As a landlord you probably don’t want more occupants in your unit than it can handle for a variety of reasons, including complying with local housing laws, utilities usage, and parking issues. Your city or county’s website is a great place to find more information on housing and landlord/tenant issues, including residential occupancy limits.
Here in Colorado occupancy limits have become a topic of discussion in the Boulder rental market. In some areas like Boulder, with heavy student concentrations or high rental rates, the number of roommates in a rental unit often reaches beyond the legal occupancy limit. The city of Ft. Collins already has a disclosure requirement for occupancy limits that both the tenant and landlord must sign at the beginning of the lease term. Boulder is moving in that direction and going one step further by expecting landlords to list the occupancy limits in the advertisement for their rental. Failure to list disclosure limits may result in fines to the landlord.
If you are or should be aware of a violation of the law you can be fined.
A lease agreement will always list the adult tenants who are signing the lease, but it will also contain language regarding occupants of the residence. This section of the lease will state that the total number of occupants cannot exceed what is allowed by law. It will also specify that occupancy by other persons for more than seven consecutive days and on more than two occasions in any month is prohibited without the landlord’s written consent and shall be considered a breach of the lease agreement. Occupancy limit laws can be tricky for a landlord. If you are or should be aware of a violation of the law you can be fined. Because of this potential liability, make sure to review this section of the lease with your tenants, and never accept a rent payment from someone not on the lease or a co-signer to the lease agreement. Keep records of all rent payments received as further protection.
Short term rentals
Cities like Boulder and Los Angeles, where city councils have addressed the issue of occupancy limits, are also trying to manage the rise in short term rentals generated from websites such as Airbnb and VRBO and the impact these rentals have on the housing market for permanent residents of those cities. When a landlord takes a rental unit off the market for permanent residents to turn it into a short term rental, they decrease the rental housing stock. And without a commensurate addition to the rental housing stock from new builds or new rentals put on the market, rental rates rise, often to untenable levels.
Rising rental rates are tempting, to both landlords and tenants alike. Make sure your tenants realize the limits placed on them for subletting or renting out either a vacant room in their own rental or their own room while they are away. All leases will contain language about subleasing (not without the written consent of the landlord) and some cities require that any room in a property offered for short term rental must be the primary residence of the person offering it for rent.