When It’s Family, Choose Your Tenants Wisely

Think before you let a family member stay at a house you rely on for rental income.
Think before you let a family member stay at a house you rely on for rental income. Photo credit: MariadaDesign/iStock/ Thinkstock

As summer rental season in the Hamptons moves into high gear with Fourth of July weekend, a question I was asked seems particularly timely.

“My Uncle Steve got divorced and asked if he could stay in our home in the Hamptons while he gets his life together again,” the question began. “His wife got exclusive occupancy of their house in the divorce and he really has no place to go. We typically rent our place every summer, and I’m worried that Uncle Steve will get really comfortable and will never leave. We need to be sure that we can get him out for the rental months. What should we do?”

The answer depends on two very important factors. First, do you really need the money from your summer rental? Second, is your Uncle Steve actually your uncle?

If you are counting on rental income to support your property, you cannot let Uncle Steve stay at your place, even for the weekend. If you need that money to pay your bills and Uncle Steve doesn’t leave, your act of letting him stay will jeopardize your livelihood. Remember that your creditors do not care about Uncle Steve. Be responsible first and take care of your obligations—Uncle Steve is not your creditors’ problem.

Now, if you don’t need the money but merely want the money (meaning that you don’t rely upon the funds to pay your bills), let’s discuss what may happen if Uncle Steve just won’t leave. For starters, just assume that Uncle Steve isn’t an uncle at all and is instead just a close family friend whom you call “uncle”—so he will be treated as an ordinary individual using your property. In that situation, what happens when a tenant/licensee just won’t leave?

First, do you have a written lease? If you do and you act promptly after the tenant holds over, you will have to file a petition in your local village/town court and get what is called a Warrant of Eviction in order to get him out by way of a court action called a summary proceeding. Then, you will have to wait until the sheriff is good and ready to pull him out by his ear, which in the end can take several months and cost a lot of money, including court fees, attorneys’ fees, sheriff fees and moving company fees to remove his personal belongings.

If you don’t act immediately with that petition, then you will have to mail him what is called a 30 Day Notice to Quit to first terminate his tenancy before you start with the petition, which will tack on at least an additional month to get him out. Failure to act quickly at the end of the term of a written rental agreement automatically converts that term rental into a month-to-month tenancy, which needs to be ended prior to starting the eviction proceeding. So, either way it will take a while.

On the other hand, if you are trying to evict a true family member and you resort to a summary proceeding, it will likely be dismissed by the court. Instead, you will end up in a prolonged action, called an Ejectment Proceeding in the Supreme Court. By the way, those months to get a non-family member out may become years in an Ejectment Proceeding, which is a much more complex and costly proceeding.

The reason why you will need to go the ejectment route is that you generally can’t evict a family member in a summary fashion. This is because a family member’s right to use the property stems from a true family relationship and not from mere permission to use the property—this is why you want to let Uncle Steve stay in your home in the first place, and courts know this fact. You can avoid this problem by getting a written lease, granting exclusive possession and collecting rent from Uncle Steve. As a result, it will become clear to the court that you are not just helping out a family member, but are instead renting him your property.

So, you can let him stay if you don’t need the money from the rental to pay your bills. However, it’s never easy to get a tenant to leave who doesn’t want to go, and it’s impermissible to simply lock him out. To mitigate your exposure, use a written lease and have him pay rent. Remember, no good deed goes unpunished.

Andrew M. Lieb, Esq., MPH, is the managing attorney of Lieb at Law P.C. He frequently writes about real estate in Dan’s Papers and is a contributing writer for Behind the Hedges: Inside Hamptons Real Estate.

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