I bought a new house late last year. I was lonely, so I looked for people to come and share the house with me, preferably people I already knew so that I would be more comfortable.
Two other acquaintances were already in the market for a new place to live. I offered for them to come live with me for awhile. One took me up on the offer; the other is still weighing their decision.
A couple of months in, the person living with me made an offhand remark that they had a single-digit dollar amount in their checking account. They didn't seem worried. On the other hand, I panicked, thinking this person wouldn't be able to pay their share of bills. I am successful, but I don't make enough money to support two people. But they paid their share of the bills, so I let it go, but it still worried me.
We're now a few months in. This person still barely has any money in their checking account if their comments are any indication; they are living paycheck to paycheck and have not changed their spending habits. This person has trouble making their money last enough to buy food and pet supplies, yet they are purchasing non-essentials for their hobbies. They also receive financial assistance with foodstuffs from their parent and friends. I am only charging this person a third of rent, because that was the original written agreement with the understanding that the other person would also move in. I am charging them whatever portion of utilities they use, because this person uses more than half.
At this point, I am worrying sick (literally, this is affecting my physical and mental health) about this tenant not being able to pay bills. So far, they have paid on time, but at the same time, a single event (car accident, hospital stay, needing to care for sick family members, loss of job) would completely financially ruin them in less than a month with no backup to rely on; that would leave me with paying the full bills, which are in my name. I wish to terminate the lease of this tenant, because in my opinion, they have not learned the lessons of priorities and financial stability, as clearly they have not changed their spending habits in the time they have lived here, and that is a potential liability to me. I feel that all I am doing is enabling their lifestyle and subsidizing their habits, and I have no wish to tempt fate.
I will also admit that this was partially of my own doing to myself. I am not guiltless; even though I knew this person had bad credit, I thought that, perhaps after being given a financial break for a little while (I am, after all, charging them less than half the going rate for an apartment, and this is a much larger space than any apartment), this person would be able to get back on their feet financially and become self sufficient. I was foolish enough to be taken in by their explanation of that bad credit and how things were going to change. In my opinion, this change will not happen; this person's spending habits will remain the same as long as they are financially enabled to do so (in other words, as long as they live here). I understand that I brought this onto myself, and now I wish to bring this situation to a close as cleanly as possible.
What I am looking for are suggestions. Options. I don't need to be soft-coddled--I'm aware I did this to myself, and it was a stupid decision--but I don't need to be e-whipped either; I've done plenty of mental flagellation already. I'm rather good at worrying and stressing. Per the laws in the state where I live, if I were to terminate lease, this person would have 30 days to vacate the premises. In that time, I worry that this tenant will pull all sorts of drama at home, publicly attack my reputation via social media (which can be damaging as I have other assets that are tied in with my reputation, not the least of which is my day job), or potentially (since tenant is currently depressed) physically lash out, whether at myself or property. However, I cannot continue to have such a potential liability on my hands. (As an aside, our personalities and lifestyles are also diametric opposites. Also a problem.) What can I do with this?
Have you considered rent guarantee insurance?
This person knows it's causing me problems. Their response is usually 'don't worry about it, I'll have the money in time.' Twice we have had a 'come to Jesus' talk. I would honestly rather tell them that their lease will expire on, say, May 1 (to give them the courtesy of time to find another place to live, and so that I don't look like a complete dictator), but I'd still have that amount of time to worry about the paying of bills (particularly since there are down payments required for apartments, two if you have a pet) as well as the ensuing fallout. Somehow, I think no matter what I do, there will be fallout.
I went and had a look at rent guarantee insurance (I didn't know about it before now, so thank you for that suggestion)--I could not find, with a basic Google search, any companies that do that sort of business in my state. I did note that many of the existing entries required the tenant to pass a credit check. My tenant would fail that check very quickly. Are there any companies that would insure financially unstable tenants, by chance? (My guess is no, simply because a payout on their behalf would be much more likely, but I could be wrong.)
This thread has expired - why not create one of your own?