Can a 17-Year-Old Sign a Lease?
Question 1
Can I allow a 17-year-old sign a lease?
Answer 1
In general, a person who can write an X can sign a lease agreement or any other type of contract. However, a person who is less than the age of maturity under the law of the particular state or who does not have the mental capacity as defined by statutes of that state cannot be held contractually liable. Most states define legal maturity as age 18. A contract executed by a minor would in general be considered invalid.
An exception to this statement is that a legally “emancipated minor” can be legally bound when signing a contract. All states have laws dealing with the “emancipation” of minors; laws that specify when and under what conditions children become independent of their parents for important legal purposes.
Approximately half of the states regulate emancipation by statutes specifically designed for that purpose. These statutes may specify the conditions required or the procedures for seeking emancipation. Statutes vary considerably from state to state, but under common law most states allow for the possibility of court-reviewed emancipation. No fixed age of emancipation exists, yet a minor is presumed to become emancipated upon reaching the age of majority. In most states, the age of majority is 18.
If a state does not have a specific emancipation statute or even a procedural rule, the court may act as the primary arbiter of cases involving a minor’s claim to emancipated legal status. Emancipation might also be determined by the appropriate court when a case doesn’t exactly meet the requirements of the statute.
There are possible issues related to a non-emancipated minor signing a contract, some depending on the state or on the judge.
A non-emancipated minor signing a lease along with one or more non-minors should not affect the ability to enforce the lease against the non-minors.
A guarantee agreement by a non-minor for a lease executed only by a non-emancipated minor may not be enforceable against the guarantor because a judge may rule that the basic non-validity of the lease cannot be overcome by having a guarantor.
These and other specific issues should be discussed with a competent attorney who is knowledgeable and experienced regarding emancipated minor law of the particular state.
Question 2
My latest insurance renewal statement is showing the replacement value at being substantially higher than the market value, resulting in a significantly higher premium than I like. Can I reduce the coverage amount to something closer to market value?
Answer 2
In general, a person can obtain whatever coverage amount is desired subject to mortgage lender requirements. However, insuring below replacement cost value can create issues, some of which greatly increase financial risk. I’ll discuss some of the issues.
It is important to understand the various types of value as related to insurance. It is particularly important to understand that replacement cost of a property is not:
- The property’s current market value.
- The purchase cost of the land and the cost of constructing the existing improvements on that land.
- The original or subsequent amount of the loan secured by the property.
Replacement cost coverage is exactly what the words say. It is an amount of money that will cover the cost of replacing the exact structure if it is totally destroyed or rendered totally unusable and requiring demolition. Most policies allow for some small amount of under insuring to take into account some changes in construction labor and materials costs during the current policy term.
Insurance policies provide that companies will pay the insured for losses in one of two ways.
One way is the actual cash value of damaged or destroyed property which is the cost of replacing property less physical depreciation (depreciation is the decrease in property value due to age or wear and tear). This value can be substantially less than the cost of replacement.
The other way is replacement cost which is the amount it would take to replace, rebuild or repair damaged or destroyed property with materials of like kind and quality without deducting for physical depreciation.
An owner can obtain replacement cost values from a competent professional or depend on the insurer to provide the information.
It is important to understand that the replacement cost of your property might be significantly greater than that of a similar property in the same area because of:
- Upgraded kitchens or bathrooms, including flooring, cabinets, countertops, or appliances/fixtures.
- Additional rooms or living spaces, finished basement, or additional unfinished spaces.
- Extended garages (larger pickup or longer boat), more garage stalls.
- More exterior parking or storage space.
- Custom windows, doors, moldings, alcoves, or arches.
- Special features such as a pool or spa, security systems, or
- Different types of landscaping.
- Recent remodeling that updates the property to more current wants and needs.
- Other unique features.
Furthermore, lenders will require coverage for a number of different hazards, including at least fire and, in some locations flood and/or earthquake coverages. Failure to maintain required coverages is a violation of the loan agreement, and may result in various penalties, including calling the loan all due and payable. At the very least, a bank will place “forced insurance” on the property that may cost the property owner significantly more than for acceptable policies available elsewhere.
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Question 3
A tenant gave notice by phone 9/25/2013 that everything would be moved out on 9/29/2013. He dropped off the keys at my office, but there is still furniture and other items in the unit. I tried to contact them by phone and left messages several times but they have not responded. When can I dispose of the property that was left?
Answer 3
When you can remove personal property left by the tenant and what you can or must do with the property depends on the intent of the tenant, perhaps the clauses in your lease agreement, and the specific laws of your particular state.
Obvious trash or garbage that no one could possibly want to reclaim can certainly be disposed of without causing any problems. However when certain personal effects or items of even small value are left behind, the landlord faces a dilemma. The tenant may or may not have deliberately left those items for discard. Perhaps the tenant ran out of time to pack all personal belongings or did not have enough packing materials or room in the trailer or truck to take care of every item but intends to come back for the remaining property. The landlord must be cautious regarding the disposal of tenant personal property.
It is that a tenant, who appeared to have moved out, to claim that his personal property left on the property had not been abandoned and he planned on returning for it. As might be expected, the value of what disappeared is usually claimed to be quite high. That is, pieces of junk become valuable antiques.
In many states, the landlord should not be in a hurry to donate, sell or otherwise dispose of any items because the states have certain requirements regarding the handling of abandoned property.
At one extreme, a state does not have a specific law regarding abandoned property. At the other extreme, a state has a statute spelling out detailed procedures for dealing with abandoned property that must be followed even when the lease has expired, all personal property except for a few items has been removed, and the tenant is almost certainly no longer occupying the premises. These procedures often include the requirement of putting the belongings in secure storage, providing notices to the tenant in accordance with that state’s law, holding a public sale of the abandoned property, and providing an accounting of the sale proceeds to the tenant, along with giving the tenant any funds in excess of what the tenant owed the landlord for rent and damages.
The state law may stipulate procedures on how to notify the tenant and how much time the tenant may have to reclaim the property. Items may need to be stored until requirements have been met. The law may also have different rules for different situations based on the reason for the tenant’s departure. For example, did the tenant plan a voluntary move-out, were there eviction proceedings, or did the tenant abandon the rental unit with no notice leaving everything behind? Care should be taken to protect against tenant claims of destruction or theft, including photos and using a third party to document items and the condition of those items that were left behind.
If a tenant leaves and also owes the landlord money, the landlord may think that he is entitled to take or sell whatever property of value that was left on the premises and not worry about finding the tenant. Even with a court order for judgment for money damages, this action might put the landlord at risk.
Some states do allow a landlord to keep or sell abandoned property if the tenant owes the landlord money. This is known as an automatic lien on the tenant’s possessions. The landlord should keep in mind that he may be seizing possessions that may not be paid for and the merchant for those items has a superior lien ahead of any lien interest the landlord may have.
There may be state requirements that the landlord post legal notices (publish) in local newspapers stating his intentions to sell or dispose of items abandoned by the tenant.
Also, certain items necessary for basic living or employment may be exempt from automatic liens. In addition to state statutes, there may be case law that requires certain other procedures. The landlord should not rely solely on lien statutes for information on how to handle abandoned property.
In order to reduce the uncertainly regarding items left on the premises in spite of the above discussion, it is of benefit to include a lease clause stating that any items left on the premises beyond the date of termination of tenancy shall be considered abandoned and may be disposed of as the landlord sees fit without contact with the tenant. Abandoned property laws of many states might have priority over such lease clauses, but such clauses can still have value before some judges. Even if that isn’t certain, the clauses will likely discourage tenants from pursuing the matter to begin with.
In most cases, if a landlord is knowledgeable about the abandoned property law of his/her state a landlord can reasonably decide that the tenant intended to abandoned the items and can dispose of the property as he/she deems fit. However, under certain circumstances the landlord should consider consulting with a competent attorney who is knowledgeable and experienced in the particular subjects of possession and/or abandoned property laws before attempting any removal of the tenant’s personal property.