Parents "renting" basement to daughter + family.. advice? (rentals, credit card, house)

[round4]

I smell a Skunk!! I would go to my sister and tell her to get her own place, this is utterly ridiclous, considering the circumstances, time for her to stand on her own two feet...when I read these type threads I'm glad I'm an only lonely.

[CarlitosBala]

I want to thank everyone for their replies, I now see things in a different way than I did yesterday when I made my first post. Below I have addressed everybody in a single post. Again, I really appreciate your opinions and the time you took to share your thoughts.

Originally Posted by MrRational

The idea is to make her UNCOMFORTABLE being there...
and by that self motivated to get out and on her own again asap.hth

You are entirely correct, and we have all been going about this thing the wrong way. I now realize that tough-love is exactly what they need. Thank you MrRational.

Originally Posted by Lacerta

It doesn't have to be fancy paperwork. You could probably say the necessary bits in 1 handwritten page..

Would a standard lease work in this case? Even though the basement is just a finished basement, there is no bathroom or kitchen in it. Can the argument be made on my sister's behalf about renting an "illegal apartment"?

Originally Posted by taraox

. I'd be concerned about them obtaining squater's rights or something, since they're living there indefinately without a written lease or rent agreement.

Damn. Yet another angle that hadn't even crossed my mind.

Originally Posted by taraox

Oh, and if it does get put in writing, don't keep the original copy at their home, where the sister/whoever else has access. Keep it at someone else's home, or with their lawyer or bank.

This is golden. I had not thought about this. I will personally store the lease at my residence.

Originally Posted by sware2cod

They'll probably never get her out of there. Your poor parents...trying to help.

You'll have to remember to try to get your parents out of the house for dinner/lunch when she moves in. They might want to get away from there more than now. They are going to lose their peace and quiet. It is gonna be hard on them.

The worst part is that my parents are near retirement, they live in a large home, in one of the best areas in the entire state. Their plan was to sell the house in a few years, get something more maintainable for both of them, and just enjoy the rest of their lives with the proceeds from the home.
They are really stressed out and unhappy about this whole arrangement, but I can't argue with the fact that "they just can't leave their daughter, son in law and niece on the street".
Also good tip on taking them out more often, they don't often go out since, despite all their hard work, the economy has taken a heavy toll on their finances.

Originally Posted by lovesMountains

The more they treat this as a business arrangement the better off everyone will be. PLEASE try to make your parents see this.

You are correct, there should be no other way than this. I'll do my best to make my parents realize it.

Originally Posted by KonaKat

Are there any children involved with this couple?

Yes, there is a lovely 3 year old, that we all love dearly and want the best for her. Regardless.. you want to hear the BEST part in this story??
My sister is actively trying to have another kid at the moment, despite their current situation. She says that, at 33, she is "drying up" and has to have another one asap.

Originally Posted by KonaKat

If they had fallen upon hard times, and had really tried but still needed this much help, it would be a different story. But if your rendition of the situation is correct, bailing them out won't help them.

Yes, my rendition is correct. These are a few of the things that were their undoing...

House was inherited and paid off. At the top of the housing bubble, sis took the ENTIRE equity out of the house.. every last cent ($340k). It was all gone within 4 years or so with actually NOTHING to show for it. The best part... their new mortgage was an ARM deal.
Between the $50k wedding... the $20k time-share in Vegas... the $10k of gym equipment for the house that was never actually used... the rest of the money went on fancy vacations, toys, gadgets, furniture and brand name junk.
On top of all that... there are also car loans, and a bundle in credit card balances as well.

As MrRational made me see.. what they now need is very tough love. They keep on getting bailed out time and time again and always fall on the same patterns. (They both have bankruptcies to their name due to credit card debt)

Originally Posted by ShaneSA

Why can't they get a cheap room or small apt.? If they can afford the basement, they can afford an apartment, even if you or your parents give them the deposit.

Terrible, terrible, credit-scores. Both of the have bankruptcies, no cash saved up, no assets, and a mountain of debt. And now this thing which is quickly giong from a fire-sale into a foreclosure.
I personally wouldn't even rent to them, neither me nor my parents are willing to be co-signers either, for obvious reasons.
Sadly, I imagine the only place they'd be able to get into would be in the worst part of the ghetto...

Originally Posted by round4

time for her to stand on her own two feet...

I couldn't possibly agree more.

[round4]

First Let me say that I am sorry you're having to deal with this deadbeat sister. Secondly, don't let her dry up your folks retirement and the other baby is simply a "magnet" for I cant do this or that...What a shame. <SMH>

[CarlitosBala]

Originally Posted by round4

First Let me say that I am sorry you're having to deal with this deadbeat sister. Secondly, don't let her dry up your folks retirement and the other baby is simply a "magnet" for I cant do this or that...What a shame. <SMH>

I'm trying to do my best to make sure they are not parasites to my parents finances and well-being. Good point on the second child being used as an excuse to not get things done. She also has used her first kid as a bargaining chip against my parents. However well meaning it was to make my parents stop smoking inside their own house, she did say that if they didn't stop, they'd never see their grand-child again. Good intentions, just brought about the wrong way.

[sware2cod]

Don't worry about squatters rights. That applies when someone lives there without permission from the owner.

I agree that the baby is going to be a great bargaining chip for the sister....how could you kick us out while pregnant/with an infant/with a toddler?

Likely your parents are only allowing all this now is because they worry about the 3YO being homeless. Maybe instead of your parents bringing the whole family in...they can offer to temporarily take care of the 3YO if the parents find themselves homeless. This way the 3YO has a roof over hear head.

if they sign any kind of lease, make it MONTH TO MONTH. This is where parents can give 30 days notice for them to move out. Do not sign a 1 year or 3 year lease. Then the parents will have to hire a lawyer to evict her if they want her out prior to the end of the lease.

As far as it being an illegal apartment...just call it renting the basement with use of kitchen and bathroom updstairs. Kind of like when someone rents a room in a house and shares the other facilities with others in the home.

Sounds like a bad situation. Your parents are really stepping in it and they are going to suffer greatly from all this. Sounds like the sister is passive aggresive. Does sister and her husband have jobs?

[CarlitosBala]

Originally Posted by sware2cod

Sounds like the sister is passive aggresive. Does sister and her husband have jobs?

Great information and insight in your entire post. Thank you.

Yes, the sister has a good job making good money ($60k/year). The husband is currently stay-at-home dad and full time student. They both more than have the means to live good lives, they just lack the financial responsibility and common sense to make it so.

Its the age old catch-22 of whether the husband watches the kid during the day, or he works part-time just to pay a day-care facility.

Originally Posted by sware2cod

Likely your parents are only allowing all this now is because they worry about the 3YO being homeless. Maybe instead of your parents bringing the whole family in...they can offer to temporarily take care of the 3YO if the parents find themselves homeless. This way the 3YO has a roof over hear head.

Neither party would ever consider this. In for a penny, in for a pound, as they say. Also, great point about a Month-to-Month lease. I was going to suggest a self-renovating anual lease. But Month-to-Month makes more sense.

[A Nonny Mouse]

$60K and they can't pay for their own apartment? I realize their credit is bad, but what about a private rental? Most people around here don't check credit for those as long as they get first/last/security.

[sware2cod]

There are rentals that accept folks with bad credit. You see them in the classifieds. Especially these days with foreclosures and such. They have the income to pay for an apartment or even a rental home or condo.

Maybe you can call around and help them find a rental that will take them with their bad credit. Surely the sister won't do this and will instead say they cannot find anything. With her income, they should find something. Sure, most places will not accept because of the credit - but there are places that will accept even if you tell them about the credit issue up front.

They could move into a long term hotel or motel(that has a kitchenette within the unit) and pay by the week or month. I read in the newspaper this is what some folks do when they have bad credit...so they have a place to live while they sort things out. Some places have good rates when by the month(much lower than their daily ratex30). Credit is not checked for these folks, since it is a hotel/motel.

Just sayin....they have options OTHER than moving into mom and dad's basement.

Thank goodness mom and dad's basement does not have a bathroom down there. they are going to get sick of going upstairs to use the bathroom. Maybe this will drive them to another place. Doubtful.

[round4]

I doubt it, the new pregnancy will kick in and she won't be able to work, or getup the stairs, this will most likeley be used as a guilt trip on parents...

I don't even know this chick and she gets my dander up!!

[SouthernBelleInUtah]

With a 3 y/o and no bathroom, pretty soon they will be living upstairs in one of the spare bedrooms. Then they will be cooking their food, telling your parents when they can watch TV, what channels, when they can use the kitchen, bathroom, etc. They will take over and your poor parents will be the boarders. Get a legal opinion on how to write the lease.