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Avoid Home Foreclosure by Become a Landlord and Renting a Room

UPDATED: June 19, 2018

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The homeowner facing a potential foreclosure might consider home sharing to earn the extra income to make the mortgage payments. In fact, renting a room in your house may be the most effective way for the owner to avoid foreclosure. However, by becoming a landlord, the homeowner is implicitly agreeing to take on certain responsibilities. 

Becoming a Landlord

In most jurisdictions, a homeowner who rents a room to a tenant is treated as a landlord and subject to the same legal requirements as any other landlord. 

  • Security deposits might be regulated both in amount charged and the details of their handling and return. Many states require keeping a separate bank account for the deposits. Most states require an accounting be delivered to the tenant within a specified time period after the tenant moves out.
  • Lock-outs are illegal. Changing the lock or adding a new one to prevent the tenant from entering even though you own the property is forbidden, and can result in civil and criminal liability.
  • Entering the tenant’s room without permission, or at least without giving proper notice, is never allowed.
  • The homeowner must comply with the jurisdiction's laws regarding abandoned goods, if the tenant leaves some belongings when moving out.
  • You can’t just throw the tenant out for whatever reason you want. And you’ll need to give proper notice to do it at all.
  • You can’t discriminate based on certain types of characteristics, such as race, gender, age, and disability status.

Month-to-Month Leases

The homeowner might want to rent using a shorter tenancy period, such as a month-to-month lease. The shorter tenancy facilitates a more speedy termination, if the situation is not satisfactory. And, be sure to put the lease in writing to avoid misunderstandings.

Tenant Screening

In addition to being required to follow most traditional landlord tenant laws, the homeowner/landlord faces additional risks by living on the property. Tenant screening is essential for home sharing. Requesting and obtaining a credit report is a must task. The tenant might not pay and even run up your utility bills. The tenant might steal from you or worse. Consider getting a criminal background check if it is legal to do so in your jurisdiction. Remember that the arrangement is to pay your mortgage and avoid foreclosure.

Rental Income

The homeowner is required to report rental income to the Internal Revenue Service, but can also deduct certain rental expenses.


Home sharing can be an effective method to boost your income when you are unable to make your mortgage payments. However, be sure the terms of the tenant’s lease are clear, and you fully understand the laws that apply to you as the landlord. Also carefully screen potential tenants. The homeowner cannot afford to rent to a tenant who does not pay or poses a risk to you or your property.

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