Millions of College Grads Live with their Parents
Detroit, Michigan (PRWEB) March 30, 2014
Recently, a client came to my office regarding their college student moving home after 5 years of schooling. Her student will graduate this May and has not yet found a job. The client, while excited for her daughter, wanted a written agreement between themselves, setting out the “ground rules” for their “new” living arrangements, as well as a written understanding of financial obligations henceforth.
At first, I thought it a bit strange that a parent would want to have a formal “housing” contract between themselves and their adult child moving back home, but after some research, one wonders why more parents don't pursue one.
According to a Pew Research Center analysis, its estimated that since 2012, more “Millennials” (ages 18-31) are living at home with their parents. Over 21 million adult children, a third with college degrees, live or have moved back home with Mom and Dad.
So when drafting this agreement, (and in light of my own experience of being a parent of two college students) I became even more vested in the client's task. What should this agreement look like? When record numbers of college graduates cannot fully support themselves in their chosen careers, parents should be legitimately concerned for their own extended financial well -being. It's estimated that having an adult child back home can cost between $7,000 to $19,000 a year. How should an adult son or daughter contribute to daily living expenses? Then consider the normal expectations of chores and responsibilities needed around the house.
Not surprisingly, I found that the best agreement for families to set limits and boundaries is found in the framework of a simple real estate rental lease. The most material lease terms and clauses should be sufficient to maintain a civil understanding between adults. They are:
1. Length of the agreement. Specify how long the living arrangement will last and when you expect your “grad” to move out. The longer they stay the harder it is for them to leave, so set limits, such as, “when you get this job...”
2. Rent Payment. How much will the monthly rent be and when is it due? Consider your child's percentage of expenses related to transportation, insurance, and food.
3. Utilities. How much will your son or daughter contribute to the total household utility bills? Consider water, gas electric, and cable.
4. Responsibilities. Not unlike with “real” tenants, what things should be done daily or weekly. Grocery shopping, cooking, laundry, yard work are to name but a few chores.
5. Hours of operation. When should guests and friends leave so as to preserve the “quiet enjoyment” of your home. Is there a “sleep over” policy?
6. Repairs. Just as in a “real lease,” what are the additional expenses that can be anticipated, and what will the contribution be in such an event.
Not all families may need a formalized living arrangement for their grown children at home, but for those who do, a simple residential real estate lease should be suitable. Remember, a signed written agreement is a legal and enforceable contract until challenged otherwise, so as parents, we should be much more flexible and understanding with our 'temporary' tenant at home.
About the Author: Since 1990, David Soble has represented lenders, loan servicers, consumers and business owners on residential and commercial real estate, finance and compliance issues. He has been involved in thousands of real estate transactions, being responsible for billions in real estate loan portfolios throughout his career. And while he may at times seem overly harsh, he has 24 years of real estate battle scars to support his tempered cynicism.