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Some leases require that all occupants (tenants) are required to be on the lease. What is the reason for this?

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It means that more people are responsible for meeting the obligations of the lease (principally the payment of rent). This means that the landlord has more options if obligations are not met. Co-tenants are typically held "jointly and severally liable" for the rent, which means that the landlord can collect the entire amount from any single tenant, all of the tenants, or any combination of the tenants.

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A few reasons:

One reason is Squatters' rights. If someone stays long enough on a property without paying rent, they get certain legal rights to continue living there for free indefinitely.

Or even if such a tenant can't live there for free indefinitely, a tenant who knows the law can easily drag out eviction proceedings for years in some areas (all the while not paying a cent of rent and potentially damaging the property itself). This is why it's important to know who's living in the house and through a background check, it's important to know if there was ever any previous eviction proceeding against one of your future tenants.

Also, some states have some laws that encourage the repossession of houses if family members or tenants are found to be dealing drugs from that property. And then, there is the issue of damages. One working tenant living in a house is going to do a lot less damage than one working tenant plus a dozen of his drugged out unemployed friends living with him.

And then there is this case of a warehouse burning down during a rave and killing 36 people, where the landlord might be charged with involuntary manslaughter or murder.

In other words, a landlord has to be extremely careful as to who he will officially let in his rental property and he has to take immediate legal action if he sees someone living at the property who's not on the lease or if he sees dangerous things going on at his property.

And a lease is to protect the owner, but also to protect the tenant. For instance, a landlord can't kick out a tenant in less 30 days (barring a serious crime) and a tenant can not just leave without giving 30 days notice and not be liable for the last 30 days of rent (barring some serious reasons or barring a longer lease).

  • I'm not sure your analysis does justice to the risk of "squatter's rights" where the occupants "not on the lease" may have been given permission of entry by those who are, in which case they are not even trespassing, let alone squatting. – Upnorth Sep 26 '17 at 4:51

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