The Moneyist: ‘From the start, problems began’: My sister persuaded me to rent my condo to my niece at below-market price — then they both moved in

Dear Quentin,

About 10 years ago, I bought a condo as an investment property. Because I had heard the horror stories of people dealing with renters, I decided to offer to rent the two-bedroom, two-bathroom condo to my niece and nephew.

At the time, the rent was to be $1,200 a month, $600 a piece. Since both were working, and had been paying rent at their respective residences, I thought this would be a no brainer. 

As you may have already figured out, this agreement became an issue from day one. First, my nephew decided he was not going to move in. Next, when I informed my niece, who decided to move in alone, that the rent was going to be $1,200, she also decided not to move in, but didn’t bother to tell me. 

‘When my niece finished school and my sister finally landed a job, there was no attempt to pay any back rent.’

I would love to say that was the end of the story, but if it was, I would not be writing this letter.

About two weeks later, my niece’s mother — my sister — called to inform me that my niece had given notice to her landlord, and now did not have a place to move. She wanted to know if I would be willing to rent her the apartment for $1,000 a month.  

Although I had begun advertising the vacancy and was receiving many calls for $1,250 a month, I did not want to see my niece on the street, so I reluctantly agreed to rent it to her for $1,000 a month. 

I did not charge her first and last month’s rent, nor did I charge her a security deposit. What I did not know is that my sister was also planning to move in with her. 

Unpaid rent

From the start, problems began. Although they did not pay full rent or first and last, they began to demand new appliances and ask for work to be done on the place. 

After about two years in the condo, my niece decided to quit work and go to nursing school. My sister was also not working. During this time the rent, which was always late, was sometimes not paid at all.  

When my niece finished school and my sister finally landed a job, there was no attempt to pay any back rent. There was also no talk of adjusting the rent to the $1,200 a month I originally asked for. 

After talking to other family members, I decided to wait it out and not make waves since they both were talking about moving to another state. 

Fast forward eight years later, my niece finally moved to another state, but my sister decided at the last minute that she didn’t want to leave, and she wanted to remain in the condo. 

‘There has not been any movement due to COVID and other delays. I am at the end of my rope.’

Again, I reluctantly agreed to let her stay for one year at $1,200 a month. This was to allow my third sister a chance to build an accessory dwelling unit on her property so our sister could move out of my building and into the ADU.

As you probably guessed, almost a year and a half later, there has not been any movement due to COVID and other delays. I am at the end of my rope.  

Currently, I no longer have a relationship with my niece. My sister in the condo and I rarely speak to one another, even though the condo is only about a half mile away from my house. 

Since my niece left, my sister has been paying the $1,200 a month on time, but that is in large part since apartments/condos the size of mine in the area usually rent for anywhere from $1,900 to $1,200 a month. 

My sister wants to improve our relationship, but there is such a bad taste in my mouth due to how she and my niece have handled this rental agreement that I find it difficult to interact with her, and will continue to feel that way until she moves out. 

What do you suggest I do? 


Fed-up in California

Dear Fed-up in California,

You do not stand between your niece and the street. She is and was not your responsibility. It’s also not your job to babysit your sister.

Asking a family member to move into an apartment — above and beyond a stranger who signs a lease agreement, and pays the first and last month’s rent — will never be a good option. You know that now. Inevitably, the many years of entanglements and emotional ties will become leverage for a favor here and a month’s rent there. 

Another troubling issue hovering over your letter is the unwelcome and persistent intervention of family members. A family is a group of individuals who are brought up with the same value system, both explicitly and implicitly instilled in them since birth. Each person looks out for themselves, for each other and, yes, the family unit.

That sounds good in theory, but when you mix up real estate and money, unreasonable requests are made for “the family.” I have a deep archive of letters attesting to that. It was inevitable that your niece and sister would get away with a lot more than a tenant with whom you have a contract and no personal relationship.

‘Another troubling issue hovering over your letter is the unwelcome and persistent intervention of family members.’

You are responsible for this property and your future, and you were pushed to your limit. It took you 10 years to learn this lesson. Otherwise, you would have done something sooner. Your sister persuaded you to rent this apartment to your niece, and then moved in herself. Your family persuaded you to give your sister a break.

But let’s be clear: You allowed your sister to take advantage of you. Until you deal with that, it will keep happening. There is no point in acquiescing to your sister now unless you set the record straight. The back rent is a debt she should pay and/or be made aware that she should pay. You cannot build trust on an unpaid debt.

California’s COVID eviction moratorium has been extended until Sept. 30. After that, give her notice. Don’t worry about risking her disapproval or about the family intervening so they can tell you what they think you should do. If your family had your best interests at heart, they would allow you to make your own choices.

‘You allowed your family to take advantage of you. Until you deal with that, it will keep happening.’

The time has come to put your interests first. It’s your life and your apartment. No one else should have a casting vote in who you choose to rent to, and why. I’m not asking you to cut ties with your sister or your family, but the time has come to cut all ties between your family, and your finances and real estate.

Stand up to your family and, the next time they ask you to do something that makes you uncomfortable, listen to those feelings and act upon them. The best part about this lesson? It transfers to all parts of your life: work, friends, relationships — it works for everyone from the pushy car salesman to salary negotiations at work. 

It’s not your sister or niece who needs to change. Their personal morals, exploitative natures and lack of accountability are none of your business. They may or may not pay your unpaid rent. Without a rental agreement, it will be difficult and expensive to recoup. I’m more concerned with the changes you make in and for yourself.

What will you accept from now on? When will you start laying down boundaries? Start flexing those muscles. It gets easier with time.

Also read: I want to take a life-insurance policy out on my husband. He says ‘hell will freeze over’ before he’s worth more dead than alive

You can email The Moneyist with any financial and ethical questions related to coronavirus at [email protected], and follow Quentin Fottrell on Twitter.

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