A Guide to Shared and Communal Housing for the Elderly

Vol. 24 No. 2


John K. Larson is an attorney specializing in estate planning and is president of The Larson Law Firm, P.C.

The article was originally published in GPSolo, Vol. 30 No. 4 (July/Aug. 2013). © 2013 by the American Bar Association. Reproduced with permission. All rights reserved.

Imagine the situation of a 65-year-old woman—let’s call her Doris—who now lives alone after her husband passed away a year ago. Her children—let’s call them Eric and Diane—are both married and live out of state. They visit her occasionally, but with their respective families’ responsibilities and their lives becoming more hectic, they do not have as much time to spend with their mother as they once did. With her husband’s death, her income and retirement needs have changed. While Doris is fully independent, she is at a stage in her life where she is looking at various living alternatives that suit her new circumstances.

Doris’s story is familiar to many firms that deal with elder law issues. As her lawyer, what guidance can you offer her? Shared housing and communal living are becoming increasingly attractive options among seniors because of the numerous benefits: inexpensive rent, shared responsibilities, resource-efficiency, independence, and companionship. Shared housing is defined as two or more unrelated people sharing a home. There are two main types:

  • Match-up programs allow homeowners an opportunity to rent out vacant bedrooms following a screening/matching process. Rent is generally reduced because there is a “service exchange” involved, such as housekeeping and caregiving.
  • Shared living residences (SLRs), also known as communal living arrangements, are homes where multiple tenants each have a private bedroom, sometimes a private bathroom, and shared common areas. This could apply to two residents who rent a home together, communal residences, or a large community facility.

Cohabitation Agreements

Whether Doris decides to room with an old college friend, her bridge partner, or a graduate student from the local university, it is important that she has a written agreement outlining the terms and obligations, as well as possible services provided. Below are issues for practitioners to consider when preparing a roommate or cohabitation agreement.

1. Term

Will this be a fixed-term lease or a month-to-month rental agreement? How long will it last, and will it automatically renew? The choices will depend on the amount of flexibility your client wants in the arrangement.

2. Parties to the Agreement and Location of Communal Property

All the residents of the home must be listed on the lease or rental agreement to ensure the parties are legally responsible for all the terms. Also, the property intended for communal habitation must be listed by address, legal description, and/or other identifiers.

3. Rent and Deposit

Rents should be determined based on a percentage share and dollar amount and should be subject to adjustments under identified conditions such as due date, responsibility for late charges, and joint and several liability. To avoid confusion and disputes, the agreement should include details such as acceptable payment methods, whether late fees will be due, and whether or not charges will be assessed if a rent check bounces. Deposits are essential to ensure funds are available to be applied to damages or defaulted payments. The dollar amount, along with the use of the security deposit, should be spelled out in the agreement.

4. Private Room and Communal Areas

The bedroom assignment and guidelines on use of communal areas will provide continuity to the new living arrangement. Specify whether it will be a smoke-free household, be a pet-friendly environment, and/or have any limits on use of other rooms or amenities. Be sure to include a clause in the agreement about guests and visitors. Will there be bedroom or common area limits, responsibility for guest behavior and damages, and limits on overnight or longer stays?

5. Utility Bills, Groceries/Cooking, and Household Duties

Utility bills (water, electricity, phone, cable, Internet, and garbage) should be based on percentage share or identified by individual use or needs. Household duties, such as cleaning, cooking, and grocery shopping, and in some cases caregiving, should be identified in the agreement. In some cases, the rent may be reduced based on an individual’s contribution to the household.

6. Personal Items

The agreement should state allowable or restricted use of another roommate’s personal items without prior approval, as well as liability for damage to borrowed or used items. Specify where shared purchased items will go after termination, death, or incapacity.

7. Termination, Applicable Law, and Dispute Resolution

The agreement should also include a termination agreement that outlines the terms for when a resident leaves, voluntarily or involuntarily. The rental or lease agreement should comply with all relevant laws in the property’s jurisdiction, such as rent-control ordinances, health and safety codes, occupancy rules, and anti-discrimination laws. Finally, outline what happens when a dispute occurs and the possible resolutions, whether they are informal, by unanimous or majority rule, or formally controlled by an identified party, arbitration, or court proceedings.

Every person is different and has different living requirements; the agreement should be tailored to the needs of all parties involved. Make sure your client knows what he or she wants and needs—there are many housing options to choose from, so there is no need to settle. It is important to be flexible and realistic when drafting the agreement. Encourage your client to live with the prospective roommate(s) for a week or two to see if the situation is compatible before the agreement is finalized.

Owning a Home for Seniors

Shared housing is not only a popular option for seniors looking to rent but also for people wanting to own a house for seniors, whether for investment purposes or out of necessity.

After the death of his father, Rick Pfeiffer of Portland, Oregon, was appointed as trustee of his father’s trust and had to make the decision whether or not to sell his father’s home. Based on the market and the current value of the home, it was not the best time to sell the residence. Pfeiffer decided to rent out the property until there was a more favorable economic environment. The same economy that prevented Pfeiffer from selling the property inspired him to focus on helping seniors. He decided to rent out the home, which sits on a golf course, to a group of seniors.


Under the Fair Housing Act, applicants for housing cannot be turned away for arbitrary reasons. Therefore, it is important for the homeowner to put in place certain practices to maintain peace and accommodate varying personalities. For example, it would be a good idea to have house meetings once a month, allowing residents to voice concerns before disputes become more serious.

Business Entity and Insurance

To protect the property and personal assets, clients should consider purchasing insurance, using limited liability protections from a business entity, and managing the property and its finances as a business to avoid exposure. Although insurance provides some level of security, it is the uninsurable risks, such as conduct that is more than simply negligent, that are most damaging to an investor. Along with insurance, the best way to protect assets from the reach of a creditor is to form a business entity, such as a corporation or a limited liability company. The client’s exposure to liability is thereby limited to the assets of the business entity and only those assets.


Additional care is needed if your client wants specifically to target seniors as potential renters. “The most difficulty I had was in regard to advertising the home and complying with the Fair Housing Act,” said Pfeiffer. He tried advertising the home as “Rooms for Seniors,” but this listing was not in compliance with Fair Housing Act regulations.

The U.S. Department of Housing and Urban Development has issued guidelines for establishing the exemption for “housing for older persons.” To qualify for the “55 and older rule,” the housing facility must:

  1. Have at least 80 percent of its occupied units occupied by at least one person 55 years of age or older;
  2. Publish and adhere to policies and procedures that demonstrate the intent to operate the units for persons 55 and older; and
  3. Provide verification of the occupancy and policies and procedures as required by the Fair Housing Act.

It would follow that any advertising for a 55-and-older dwelling must clearly identify the age limitations and policies, allowing it to be exempt under the Fair Housing Act. Therefore, “Rooms for Seniors” would be an inadequate identification. The problem comes not from identifying the targeted group as seniors, but from failing to identify the targeted group’s age as 55 or older.

If the renting of individual rooms within a single-family home is not a current local practice, then the local agency that enforces the Fair Housing Act may not have a policy covering that arrangement. The local enforcement agency should be contacted in advance to discuss the practice.

Finally, even though renting housing to older persons may not violate the Fair Housing Act, local ordinances or zoning may limit the number of unrelated individuals who may reside in a single-family home. Zoning and homeowner association rules should be consulted before the advertising and rentals begin.


Whether your client is a resident or an investor, no situation will be perfect. However, with the proper written agreement, your client’s needs can be met—and a solution will be available if the roommate’s poodle is a terror.


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