Renting with roommates? Protect yourself

Rent it Right

Q: I recently moved into an apartment with another roommate. We both signed a month-to-month rental agreement. On the second of January, I came home and found she had moved out, had not paid her portion of the rent, and had left her room totally trashed and painted weird colors.

I’ve paid the full rent for January and I have found a replacement roommate who starts March 1. My question is: What can I sue my ex-roommate for? I spent a ton of time and some money repainting and repairing the bedroom. –Bethany L.

A: Your and your ex-roommate were co-tenants, which means that the landlord could demand the full rent from either of you. How the two of you divide the rent is up to you, and careful co-tenants write down this understanding, along with other key issues involved in living together (Who pays the utilities? How long may guests stay?), in a roommate agreement, signed by both. An agreement should also address what the roommates will do if one wants or needs to leave — some roommates require that they give each other plenty of notice, so that the remaining resident has lots of time to find a sub.

I’ll bet you had no written agreement, and simply agreed to split the rent. You probably also didn’t discuss how you’d handle someone’s wish to leave. Now, while landlords are legally entitled to proper notice before a tenant can terminate a month-to-month rental agreement (30 days in most states), no such law governs leave-takings between co-tenants. Although it might be fair to expect a roommate to give other occupants sufficient notice (say, at least as much notice as the roommate should give the landlord), and to make her pay her share when she fails to do so, a judge might not order it.

You time and materials spent repairing and painting the roommate’s bedroom are another matter, however. You would have had to take these steps at the end of your tenancy, in order to avoid a deduction from your security deposit. And presumably, your ex contributed to that deposit. When you leave, and the landlord returns the deposit to you (it will be intact if you’ve left without owing rent and have left the place clean and undamaged, except for normal wear and tear), you could write a letter to the ex, explaining that you’re refunding her share of the deposit minus the expenses you incurred to clean up after her.

Protect yourself when you rent to the next roommate. Require her to pay you her full share of the deposit. If she isn’t responsible for any deductions, she’ll get it back; meanwhile, the original tenant’s deposit share will be returned to you, which you can handle as explained above.

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Q: I recently fired my longtime manager, whom I suspected of having his fingers in the till. He had worked with me for many years, knew all of the tenants, and had access to their tenant files, of course. I’ve learned that he’s been contacting them via phone and e-mail, suggesting that they consider renting at the complex where he now works. Is there any way I can legally stop him from stealing my tenants? –Brian W.

A: As annoying as it is, there’s no certain way to stop your ex-manager from soliciting your tenants. That’s because the closest legal theory you might have is to argue that your tenant information — your roster of tenants, and their contact information — amounts to a trade secret. As you will see, however, it’s doubtful that you can establish that this information is a trade secret.

A trade secret is any information that provides a business with a competitive advantage and is treated confidentially — for example, information that you keep locked in your office and that others can obtain from you only by signing a nondisclosure agreement. (By the way, employees are bound to maintain trade secrets even without an agreement.) Your list of tenants is similar to a customer list. Businesses often try to protect customer lists as trade secrets, but there’s a problem: Courts refuse to protect information that is readily ascertainable by legal means. For example, courts usually won’t protect a customer list consisting of names, addresses and phone numbers.

If you have assembled unique information about your tenants — such as their likes and dislikes, emergency contact information, or employment or financial information — that complex information may qualify as a trade secret. If so, your ex-employee’s use (or abuse) of this information could be the grounds for a trade secret lawsuit. But, based on your description of the activity, it sounds as if your ex-manager could accomplish the same thing (contacting your current residents) by sending letters to "Resident" at the addresses at your complex (the addresses are not secrets). And of course, if the names of your tenants are on their mail boxes, the information is definitely not a secret at all.

One other point to consider: While it may not be illegal for an ex-property manager to notify residents of other rental opportunities, if the ex-employee is making false statements with the intention of inducing tenants to break their lease with you, you may have the basis for a claim known as "tortious interference with a business relationship." You would need to contact an attorney before proceeding on that basis (and of course, you will need evidence of your claim, not merely a suspicion that your business has been harmed).

Rather than contemplating a lawsuit to stop this ex-manager, consider a little marketing campaign in response. In a letter or e-mail blast of your own, assure your tenants that the recent change in managers will mean that their needs will be carefully attended to, or words to that effect. While you must not disclose why your manager is no longer working for you, your assurances that all will be well might reasonably be read as "Problem fixed." Tenants who get the message won’t savor moving back into the arms of the former manager.

Janet Portman is an attorney and managing editor at Nolo. She specializes in landlord/tenant law and is co-author of "Every Landlord’s Legal Guide" and "Every Tenant’s Legal Guide." She can be reached at janet@inman.com.

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