How Many Tenants Can Live in a Rental Property? A Complete Guide for Landlords

Landlords face a unique challenge when it comes to managing rental occupancy standards. Balancing the wear and tear that comes with more occupants and navigating the complex web of ever-changing laws and regulations can be daunting. This article is your go-to guide to learning how to create rental occupancy limits for your property. 

This article answers critical questions such as “How many tenants can live in a house?” and “How many people can be on a lease?” We’ll explore numerous factors in setting rental occupancy limits, offer tips to avoid housing discrimination, and answer some FAQs about rental occupancy! Whether you’re new to rental ownership or an experienced landlord looking to learn more, this guide equips you to set rental occupancy limits properly and become a successful rental property owner.

 

How Many People Can Live in a Rental Property?

According to the national Department of Housing and Urban Development (HUD) standards, the general rule of thumb for rental occupancy is two people per bedroom. However, landlords must recognize that these numbers can change depending on several factors. Below are a few components that can affect your rental property’s occupancy regulations:

• Size of Bedrooms: Although there’s usually a 2-person per bedroom rule, the size of said bedrooms can change this limit. For instance, if a 2-bedroom rental has one much larger bedroom, it may not adhere to the typical 2-person per bedroom ratio, possibly allowing for more occupants in the home.
• Property Size: Similar to the previous factor, a property’s square footage or extra space can also affect the 2-person per bedroom rule. For example, additional occupants may be allowed if a house features a convertible office or den due to extra square footage. 
• Age of Children: As a landlord, it’s crucial to ask families how old their children are before determining if they exceed the maximum rental occupancy. For example, applying for a 1-bedroom apartment may work out if two adult parents have an infant child. However, if two adult parents with a teenager apply for the same apartment, they may be denied due to their child’s age. It’s crucial to pay attention to the ages of family members before denying or allowing families to rent your property.
• Property Specific Regulations: The structures of certain buildings, such as sewer and septic systems, may not be able to handle a certain number of occupants. In this case, landlords can limit the number of tenants in their rental. 

In addition to a rental’s size, the age of the tenants’ children, and property-specific regulations, there are also nationwide orders that landlords need to be aware of when setting occupancy limits.

3 Nationwide Rules that Landlords Need to Know

Here are nationwide 3 regulations you need to be aware of as a landlord regarding rental occupancy:

1. 1988 Fair Housing Act (FHA): The 1988 Fair Housing Act recognized familial status as a protected class. How does that impact rental occupancy? The Fair Housing Act prevents landlords from discriminating against families based on size, meaning landlords can’t deny tenants based on the number of children or if they have any children at all. 
2. The 1991 Keating Memo: Following the 1988 Fair Housing Act, confusion arose between landlords and tenants regarding rental occupancy. To address this, the Keating Memo was crafted in 1991 to aid local courts in determining what constitutes reasonable occupancy. The Keating Memo encourages landlords to consider the following when choosing rental occupancy: Age of children in the family, square footage of the rental unit, and size of rooms. The 1991 memo also states, “An occupancy policy which limits the number of children per unit is less likely to be reasonable than one which limits the number of people per unit.” Adding these guidelines clarified occupancy limits, helping both landlords and tenants understand how to determine renting eligibility.
3. International Property Maintenance Code (IPMC): The IPMC dives deeper into the specifics of rental occupancy guidelines compared to the Fair Housing Act and Keating Memo. Where local and state laws fall short, the IPMC is a set of rules landlords can follow regarding rental occupancy. The code outlines the following rules: 

• Any 1-person bedroom should have a minimum of 70 square feet.
• Shared bedrooms must have a minimum of 50 square feet per person.
• Occupants may not use kitchens or other non-habitable rooms as a bedroom.
• 1–2 occupants require a minimum of 120 square feet of living room space.
• 3–5 occupants require a minimum of 120 square feet of living room space and 80 square feet of dining room space.
• Six+ occupants need at least 150 square feet of living room space and 100 square feet of dining room space.

It’s important to note that while following these nationwide guidelines is essential, landlords must stay up to date with state and local regulations that may apply. These rules can vary and sometimes be more restrictive than those outlined above. As a landlord, you must consult with local housing authorities or do extensive research to ensure full compliance with all applicable laws. 

How Do Landlords Create Occupancy Standards That Avoid Housing Discrimination?

Thus far, we’ve outlined numerous rules and factors to consider when creating rental occupancy standards for your property, whether a 3-bedroom apartment or a single-family house. But how do landlords set an occupancy standard that doesn’t violate state and federal housing laws? Above anything, compliance with the Fair Housing Act should be your top priority. Outlined below are a few guidelines you can follow when creating occupancy standards to avoid discrimination charges: 

• Study the policies of the 1988 FHA, the Keating Memo, and the IPMC, and ensure you’re regularly aligning your standards with their rules.
• Limit your rental’s occupancy to the number of people living there rather than the number of children. 
• Identical units must have the same occupancy standards.
• Decide when a child is considered an occupant (e.g., after five years of age).
• Outline your occupancy standards to all tenants equally instead of directing them only to families.
• Follow applicable laws and building zones or codes that could affect occupancy limits.
• Stay informed with changes to federal, local, and state housing laws.

The best way to create occupancy standards and avoid discrimination charges is to treat every tenant equally, whether single or a part of a larger family. It’s also paramount that your occupancy limits strictly adhere to state, federal, and local laws. After you’ve crafted your occupancy standards, make copies of your policies and distribute them to all tenants. Include an occupancy clause in the lease agreement to ensure every tenant knows your occupancy policies. While posting these limits online isn’t necessary, keeping them filed in a safe place for future reference is essential. 

4 FAQs About Rental Occupancy

Do you have more questions about rental occupancy limits? Here are 3 FAQs about regarding rental occupancy standards:

How Many Tenants Can Live in a House?

The maximum number of tenants allowed in a rental house depends on several factors, including the property size, local ordinances, and state laws. 

Typically, nationwide standards apply the 2-person per bedroom formula. However, states like California use the “two-plus-one” rule, meaning two people are allowed per bedroom plus one additional person for the household. 

However, landlords should always consult local housing codes, comply with state regulations, and follow the policies outlined in the FSA, the Keating Memo, and IPMC to determine the specific limits for their rental properties.

How Many People Can Live in an Apartment?

Generally, the 2-person per bedroom rule also applies to apartments, which means up to two people are allowed to occupy every room in a unit. Once again, occupancy limits vary depending on the apartment’s location, layout, or size. 

In a California 3-bedroom apartment, maximum occupancy is generally set to 7 people, adhering to the “two plus one” rule. However, other states may only allow 6 occupants in a 3-bedroom apartment due to regional restrictions. When setting occupancy limits in an apartment, ensure your policies comply with local regulations and fair housing standards.

How Many People Can Be on a Lease?

No legal maximum number of people can be listed on a lease. However, landlords have the discretion to set reasonable limits based on the size of the rental unit and occupancy standards. 

Generally, all adult occupants should be listed on the lease to ensure that each is legally responsible for adhering to its terms, including rent payments and property care.

Hire a SoCal Property Management Company To Ensure Fair Housing Compliance

Whether you’re new to rental ownership or are a seasoned landlord, creating an occupancy limit for your property can be overwhelming. Not correctly following federal, state, and local regulations could result in a costly lawsuit—yikes! So, how do you properly navigate the waters of crafting occupancy standards for your property without getting into trouble? This is where TrueDoor Property Management can help! 

TrueDoor Property Management offers expert services to navigate state and federal policy changes, ensuring your rental properties adhere to new laws while optimizing occupancy rates. We manage over 800 rental properties in the Inland Empire and Orange County, helping landlords adhere to fair housing regulations and filling their rentals year-round. By partnering with SoCal’s trusted property management team, you can safeguard your investments and streamline your rental operations for maximum performance.

For personalized advice and comprehensive management solutions that align with the latest laws, contact TrueDoor and take the first step toward securing your rental property’s future success.