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June 30, 2009

Not-So-Empty Nests

The inns and outs of roommates

Meg de Jong

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Many people can use a little extra help paying off the mortgage on their home or condo. One tried and tested way of doing this is to take on roommates. It’s a great way to get a bit of financial assistance, share utility bills and perhaps even fill an empty home.

The mention of the word “roommates” however, is sure to spark some interesting conversations. “The last roommate I had,” a friend advises, “never wore pants, stayed in his room 24/7, kept nocturnal hours and constantly smelled like fish.” Other common horror stories include the noisy roommate, who made sure you knew all about her sex, drugs and rock ’n’ roll lifestyle (and also the ins and outs of her relationship with her boyfriend, as she screeched at him over the phone from the bath) and the roommate who was so filthy, the boxes of dirty dishes in their room had to be incinerated after they left. These anecdotes, like a good urban legend, serve to illustrate the caution needed when selecting a roommate, and the importance of a thorough screening process. However, “You can’t judge a potential roommate by their appearance,” says Bruce Clare, a homeowner who has taken roommates on many occasions. “I’ve had roommates who looked rough around the edges, that I took a chance on, that were way better tenants than some who came across as super respectable.” In other instances, you can get such good roommates they become lifelong friends. “I’m still great buddies with my roommate from college,” says Brian Arsenault. “And it’s been many years now. He’ll probably be my best man someday,” he jokes.

There are many things to take into consideration when sharing a home. There are certain legal points that both homeowners and potential renters should take note of when looking for a roommate. Kelly Dodds, a landlord and tenant information advisor for the Residential Tenancy Board in Red Deer, explains that roommates that aren’t named in a lease agreement are not covered by the Landlord Tenant Legislation. Instead, she clarifies, this instance is referred to as an “innkeeper situation.”

“It’s not a landlord tenant relationship, you don’t have the protection of that legislation,” says Dodds. “People need to protect themselves and not just assume.” One way she suggests you do this is by looking into the Innkeepers Act. Even though the act is somewhat vague and designed more for use in hotels, inns and taverns, there are some important points to note. One of the more critical stipulations, according to Dodds, is the fact no notice is required by either party under the Innkeepers Act. This means, as the innkeeper (in this case, as the owner of the home taking on roommates), you can evict your guest promptly if necessary.

The flipside of the situation is that your guest might leave in the same manner, which could be problematic if you are relying on their financial contribution. As a precaution, Dodds strongly recommends drawing up a “House Rules” contract between roommates. This arrangement will protect both parties, and also serve as a protocol for the residence. In the agreement, roommates would accede to usage of shared utilities, notice and rent payment agreements and other things like permitting overnight guests or laundry hours. Another very important point to note is the fact that the innkeeper can legally withhold guests’ belongings if there is money owing.

Doug Gray, a real estate lawyer and author of Making Money in Real Estate agrees it is best to put a contract into writing. “You don’t want to have any verbal misunderstandings,” says Gray. He recommends considering food details, access to utilities, allowance for smokers, regulation of music and television volume, the duration of stay of the boarder and basis of terms for eviction in documentation. “Nobody has any rights except for what is set out in the agreement,” he explains.

There are several ways one can go about finding a suitable roommate. Most commonly, people go by word of mouth, consult classifieds or post on notice boards in communities in which they are active. Another growing trend is to search online. One such company that facilitates this is Canadian Roommates Ltd., housed at roommates.ca. Company owner David Hostetter reports this method of finding roommates is “phenomenally successful.” The site covers every city in Canada, and the database of a few thousand people is growing by the day. Both homeowners and potential boarders can post their profile to the site to find a tailored match. Currently, the service is in a promotional phase and it is free to sign up, though Hostetter reports that eventually a $20 service fee per month will be introduced.

A computer system matches roommates through various compatibility checks. Things like age, sex, exact location (near a university or mall), lifestyle habits (whether someone works the nightshift, is a partier or homebody) or if they smoke or not are taken into consideration.

A similar program is run manually from Red Deer through the Community Housing Registry. After a $15 one-time joining fee, potential roommates go through an application process, and have their references checked and employment verified, before being partnered with appropriate roommates. Like roommates.ca, the Community Housing Registry considers many details when matching roommates—such as if an applicant has pets or not and the duration of their housing needs.

“The only way to get a place is to take on roommates because rent is so high in the metro area,” says Hostetter.
Dodds agrees. “A lot more people are going through this process because of the housing shortage,” she says. She also recommends taking boarders as a great option for empty-nesters.  CL

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