, public land-grant university, land-grant research university in Gainesville, Florida, United States. It is a senior member of the State University System of Florida and a preem ...
found that lease-by-room housing is generally unattractive to students, and in particular, graduate students.
Students generally preferred on-campus housing.
A mixed-retail complex with affordable apartment housing was suggested as a more attractive alternative to off-campus housing.
Landlord
The benefits and downsides for
landlords are largely the reverse of the tenants. Lease-by-room arrangements mean landlords have to sign one lease per roommate
and may have to file separate evictions if multiple roommates do not pay rent. Since tenants need housing and are not always willing to risk the possibility of eviction,
homelessness
Homelessness, also known as houselessness or being unhoused or unsheltered, is the condition of lacking stable, safe, and functional housing. It includes living on the streets, moving between temporary accommodation with family or friends, liv ...
, or significant financial loss if roommates fail to pay a joint lease, landlords are able to charge higher rent for lease-by-room agreements. Even if there is no difference in an apartment that is individually or jointly leased, an individual lease will typically be more expensive due to the risk to the landlord and the need for housing.
See also
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Rooming house
A rooming house, also called a "multi-tenant house", is a "dwelling with multiple Lease-by-room, rooms rented out individually", in which the tenants share kitchen and often bathroom facilities. Rooming houses are often used as housing for low-i ...
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Leasehold estate
A leasehold estate is an ownership of a temporary right to hold land or property in which a lessee or a tenant has rights of real property by some form of title from a lessor or landlord. Although a tenant does hold rights to real property, a le ...
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Tenants union
References
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Landlord–tenant law