Lease-by-room, also known as individual leasing, is an arrangement whereby a tenant and their roommates pay rent for their own rooms instead of each tenant being equally liable for the rent for the whole apartment.
Typically lease-by-room leases are multi-room apartments or townhomes with shared bathrooms and living rooms.
What distinguishes lease-by-room leases from joint leases is that tenants take on a lower financial risk, as they will not have to cover if their roommates do not pay rent and they cannot be evicted if their roommates fall behind on payments.
[4] The benefits and downsides for landlords are largely the reverse of the tenants.
Since tenants need housing and are not always willing to risk the possibility of eviction, homelessness, or significant financial loss if roommates fail to pay a joint lease, landlords are able to charge higher rent for lease-by-room agreements.