Residential unit: A unit within a building or complex for residential inhabitants.
Residential unit: A residence, such as a house, apartment, or room, within a larger structure that is distinctly separate from other living spaces within the structure and is intended as a single household for occupants to live and eat.
Renting a Residential Unit to Meet Mortgage Payments
A residential unit, a self-contained building or unit used as a dwelling by one or more persons who form a single household, is usually found within a building that houses other residential units.
Homeowners may not simply designate an area a living unit. There are certain requirements that must be met for this classification.
Boston, for example, establishes minimum conditions that must be met for a structure to be considered a residential unit. These include:
- functioning carbon monoxide and smoke detectors
- heat, water, adequate exits, and toilets
- being free of defects that could harm renters
- being free of pest infestations
- being free of garbage and other waste, and
- having contact information for the property owner visible.
The Massachusetts Sanitary Code lists rules and regulations for housing in order to protect the health and safety of tenants and the general public. All residential units must meet these codes.
“Each unit must have at least 150 square feet of total space for the one tenant. For each additional tenant, the unit needs another 100 square feet. Total living space includes all rooms except rooms with ceilings lower than five feet.
“A unit needs at least one electrical fixture and an outlet, or two outlets. They must be ten feet apart in a useful location. All units must have smoke detectors as defined by state fire safety codes.
“The room must get natural light from a window that’s equal to at least 8 percent of the floor space. A unit also needs a window that can be opened to at least 4 percent of the floor space.
“All buildings and units must have locks on the doors. Windows that open to the outside must have locks, too. Locks need to function in a way that they won’t trap people in the building.
“Doors and windows that open to the outside must have tight-fitting and self-closing screens. You can have screens that slide side to side. You don’t need to have screens on windows above the fourth floor,” the Department of Public Health says.
The law also states that “floors and walls must be smooth and nonabsorbent, and need to be easy to clean. Bathtubs must be watertight. Walls also need to be watertight up to 48 inches from the floor, and up to six feet in the shower. All bathrooms must have a toilet with a seat, a bathtub or shower, at least one light fixture, a door that can be closed, and a sink that’s not in a room used for sleeping, eating, or cooking. Plumbing fixtures must be properly connected to water and sewer systems. The bathroom needs to have decent water pressure. Hot water must be within the range of 110-130 degrees.”
Property owners must also provide tenants with light bulbs for common areas and install handrails on all stairways. They must also supply trash barrels if the building has more than three units and must move the barrels to the curb on trash day. If there are less than three residential units in the building, the tenant can be responsible for moving the trash barrels.
Oftentimes, homeowners facing default consider renting their home or a room to subsidize their mortgage payments. The same rules that apply to residential units in an apartment complex also apply to homeowners. Homeowners should be aware than money collected as rent is considered income and therefore it is taxable.
According to the Hawaii Department of Taxation, “If you receive rental income from renting out part or all of your house, condominium, apartment, second home, vacation home, or any other residential real property (“real property”) located in Hawaii, then you are engaging in a taxable business activity.
Also, “if you rent out real property located in Hawaii for 180 days or more (long-term rental), then you are subject to Hawaii income tax and the general excise tax (GET).If you rent out real property located in Hawaii to a transient person for less than 180 consecutive days (short-term rental), then you are subject to Hawaii income tax, GET, and the transient accommodations tax (TAT). For example, if you rent out your house for one weekend, the gross rental income is subject to the GET and TAT.”