Condo "Lease"

[Ready2Go]

So....my mother is moving in with my sister. She is is mid-to-late stages of dementia and really can't live on her own any longer. She has offered her place to my 29 yo niece as a place to live while my mother (her grandmother) is still alive. Everyone understands that the condo will be sold upon her death. This is a 2br, 2 bath, 2 car garage condo in a desirable complex and area. It would rent for approx. $1800 per month. I'm fine with her living there and she will pay some of the cost...HOA, utilities, etc. Nowhere close to $1800. I'm ok with the family discount as it is my mother's desire to do this.

Being the worrier among my siblings, I'd prefer that it not be open-ended. I'd like to have an annual lease agreement. If nothing else, in the unlikely event she becomes a junkie or flakes on her responsibilities, we can evict her or just not renew the lease.

The questions I have are...am I overthinking this? The condo is currently in a revocable living trust for me and my siblings....is that who needs to sign the lease?

Anyone have experience with this?

Thanks in advance.

 

[Texas Proud]

From watching the judge shows on TV I would say that you need to look at the state laws on tenants and what can be done..

Almost every one I have seen if there is no written lease then it is considered month to month and either party can give 30 days notice... so it should not be a problem...


Now, who is the trustee? They are the ones who have legal right to evict...

 

[aja8888]

So....my mother is moving in with my sister. She is is mid-to-late stages of dementia and really can't live on her own any longer. She has offered her place to my 29 yo niece as a place to live while my mother (her grandmother) is still alive. Everyone understands that the condo will be sold upon her death. This is a 2br, 2 bath, 2 car garage condo in a desirable complex and area. It would rent for approx. $1800 per month. I'm fine with her living there and she will pay some of the cost...HOA, utilities, etc. Nowhere close to $1800. I'm ok with the family discount as it is my mother's desire to do this.

Being the worrier among my siblings, I'd prefer that it not be open-ended. I'd like to have an annual lease agreement. If nothing else, in the unlikely event she becomes a junkie or flakes on her responsibilities, we can evict her or just not renew the lease.

The questions I have are...am I overthinking this? The condo is currently in a revocable living trust for me and my siblings....is that who needs to sign the lease?

Anyone have experience with this?

Thanks in advance.

Mom is moving in with your sister. (Mom has dementia)

29 year old is getting who's place?

Not sure who's in what?

 

[cathy63]

If your mother owns the trust and you and your sibs are the beneficiaries, then your mother (or whoever has her POA) would sign the lease.

From your side, it would be better to have a month-to-month lease, or an annual lease that converts to month-to-month after the first year.

 

[braumeister]

Have you looked at the rules in the HOA?
In my condo development, leasing is fine, but the lease must be in writing, approved by the HOA board, and for a minimum of six months. The occupant must also sign an agreement to abide by all the HOA rules.

 

[Ready2Go]

Mom is moving in with your sister. (Mom has dementia)

29 year old is getting who's place?

Not sure who's in what?

LOL.

Niece is moving in to my mom's condo....her grandma's. My mom is moving into my sister's house.

 

[Sunset]

Have you looked at the rules in the HOA?
In my condo development, leasing is fine, but the lease must be in writing, approved by the HOA board, and for a minimum of six months. The occupant must also sign an agreement to abide by all the HOA rules.

I have seen Condos, where leasing/renting is not allowed, and the HOA kicked out the tenants.

If the fair rent would be $1,800, then I would not rent for less than $1,500 as you will find there will be surprises, damage, etc.... and easier to charge more than to charge less and be upset at replacing the flooring.
After all you could rent it to a stranger for the full amount which is an extra $3,600 per year

Besides, you have to consider, to be "strictly legal", this will be a rental to the IRS, unless you are comfortable with that, you will have the added expense of someone to do the taxes regarding the rental.

The insurance as a landlord will be higher, and be sure the niece has tenant insurance with at least $1M liability (should only cost her $150/yr).

 

[Brat]

Carefully read the HOA CCNRs. Maybe because the occupant will be a granddaughter it would be considered to be exempt from any leasing rules (check housing laws).

If the CCNRs limit rentals it would be worth your while to consult a real estate attorney to prepare an occupancy agreement with the young lady to set some rules about her tenancy. I wouldn't announce the fact that your Mother has 'moved', only that she 'staying' with her daughter for a while. Keep her situation ambiguous.

 

[braumeister]

Carefully read the HOA CCNRs. Maybe because the occupant will be a granddaughter it would be considered to be exempt from any leasing rules (check housing laws).

If the CCNRs limit rentals it would be worth your while to consult a real estate attorney to prepare an occupancy agreement with the young lady to set some rules about her tenancy. I wouldn't announce the fact that your Mother has 'moved', only that she 'staying' with her daughter for a while. Keep her situation ambiguous.

That makes very good sense. You could even call it a house-sitting arrangement.

 

[bw5972]

"Everyone understands..."

Many a family relationship destroyed down the road in believing the above phrase to be absolute.

 

[omni550]

Clarify who is going to pay the monthly (or quarterly condo) fees.

omni

 

[Ready]

Something tells me that any attempt to sell the condo and evict the niece is going to result in major family drama, especially if the niece can't afford to find another place to live easily.

 

[brucethebroker]

Something tells me that any attempt to sell the condo and evict the niece is going to result in major family drama, especially if the niece can't afford to find another place to live easily.

+1.
Nice for the niece. But she will be starting a (perhaps) long ride down the road of living beyond her means, since her largest expense (housing) will never have to be paid at anywhere near market rates. Imagine her shock when the "gravy train" comes to an end, and she has to pay "real" rent. Lots of tears on the horizon.

Another advantage of a written agreement is to clarify that under no circumstances are "friends" to move in. Perhaps an immediate eviction if that clause is violated.

Get an approved lease (from an attorney or a Realtor) and go over the details. The HOA rules are important-be sure they are read and followed.

 

[Cayman]

You are smart to think proactively. I have experience with a similar situation. The "tenant" was a relative of the owner and paid only the electric bill, had no lease nor written agreement. Everyone in the family "knew" that the tenant-relative was to live there for a few months, definitely less than a year". The owner of the home was hospitalized, and then died.

The tenant-relative lived there rent free for just over 3 years. No one wanted to speak up (much) or create a family rift. Held up the estate settlement. Property values dropped prior to the sale of the home... it was a mess. I believe a legal document would have helped (lease or agreement - something of that nature that clarified the terms of the agreement and protected the broader interests of the family). Best of luck to you.

 

[Meadbh]

+1.
Nice for the niece. But she will be starting a (perhaps) long ride down the road of living beyond her means, since her largest expense (housing) will never have to be paid at anywhere near market rates. Imagine her shock when the "gravy train" comes to an end, and she has to pay "real" rent. Lots of tears on the horizon.

Another advantage of a written agreement is to clarify that under no circumstances are "friends" to move in. Perhaps an immediate eviction if that clause is violated.

Get an approved lease (from an attorney or a Realtor) and go over the details. The HOA rules are important-be sure they are read and followed.

This is extremely important. As a HOA board member, ask me how I know!

 

[Bamaman]

I assume your niece is socially stable.

I bought my 30 year old daughter a house, and she turned it into Party Central. We couldn't get her to move out when we decided to sell the house. She had full tenant rights and I had to have The Sheriff evict her.I

Since Mom's situation is permanent, I would put the house on the market. House prices remain high with current low interest rates.

We liquidated my mother's real estate while she was alive and it kept us from having to probate her will. That saved us substantially.

 

[HarveyS]

I agree with the idea to get it in writing. The woman is 29 years old - she should understand that is how business works - and even more important with family. Without a written agreement this is very likely to morph and tear apart relationships between you and your siblings.
I also support having her pay fair market rent - not just HOA, utilities, etc.. Again, she is 29 years old.
Sorry to hear what your Mom is going thru. Is she really able to decide this is what she wants?

 

[Ready2Go]

I also support having her pay fair market rent - not just HOA, utilities, etc.. Again, she is 29 years old.
Sorry to hear what your Mom is going thru. Is she really able to decide this is what she wants?

My niece...unfortunately...is very immature. She's under-employed an would have no chance of paying $1800/month.

Thanks. As far as my mom's cognitive ability, it's bad now. But, she has expressed this wish for years.

 

[Yarnstormer]

What if the niece has a child? I bet kicking her out then would cause all kinds of family drama.

 

[Sunset]

My niece...unfortunately...is very immature. She's under-employed an would have no chance of paying $1800/month.

Thanks. As far as my mom's cognitive ability, it's bad now. But, she has expressed this wish for years.

Oh my..... looks like the opportunity for a new interesting thread...

Or, perhaps convincing mother now is the time to sell the condo, before it goes down in value with rising interest rates. Besides avoiding the cost of probate, it will avoid the renting issues, and maybe mother will need to be spending a bunch of money for help while sister is sleeping/out/working. We know the niece won't be doing it.

 

[Winemaker]

Niece moves in to mom's condo. Niece soon has roommate. Something happens to niece. Unknown roommate has possession of condo, who do you serve eviction notice? HOA finds out unknown roommate in their condo building, very unhappy HOA. Penalties anyone?

Get a lease, and a co-signer with assets to cover major screw ups. My 2 cents.

 

[ivinsfan]

Is the niece moving into the condo the daughter of the sister who is taking in your Mother?

In that case, it's almost a tit for tat and might be one of the reasons it's happening, your sister wants her somewhat struggling daughter setup in a nice cheap place to live. It's a minefield... I suggest you start preparing mentally for the niece basically taking over the condo permanently or prepare for a very messy situation when your Mom is gone.

 

[Ready2Go]

Thanks for all of the input, everybody! Lots of good points and things to consider. At this point, I plan to go with a 12 month lease agreement...with lots of specific restrictions on roommates, pets, etc. Many more restrictions than if it had been with a stranger.