Free lease after closing (rental, insurance, eviction)

[ebruli]

Hello Everyone;
Here is our story; We recently made an offer to a house around lot value and the owner accepted. We are planing to tear down the house and build a new one. It it in Shady acres and we really like the lot.
When we visited the property we have notice the family lives in there has really poor financial and living conditions and we have decided to let them to stay 6 months for free since we still need to shop around for builders. House is nearly in tear down conditions and there is nothing valuable in there. The family has inherited years ago and has been living there such a long time.

2 page standard lease contract has 90 day provision and our both agent said we need to put $10 per day even tough we are not asking for it.
Than my husband said "it will show as a rental income in our income tax!"

So how can I let these people to stay for free? Any opinion?

thanks!

[cheryjohns]

Have you already told them it was free?

The reason I asked is that they need to save the money for a deposit on a rental - and my guess is they will not be able to do so. Rather than collect rent, you could collect "deposit" - and then give it back to them at move-out. Of course, you are going to give it back that day, no matter the condition of the house. This would actually help them out more, since they are not used to paying rent and will have a tough time accumulating the deposit and rent for later. They basically would be using you as a bank, until time to move. If you don't do this, I have a real strong feeling you will have to evict later because they won't have the money to move. That won't help either side.

If you have already told them they wouldn't be paying, make someone else the bad guy and tell them you were told that you have to charge.

[Lost_In_Translation]

Something about letting them stay there for free doesn't seem right legally. Consult a lawyer before you make any decisions. Kindness can come and bite you in the ass. The liability alone on letting someone live on your property (especially without a legal contract) is horrendous.

[EasilyAmused]

^^^
Liability. If they get hurt on your property they can and most likely will sue you.

[City Love]

Originally Posted by Lost_In_Translation

Something about letting them stay there for free doesn't seem right legally. Consult a lawyer before you make any decisions. Kindness can come and bite you in the ass. The liability alone on letting someone live on your property (especially without a legal contract) is horrendous.

Yes, I'd be very skeptical and would even advise against it.

If you have a tenant in place, free or not, you will have to carry insurance on the property in case something happens. If something does happen to them, they can sue you if you don't have insurance.

Highly recommend getting rid of them or getting insurance to let them stay free.

[ChocolateBabz]

What is the world coming to where you can't show human kindness without worrying about being sued - we should all collectively hang our heads in shame

[MNCold]

It's really sad that we're in such a ligitation society that an act of kindness is considered not wise.

ebruli - take extra precaution because it will protect your family but please don't let it deter you from offering help to someone when you can.


Questions for all: What kind of liability if you let the family stay without the lease? If they don't move out when you ask them to move after 6 months, can you call the police for trespassing as you have nevered agreed (on paper) to let them stay. Would it be easier and less costly that way than a lease conviction. Also, that way you don't have to carry liabiltiy insurance as a landlord. Can you just considered it as someone taking advantage of an empty house, similar to the homdless people who's taking advantage of forclosed house and live in there for free while the bank figoure things out?

[cheryjohns]

Originally Posted by MNCold

It's really sad that we're in such a ligitation society that an act of kindness is considered not wise.

ebruli - take extra precaution because it will protect your family but please don't let it deter you from offering help to someone when you can.


Questions for all: What kind of liability if you let the family stay without the lease? If they don't move out when you ask them to move after 6 months, can you call the police for trespassing as you have nevered agreed (on paper) to let them stay. Would it be easier and less costly that way than a lease conviction. Also, that way you don't have to carry liabiltiy insurance as a landlord. Can you just considered it as someone taking advantage of an empty house, similar to the homdless people who's taking advantage of forclosed house and live in there for free while the bank figoure things out?

I wasn't thinking earlier about the fact that, as a house to be torn down, the OP would not carry insurance on the house. CityLove is right, that opens up a liability if there were a fire, etc.

If the OP just pretended not to know they were there - and something happened - they could still sue and possibly prove that the OP did know.

What if they were just charged the amount of rent to cover the building insurance? The OP would have to do more tax paperwork, but it would look like a loss on paper.

Still doesn't cover the future problem - that when it's time for them to move, they won't have the money to do - and eviction would have to happen. All problems are avoided if no one is living on the property at the time of closing.

The OP sounds like a very nice person and it is a shame that so many things could come back to bite.

[crone]

If the house were not occupied, they still need liability insurance. What if a neighborhood kid wandered in and got hurt? Is it to remain vacant until the new house is decided upon? The taxes are as of January 1. If they tore it down the day they closed, would the taxes be reduced? Could the tenants stay on as caretakers? Everything signed up front as to the day they vacate. If they do not have enough sense to plan ahead to get into another home, they need more help than we can offer. Even if we had that jogging milk thief on our team.

[Poltracker]

Originally Posted by MNCold

If they don't move out when you ask them to move after 6 months, can you call the police for trespassing as you have nevered agreed (on paper) to let them stay.

No you can't. Like it or not, those folks are considered tenants and would have all the protection afforded them by state law. If a written lease does not exist, they are considered month to month (depends on when payments are due i.e. week to week). To get them out you would have to go through the eviction process.