In NJ, a regular rental requires a certificate of occupancy (CO).
Security Deposit of 1.5 month rent
Prepare a written agreement.
I suggest month to month, in case you don't like or have a problem with the roomie.
Your tenant should also have ( and you should require they do) Renters Insurance - info here:
The reference here contains plain english in NJ Landlord Tenant Law.
You should also look into running a credit report. No reason to get stuck with a dead beat roomie.
RentLaw.com Tenant Screening for Small Landlords is easy to use. You create a free landlord account.
Once you find a tenant, get their email address, plug it in. They get an email from rentlaw.mysmartmove.com and complete the app. You get the results with a recommendation based on their credit.
Get copy of DL and Social#. RentLaw.com also has a free credit app.
Great for Landlords and Tenants
David gave a very comprehensive answer.
Call the town and see how they define tenant versus roommate.
In W Orange a CO is required for all new leases and sales.
You need to go to the Fire headquarters on Valley Rd and pay for the inspection ahead of time ($35 if the inspection is at least 2weeks ahead of time), and to set up the appointment.
To be in compliance - You will need to have smoke detectors on each level of the home - you will receive a form that indicates where they belong. You will also need carbon monoxide detectors within 10 feet of any bedrooms - in addtion, you need a fire extinguisher in the kitchen (no more than 10lbs) - unlike other towns, WO does not require that the extinguisher be attached to the wall.
Hope this helps
Here is also the rules regarding security deposits: http://www.state.nj.us/dca/divisions/codes/publications/pdf_
Hope that helps.