Updated July 11, 2022
A family member lease agreement allows a person related by blood or marriage to pay rent while living in the same household. The agreement allows both parties to live together while outlining their responsibilities and maintaining their rights as a landlord and a tenant. If the family member acting as the tenant violates any part of the lease, the acting landlord can give the same eviction notice in accordance with State law.
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How to Rent to a Family Member
This is a guide on how to rent a room in your home to a family member. If the family member acting as the tenant is renting an entire residence then the standard lease should be used.
Step 1 – Decide the Type of Lease
The parties have to decide which type of lease is going to be signed. If it is a lease with a start and end date then it will be fixed. If the lease is going to be on a short-term arrangement, or if it’s unknown when the family member will move-out, month-to-month tenancy is better.
Conclusion: If the family member moved back home because of a job loss or related, it’s best to select a month to month agreement.
Step 2 – Outline the Private and Common Areas
If the family member will be sharing a bedroom or have their own, it’s best to provide these details in the agreement. In addition, it should be stated all the rooms and areas the family member will have access (e.g. parking areas, balconies, etc.)
Step 3 – Outline the Responsibilities
Like in any roommate agreement, there are chores that items that must be stated to have the home in order. Such responsibilities include cleaning responsibilities, food/shopping arrangements, smoking/drinking rules, etc.
Step 4 – Negotiate the Rent
Commonly the largest payment in a lease is the monthly rent. Although, with the common occurrence of children moving back home with their parents rent being paid isn’t always the case. Often time the parent will forgo in exchange for being paid on the everyday expenses of the home.
Step 5 – Who Pays What
Payment of the utilities and services can be a disputed issue. Unless there is a separate meter for the family member’s unit there will have to be a percentage of the expenses to be paid. Even if an occupant of the home, for example, uses the laundry or air conditioning causing more usage of electricity.
Helpful Tip – An idea often used is to have the family member look at the average of the last 3 months and to pay the amount above the average.
Step 6 – Termination Rights
If the family member is looking for another job while living on the premises, it’s best to allow them to terminate the agreement at any time. Unless the landlord is making other long-term obligations that require the family member to stay, it’s best to allow them to leave at any time (commonly requires 30-day notice).
Step 7 – Sign and Move-In
After the agreement has been made it’s time for both family members, landlord and tenant, to sign the agreement. If payment is required at signing, such as a security deposit or 1st month’s rent, it’s required to be paid in order to get access to the property.
Common Questions
How to evict a family member?
- With a Lease – If the family member acting as the tenant does not pay rent or violates the agreement they are treated by the courts like any other tenant. Serve the noncompliant family member with an eviction notice and informing them their lease will be terminated unless they fix the issues.
- Without a Lease – The family member acting as the tenant is treated as a tenancy-at-will (month-to-month) meaning the person acting as the landlord will need to serve them a lease termination letter. The bad news is this commonly a 30-day notice.
Can Section 8 housing be rented to a family member?
Yes but ONLY IF the family member acting as the tenant qualifies as being disabled and the residential unit provided by the landlord is the only one available in the area.
Are there tax implications from renting to a family member?
No, all that is required is for the landlord accepting rent to treat the money as income and pay their share of local, state, and federal taxes.
Can you rent investment property to a family member?
Yes, as long as there are no financial obligations or liabilities related to renting to the family member it is allowed.
Sample
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How To Write
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Family Lease Declaration
(1) Document Date. Apply a specific date of reference to this document in the declaration statement provided.
Section 1. The Parties & Property
(2) Family Member. Document the full name of the Family Member who shall rent part or all of a property from the Landlord.
(3) Landlord. The Family Member who is leasing the space to the Party above and who shall charge rent in exchange shall be referred to as the Landlord.
Section 2. The Property
(4) Property Mailing Address. The official mailing address for the property the Landlord is renting to his or her family member should be documented to define the premises or property.
Section 3. Bedroom
(5) Rented Room Status. Indicate if the Family Member will rent a private bedroom or a shared bedroom from the Landlord as a result of this agreement by selecting the checkbox.
Section 4. Private Access
(6) Privacy Level. The Landlord and Family Member will need to agree on how much access the Family MemberTenant will be granted to the remainder of the premises or property. Indicate if the Family Member will be able to access the bathroom, a balcony, or other such areas of the property freely and with privacy by selecting these items from the list on display. Be advised that marking “Other” will not complete this option, since a description of the areas accessible to the Family Member will need to be reported as well (i.e. garage, roof, backyard, etc.).
Section 5. Shared Access
(7) Tenant Usage. Naturally, in addition to the areas that are reserved for the Family Member’s use, there will be sections of the property the Family Member should expect to share with the Landlord. All such areas of the property should be defined in this agreement by attending to the list provided. Here, too, you will be able to define property areas that are not on the list (so long as you mark the “Other” box to verify the area description you provided.
Section 6. Term Of Lease
(8) Fixed Lease Option. The Landlord and Family Member must decide on the length of time the commitment being made here should last. If both agree to preserve this lease for a given amount of time then, it would be considered a fixed lease and must have the start date and end date documented once this option is selected. Notice, this requires further definition in that once the termination date passes, this agreement can be set to either continue as a month-to-month or require the Family Member (Tenant) to vacate.
(9) Month-To-Month Lease. If the Landlord and Family Member prefer a monthly arrangement where it will automatically be renewed once a month until one or both terminate the agreement by notice, this must be established by selecting the second option, recording the first date when this agreement is effective, and dispensing the number of days notice that must be issued when one Party elects to terminate the lease. Be advised the number of days notice indicated must comply with the state laws where this property is located.
Section 7. Security Deposit
(10) Security Amount. In general, Landlords will seek some protection for their property through a security deposit. This amount of money will be submitted by the Tenant (Family Member) and held by the Landlord to cover any damages or violations the Tenant (or Family Member) is responsible to pay for. If the agreement naturally terminates without incident, this security deposit will be returned to the Tenant. Make sure you are up-to-date on the County and State requirements for how much may be held as a security deposit then document the amount the Landlord shall collect as a security deposit.
Section 8. Rent
(11) Expected Monthly Payment. The dollar amount the Family Member or Tenant must pay in exchange for the space being rented should be documented. Additionally, record the two-digit calendar day of the month when the Landlord must be in possession of the Family Member’s rent payment.
Section 9. Utilities And Service
(12) Utility Obligation. Additional expenses are often expected when renting a property. In the case of the utilities, a description of how much the Family Member will be obligated to pay on a monthly basis should be defined. If the Family Member will be expected to pay for utilities then, mark the appropriate checkbox and record either the percentage of the bill(s) the Family Member must pay or a flat dollar amount. This requires that a record of every utility this obligation applies to is produced
(13) Services. If the Family Member shall be obligated to pay for services relating to the property, then record the percentage or flat dollar amount of the expenses the Landlord will hold the Family Member responsible for and document each service that shall require such payment.
(14) Utility/Management Management. In some cases, the Family Member may be obligated to obtain his or her own utility account. If so, produce a list of all utilities the Family Member must put in his or her name.
(15) Payment Obligation. If the Family Member will be expected to pay the entire cost of a utility or service, then this agreement must reflect this fact. Report all such items that require full payment from the Tenant/Family Member.
Section 10. Termination
(16) Power To Terminate. The option to terminate this agreement prematurely and in good faith can be afforded to the Tenant provided he or she is up-to-date with the financial requirements of this agreement as well as pays for the prorated utilities/services leading up to the move-in date by selecting the first statement or this option may be restricted (thereby requiring compliance with the full term of the lease) by selecting the second checkbox statement.
Section 11. Other Agreements
(17) House Rules. In every living situation where a Landlord and Tenant share property, day-to-day living arrangements or agreements will need to be dealt with. A brief list will allow you to cover such topics as the cleaning responsibilities of the Family Member, food or shopping arrangements, when he or she should refrain from excessive noise (i.e. quiet time), parking arrangements, what property or household items may be shared, as well as rules on smoking, drinking, pets, guests, and privacy. Any conditions or arrangements the Landlord and Family Member have agreed should apply to this lease that are not in this list must be recorded in the area provided or, if more room is needed, compose an attachment with this information that is physically presented with this document and named here.
Section 12 Additional Terms And Conditions
(18) Provisions And Attachments. If there are any protocols, conditions, responsibilities, amenities, or responsibilities that both the Landlord and Family Member (Tenant) wish included in the agreement being developed then they should be directly reported to the contents. If more room is needed, all additions can be provided in the form of physically attached documents that are appropriately titled and referred to in the area provided.
Section 13 Governing Law
(19) Jurisdiction. Present the State that issues and enforces the laws governing this agreement and the behavior of the Landlord and Family Member on this property as Lessor and Lessee (respectively).
Section 14. Entire Agreement
(20) Landlord’s Commitment. This agreement will not be considered binding on the Landlord unless he or she reads the completed form and all attachments then provides his or her signature of acceptance.
(21) Printed Name And Date. In addition to the signature, the Landlord must also document the current date and print his or her name.
(22) Family Member’s Acknowledgment. The Family Member (named as the Tenant above) should only enter this agreement upon a thorough review of the completed article and its attachment. To show his or her intention to comply with the content of this agreement, the Family Member must provide his or her signature, signature date, and printed name.
