Things to Consider when Renting a House with Friends
Renting a house can be expensive, so it’s common when starting out, to share the expenses and rent a home with friends. Finance can be a very touchy subject and as such it would be a good idea to approach it with your friends sooner rather than later and have a clear understanding of the financial responsibilities of each person. This is something that should also be front of mind when it comes to deciding who pays the bond and how much each person pays toward the bond. In some cases, you may take out a personal loan to cover the bond or you may loan bond money to your flat mates.
Following are some things to consider when renting a house with friends:
Know Your Rights
If you rent a house or flat with your friends, your rights will depend on:
- What Kind of Tenancy You Have: You will probably be either a fixed term tenant or a periodic tenant.
- Whose Name is on the Tenancy Agreement: This determines whether you and your friends have separate tenancies or a joint tenancy. If only one person’s name is on the tenancy agreement, then they will be a sole tenant.
Know Who Will Pay for What
One of the most contentious part of living with friends is determining who pays for what in bills, rent, and groceries. It is very important to establish these payments as soon as possible so that one person does not get completely resentful or burdened.
The Rent and the Rental Bond
Usually you and your friend will split these costs down the middle. But if there are three or more of you or you have the master bedroom, then it may not be as simple as a 50/50 split. Once you have determined how much everyone will pay, it’s time to figure out how you will pay. Is the landlord expecting one automatic payment, or are multiple payments acceptable? If its’ a single payment, then decide who will pay the landlord. When a group of people are living together, they may split the cost of the bond. You may contribute the bond up front and bond loan the bond amount to your friends to be paid over time. This should be made note of so you all know where you stand.
When it comes to utility bills, either decide that they will all be in one person’s name and then split the costs or have each of your friends responsible for a different utility.
When it comes to groceries, it would be a good idea to set some ground rules. Will everyone buy their snacks separately or will the food be shared? The earlier you establish the routines for these things, the happier the home.
If Possible, Never Be the Sole Account Holder
Keep in mind that the rental is your legal responsibility if your name is the only name on the lease. If your friends leave without paying their share, you can end up holding the full rental amount. That’s why you should plan ahead. It is recommended that you split up the tasks of setting up the accounts when you move in. As long as you and your friends are clear on who owes what, there will be less risk of people getting upset.
Consider Joint Tenancy Agreement
There are certain benefits of joint tenancy agreement. If you have it, then all the tenants have the same responsibilities and rights. You and your friends are all equally responsible for keeping to the terms of your tenancy agreement and paying the rent. On the other hand, if you are the only person whose name is on the tenancy agreement, then you will be held responsible for paying the bills, the rent, and making sure that the property is kept in good order. This is a huge responsibility. That’s why it is recommended that you don’t take it on and consider joint tenancy agreement instead.
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