Leasing multi-family property in Philadelphia is not easy. Although many landlords are aware of the more general requirements for leasing property, such as applying for a Commercial Activity License and Housing Rental License, many landlords are unaware of the city’s more unusual nuances that can impact how property can be leased.
One example is Philadelphia’s Three Unrelated Persons Rule.
Under the Philadelphia Code, “No student may live in an Educational Housing District in any dwelling which is in violation of the Zoning Code…including any dwelling in which more than three unrelated persons are living as a single household unit.” The Philadelphia Code, Section 9-2805(1). Simply put, landlords leasing multi-family property in the city’s Educational Housing District cannot have more than three unrelated students living in any single unit.
Landlords violating the Three Unrelated Persons Rule two times or more in any three-year period will immediately have all licenses and certifications associated with the property revoked. This includes the landlord’s Housing Rental License, which is required to collect rent. No licenses or certificates may be issued for the property for three years after the revocation.
The Philadelphia Code does provide certain protections for the landlord. One protection is that the Educational Housing District is limited to only the Fourth Councilmanic District and the Eighth Councilmanic District. Additionally, the student is required to notify the landlord prior to signing the lease that he or she is a student, give the landlord the name of the school where the student is enrolled, and advise whether the school is located in an Educational Housing District. This helps inform the landlord of whether the Three Unrelated Persons Rule may apply. A landlord is also afforded additional grounds for evicting the student including for multiple violations of the city’s excessive noise and vibration prohibition, which must be indicated in the student’s lease.
Although leasing to students in the Educational Housing District entails additional compliance requirements, it also provides the landlord with additional degrees of safety that are otherwise unavailable. Before deciding to lease to students, however, a landlord should first determine whether the property is located in the Educational Housing District and consider whether the landlord should obtain a variance to mitigate the Three Unrelated Persons Rule.