Why your parents handed you a lease

Real estate, Family/Kids, Money, Relationships

Maybe you graduated from college but can’t land a job and are now stuck paying student loans. Or you have a job, but it doesn’t pay enough for you to live solo. Or you ended up having a “starter marriage” (and didn’t get a prenup), and now you’ve found yourself without a roommate, or a room. Thank goodness the Mom-and-Dad safety net is there to catch you. But what if you’re greeted with a lease when you move back in?

Even the warmest of welcomes might turn frosty at that point. But consider this: in this age of adult children living in their parents’ home—the most common living arrangement for millennials (today’s 18- to 34-year olds) according to Pew Research Center—parents have plenty of reasons for presenting their flesh and blood with a lease.

As de facto landlords of their adult children, parents face tough decisions. They might have thought they were done raising their son or daughter, but now find themselves with a not-so-empty nest. Don’t be surprised if your parents choose not to revert to the parent-child roles again, and prefer to function through the landlord-tenant roles instead.

“There are two reasons why a parent would enter a lease agreement with their Millennial adult child,” says William Aronin, attorney with the New York City law firm Perry & Aronin. “They are trying to teach their child responsibility or create obligations and structure for their child; or the parents need financial help and need to start charging rent.”

While this new aspect of your child-parents relationship might be unfamiliar, you just may discover that your parents’ decision to have you sign a lease ends up being the best thing for everybody.

Terms apply

“By having a lease, parents give adult children an incentive to earn a living so they can pay the rent,” says Paul S. Sian, attorney with the Finney Law Firm in Cincinnati, Ohio. Expect the lease terms to include any or all of the following:

  • Monthly rent rate and due date
  • Whether utilities are included in the rent and if they are pro-rated among all residents
  • Length of the lease (month-to-month, yearly, or otherwise)
  • Repair obligations
  • Restrictions about the number of guests, if any, and the length of time they can stay
  • Parking matters
  • Renter’s insurance obligation

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“If the agreement is really just about money, then fine—focus on the obligation to pay rent,” says Aronin. “However, if this will never work unless the Millennial keeps their area clean or unless the parent leaves the child alone about certain issues, then that literally needs to be spelled out.”

Putting rules in place

From who’s cleaning what to rules on the use of common spaces, setting boundaries avoids conflict and misunderstandings and provides everyone with peace of mind. You may have been prohibited from raiding the liquor cabinet when you were a teen, and now the same house rules apply, along with many others.

Parents who present their adult child with a lease have set guidelines about their residential relationship. “The official establishment of a lease allows there to be no confusion as to roles and responsibilities, whereas, without a lease, children may be more apt to think there are no rules they need to follow since there is nothing written down,” says Sian.

A room of one’s own

If you’re renting out the guest cottage, the pool house, or the mother-in-law suite with its own entrance, then your existences as child and parents could really be very separate.

“The lease should address subletting and assignment rights since, if silent, the parents can find that the child has moved out but assigned the lease to a friend or a stranger, which may not be desirable,” says Stuart Berg, real estate lawyer and partner with Kurzman Eisenberg Corbin & Lever, LLP in White Plains, NY.

A step in the right direction

If you can get past your surprise about being expected to sign a lease with the people who raised you, you’ll realize there are major benefits for you, too. “The lease gives the children the ability to develop a rental history,” says Sian. It can also, notes Berg, “help the child establish credit and allow the child to open up accounts with utility, cable, and other service providers.”

The consequences of a lease

If having a lease to live at home seems ridiculous, not having a lease is madness, at least for your parents. “Both sides need to honestly ask themselves what they are willing to do if the other side ‘breaches’ or fails to live up to their bargain,” says Aronin. Your parents might have a really difficult time evicting you if push came to shove, but a lease could support them legally if they really are willing to take you to court or kick you out for whatever reason.

“While an eviction can be done without a lease, by having a lease a court is better able to see the terms and conditions of occupancy and enforce those terms,” says Sian. “Without a lease, a court may give an adult child more time to leave.”

Protection for you, too

You’re definitely not getting the short end of the stick as a tenant. “A lease doesn’t only obligate the child, but the parent as well. Especially in New York City, landlords are under very real obligations to their renters,” says Aronin. The clearly delineated structure that comes along with a lease helps everyone get on the same page, as well as to understand where familial protection ends, and individual responsibility begins.