Are you considering renting to roommates (also called househacking)?
There was a massive housing shortage when I first moved to Fort McMurray. The oil and gas companies offered their employees Living Out Allowances (LOAs) to offset the high rental expenses. Employees made excellent wages topped up with LOAs in the thousands of dollars. It was a once-in-a-lifetime golden opportunity for homeowners with any space to rent. Virtually everyone I knew had roommates. Initially, I wasn’t too keen about sharing my personal space, but the idea of roommates paying my mortgage was too good to resist.
Although househacking was a great way to offset mortgage and utility payments and have help with household duties (my first tenant was a tremendous support), it also came with a downside, mainly loss of privacy and the tension that comes from disagreements.
Is room rental legislated by the Residential Tenancies Act?
Renting out a room/s in your primary residence does not fall under the Residential Tenancies Act (RTA); it falls under the Alberta Innkeepers Act which offers some distinct advantages.
The most significant benefit is if your roommate is not paying rent or is creating a disturbance, you can kick them out. There are no requirements for a 24-hour or 14-day eviction and no setting of a court date with the Residential Tenancy Dispute Resolution Service (RTDRS). You can tell them to leave, and if they don’t, the police will escort them out.
I once had a roommate who decided he shouldn’t have to pay rent after the first month. I gave him till 8:00 p.m. the night of the 2nd to pay up but he refused. That night he had to find another place to stay. It was beautifully simple. Luckily, he was my only lousy roommate; I had others who happily lived with me for years.
FAQs
Should I have a written rental agreement?
Yes! A written agreement documents the terms. You can return to the written agreement as proof if there are disagreements. Not that putting things in writing ever stopped roommates from believing they had the right to create their own terms.
Should I screen my roommates?
Yes! Definitely screen your roommates. Have roommates complete an application, check employment and landlord references, and run a credit check. Complete a move-in/move-out inspection report and maintenance inspections after they’ve moved in. If you are in the vulnerable section, have children, or seniors in your home, you can ask for a criminal record check. You need to know who lives in your house, sleeps across the hallway from you, and shares your kitchen and bathroom. Your property insurance provider should also be informed of how many unrelated residents live in your household, as it could affect your insurance coverage.
What kind of rental agreement can I use?
Start with a standard lease (they can be purchased from ARLA) and add the following points and/or any other specifications unique to your accommodation.
- What parts of the house can your roommate use and what parts of the house are off-limits?
- What is your policy on overnight guests?
- Are you and your roommate sharing groceries, telephone, internet, and computer?
- Who does cleaning, yard work, and snow shoveling?
- Do you allow smoking in the house or outside of the property? If so, where?
- Are your roommates permitted to use the yard, laundry or garage?
- Names of you and your roommate/s
- Address of your home
- Amount of rent
- When tenancy begins and ends
- When rent is due, to whom it’s paid, and how it’s paid
- The amount of the security deposit
- Additional fees (pets, late fees, or key deposits)
- Whether utilities are included or are extra, if so, how much and how are you to be paid?
- Notice periods for ending the roommate agreement
- Is your room furnished or unfurnished. If furnished, what is included(i.e. bed, nightstand, dresser, lighting, etc.)?
- Is storage included? If not, cost?
The rental agreement, like a lease, contains every term you and your roommate agreed to and should only include what you have discussed or agreed to.
What if I move out?
The Alberta Innkeepers Act only applies if you live on the premises. If you move out, room rentals fall under the RTA.
Where can I find resources?
Where can I find Alberta roommate rental resources? Click here.
If you have a house with space that could earn additional income, taking in roommates may be a desirable option while acting as a safeguard if you lose your job. However, with the added income, there’s added responsibility. Be prepared, screen, document, and above all only choose roommates you’d enjoy sharing your home.
To take advantage of a proven tenant screening process – take the Find the Best Tenants masterclass. To save time and grief wondering if you’ve had your tenants complete the right legal documents buy the 10 Essential Editable Landlord Forms.
To have access to all the resources in one place – buy my book! Canadian Landlords Handbook.
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