[belmarnj]

I have a question and not sure where to turn, I have a residential rental property. I have the lease ready and it was sent back to me by the "tenants lawyer. He asked that the lease be changed from "Tenants" to Occupants. And that the "Occupants" be listed as Managers from their corporation rather than as individuals. My gut tells me something is up and I was wondering if anyone might be able to give me advice on this topic.

Thanks for any and all help!

[Cvillecpm]

Send the lease back to the "tenants" and give them 5 days to sign the original lease or no deal... ignore the attorney.

You don't want their corporation to be the tenant/occupant, guarantor, etc. IF the corp declares bankruptcy, the bankruptcy trustee an call back all rent payments for the last 6 months... it's like arguing with the IRS... have a policy to rent to HUMANS only and have their corporation pay them and give them a 1099 to cover the rental payment.

[Fr_Chuck]

The issue being that their managers will change from time to time and the actual people residing at the property will not be the same, and they don't want to have legal issues when they change managers. Also you will have the issue that when one moves out and the others move in, if the one is listed by name, he has a legal right to be on the property even if fired by the corporation.

So if you have Joe listed as a tenant and they sign the lease, if he gets fired, the coporation is not paying his rent, you have to evict him, and can not take him off the lease without his permission, which he may not give if he is fired.

So if this is property for various management, not just one management person, listing specific people may not work well for them and for you.

A corporation is considered an individual for contract purpose, and you can have the contract between you and them, with them holding the right to decide who the tennants will be.

But in the end, it is your lease, if you want to leave it as is, merely tell them no, if they don't want to rent then they can find someplace else and you can find another person to lease it.

[excon]

Hello bel:

Something is up. But I'm not sure with whom. If I understand correctly, this is a house, not a commercial property. You are renting to an individual – not a corporation. It's fine if the occupants/(tenants) are listed, and who cares where they work? Or does he want the term “manager” and not their names, so he can move them in and out. If that's what he wants, then you are not renting to an individual, you are renting to the corporation. Family's don't have managers.

If moving people in and out is OK with you, then go ahead. Plus, renting a residence to a corporation is fine, as long as they act like residents. Most zoning laws would prevent them from operating a commercial enterprise from your home. But, if all they're going to do is telecommute, and they would be indistinguishable from the rest of the neighbors, then they should be OK.

If you have trouble, corporations can be evicted just as easily as people.

excon

PS> If I've misunderstood, and he wants you to change every mention of the word tenant to occupant, then I would refuse. There is no landlord/occupant law to protect you.

[ScottGem]

Chuck has it right. This is neither shady nor unusual. My company does the same thing, we maintain residential apartments for use by executives who spend part of their time in our area and part in another area. So the lease is between the corporation and the landlord, since the corporation pays for and maintains it.

The disadvantage to you is that, in the case of the corporation failing, you could be left holding the bag. On the other hand, corporations make for conscientious tenants and good payers. So if the company is solid, I see no reason not to deal with them. But it is your decision.

[Cvillecpm]

If you did not understand you were entering into a "corporate rental" - then you need to be educated on the pros and cons... the wear and tear on your rental property may well be greater with moveins/outs so the rental monies paid are generally but not always greater than the regular tenant would pay.

[ScottGem]

I have to disagree here. Generally corporate rentals can remain unoccupied for periods. There is usually less wear and tear. Mostly furniture is rented so moving in and out is not a burden.

[Cvillecpm]

Scott - even without occupants someone has to check on the unit periodically. No occupants for long periods - usually 60 to 90 days - is a red flag to insurance carriers so this type of tenancy is problematic.

[ScottGem]

Scott - even without occupants someone has to check on the unit periodically. No occupants for long periods of time - usually 60 to 90 days - is a red flag to insurance carriers so this type of tenancy is problematic.

Not necessarily. My company periodically checks on our rentals. They are generally occupied more than they aren't.

Also, since its not a primary residence, there is less of any real value.

[belmarnj]

Thanks to everyone for responding to my question. I sincerely appreciate all the help. I explained to my prospective tenants that I felt uncomfortable with changing tenant to occupant on the lease, and they agreed to sign saying the company lawyer from out of state suggested it. As far as leasing to the CorporationI explained that I liked more control over the property and having a comfort level with who was living there. They agreed and decided to sign as individuals. I also found out this company is working as a bankruptcy liquidator for a local furniture company.

Once again thank you for sharing your knowledge and wisdom with me. If in any way I can be of service please do not hesitate contact me.

[ScottGem]

That really was the key here, YOUR comfort level. There are many factors that go into this decision, not all of which were known to us. So you are the best person to make the decision.