House agreement I read gives current residents a veto on new roommates. Would you sign that as the owner?

Question

I've been reading operator house agreements to work out where a service business could sit in this model, and two of them handle new tenant selection in completely opposite ways.

The first reserves the decision entirely to the operator. Applicants are screened against written criteria, existing residents are told who is moving in and when, and that's it. One line says residents have no approval right over other occupants.

The second gives existing residents a 48 hour meet and comment window, and then, if a majority object in writing, the applicant is declined. The operator keeps the right to override if the house is more than 30 days vacant.

Both of these are running houses that fill. The arguments seem real on each side.

For resident input: the product you're selling on a room rental is partly the other people in the house. If a house self selects, conflict drops, and conflict is what drives the turnover that kills the income density advantage. Residents who chose their housemates complain less to you, and someone who feels ownership of the house treats the kitchen differently.

Against it: every day of comment window is a day of vacancy, and a good applicant with three other options doesn't wait 48 hours for strangers to vote. You've also handed selection authority to people who are not bound by your screening criteria and who may object for reasons you would never write down. That last part is the one that worries me most from a liability angle, and I don't think it's a small worry.

There's a middle where residents meet the applicant and give you input but you decide. That may just be the veto with extra steps if you always follow the input.

What do you actually run?

megan_doyle15 · Answer

Why would you ever let tenants pick tenants? They're not paying for the vacancy. Seems like they'd say no to everyone slightly annoying and you'd eat the empty room.

Rena Guide · Answer

Worth defining two terms in this thread before the vote, since they drive the whole question.

Written screening criteria means a fixed, documented standard you apply to every applicant the same way. Income multiple, credit threshold, rental history, background check standard, whatever you choose. The point of writing them down in advance is that you can show every applicant was measured against the same yardstick.

Fair housing law prohibits refusing to rent based on protected characteristics. Federal protected classes exist, and many states and cities add more, so the list that applies to you depends on where the property is. That is why the concern @beacon raises about resident objections is real. Existing residents are not trained on your criteria, they are usually not documented, and a reason like "we didn't get a good feeling" cannot be shown to be based on anything permissible. If a declined applicant later asks why, the answer has to point back to your criteria.

That does not mean resident input is off the table. Operators commonly structure it so residents provide observations, the operator makes the decision, and the decision is recorded against the written criteria. What matters is where the authority sits and what the file shows.

How fair housing law applies to shared-housing arrangements, including any narrow exemptions, varies by jurisdiction and by the facts of the property. That is a question for a fair housing attorney licensed in your state before you write the clause, not after someone objects.

chriswalton8 · Answer

The thing I'd want to see if I were looking at a passive slot in one of these is days to fill, split by house. A veto clause shows up there or it doesn't. If house A with the veto averages 21 days and house B without it averages 9, the operator is paying about 12 days of room rent per turn for lower conflict, and at 2.5 turns a year across four rooms that is a number you can actually put on the page next to the turnover savings.

Nobody reports it that way, which is its own answer about how carefully these clauses get chosen.

samantha_ruiz · Answer

I run the middle version and it isn't the veto with extra steps, because I've gone against the house twice.

How it works: applicant clears my written criteria first, then does a 20 minute walkthrough with whoever is home, then I decide. Residents send me a note after. Most of the time the note is "fine" and I move on.

The first time I overrode, the objection was that the guy worked nights and they thought he'd be in the kitchen at 3am. He was in eleven months, no issue. Second time the objection was vaguer than that and I moved forward and it was also fine.

What it costs me is about 4 to 6 days per fill, because I'm scheduling a walkthrough around three people's work hours. @sable at my rents that's around $130 a fill. I've decided it's worth it because the two houses where I did no introductions at all are the two where I got the most "can you talk to him about the dishes" messages, and those messages are my actual labor cost in this business.

One thing I'd add to what @rena-guide wrote. I keep the residents' input as observations in the file and my decision line references my criteria, and I had a local attorney write the clause. I would not draft that paragraph myself.

House agreement I read gives current residents a veto on new roommates. Would you sign that as the owner?

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