Four Tips for Dealing with Applications from Emancipated Minors

Many site managers don't know how to handle applications from households headed by minors or including minor co-heads or spouses. By definition, a minor is an individual under the age of full legal responsibility. Therefore, a minor's signature on a lease is generally not legally binding. While HUD's Occupancy Handbook makes brief mention of minor household heads [Handbook 4350.3, par. 5-6(A)(2)], it provides no guidance on what managers should do to protect themselves.

To assist you in situations in which minors apply to live at your site, we'll provide some information on how to determine whether a minor applicant can be held legally responsible for lease obligations. And if the minor is allowed to apply, we'll tell you when you should include a minor's income as household income.

Basics of Leasing to Minors

Minors aren't usually considered legally responsible. This means that courts generally won't require minors to comply with their obligations under contracts or leases. From the courts' point of view, individuals must possess the requisite “legal capacity” to enter into a valid and binding contract. And contract law regards such legal capacity as the capability of understanding the nature and consequences of the transaction.

In most states, minors do not have the capacity to enter into contracts until they reach the age of majority, usually 18 years of age or older. However, this does not mean that minors may not make contracts at all. Rather, the law is designed to protect minors by discouraging other parties from entering into contracts with them. Accordingly, contracts with minors may or may not be binding, depending on the circumstances.

Typically, contracts with minors are “voidable” at the option of the minor, but binding on the adult. This generally means that minors can back out of their contracts with other parties, but the other parties are bound by those agreements. However, there are certain exceptions. Since certain transactions provide significant benefits to minors, the law considers those transactions to be binding on them. Typical exceptions to a minor's right to avoid his contract obligations include:

• Contracts for necessities such as food, lodging, and medical services; and

• Statutory exceptions including insurance contracts and student loans.

Most people would agree that housing is a necessity, but minors often evade lease responsibilities by claiming they were runaways when they signed the leases. Since they had the option of returning to the homes and support of their parents, housing wasn't a necessity for them. Many courts have dismissed lawsuits for back rent and damage to units when presented with this argument.

Courts also hold minors legally responsible if they're “emancipated.” Emancipated minors are minors who are legally treated the same as adults. Once emancipated, the minor may enter into any contract as an adult. The circumstances in which minors can become emancipated vary from state to state. Emancipated minors include those who are:

• Legally married;

• Serving in the armed forces; or

• Legally emancipated through the courts.

Tip #1: Obtain Written Policy from HUD Field Office or Contract Administrator

To protect yourself against the risks of leasing to minors, you should get a written statement from your local HUD field office or contract administrator on its position toward minor heads, co-heads, or spouses.

Unfortunately, individual field offices and contract administrators come down on both sides of this issue. Some tell managers to allow no minors to sign leases, while others tell them that they may not reject households simply because they're headed by emancipated minors. These potential contradictions make it all the more important to get the policy in writing in case different staffers later challenge your policy.

Be sure to cover all the bases with the field office or contract administrator. It's unlikely that your field office or contract administrator will require you to accept households headed by minors who aren't emancipated, so the key question is whether you may exclude emancipated minors. But you should also ask if you may deny an application when the household includes both an adult and a minor within the category of “head, co-head, and spouse.” These households also pose a significant risk to your bottom line since the adult head, co-head, or spouse could move out.

It's also important to note that excluding all households headed by minors isn't discriminatory, says attorney Kathelene Williams. Some managers mistakenly assume that the fair housing laws apply in this situation because these laws prohibit managers from discriminating against households that include minors. But this stems from the fair housing laws' prohibition on discrimination against “familial status” or families with children. Excluding households headed by minors is age discrimination at most. And the laws prohibiting age discrimination protect only older adults, says Williams.

Tip #2: Know Your State's Law on Emancipated Minors

To ensure that your leases are enforceable, familiarize yourself with your state's law on emancipated minors, says Williams. Confirm with your lawyer what the age of majority is in your state. Knowing your state's law is important even if you are fortunate enough to have a contract administrator or HUD field office that lets you deny applications of households with minor heads, co-heads, or spouses.

However, this may not be enough to protect you in all situations because every household that includes a minor can potentially become a household headed by a minor. For example, a household head may be sent to prison and a court may deem a 17-year-old minor in the household responsible enough to take care of the rest of the family and be declared an emancipated minor. In this case, you may need to get a copy of her emancipation order as proof that a lease signed by her would be enforceable.

Remember to verify that any minor who claims to be emancipated does, in fact, meet your state's legal requirements for emancipation. Get a copy of the emancipation order, or if your site is in a state where marriage alone is sufficient, get a copy of the marriage certificate.

Tip #3: Spell Out Policy in Resident Selection Plan

Put together a site policy on emancipated minors. This gives you an opportunity to educate your staff about your state's laws on emancipated minors. And it ensures consistency. If you accept one household headed by an emancipated minor who is otherwise eligible to live at your site, you should accept all eligible households headed by emancipated minors.

Doing so closes the door to potential lawsuits. Without a set policy, managers may forget how an application submitted by an emancipated minor was previously handled. As a result, if one applicant was rejected while another was allowed to apply and if the denied applicant was of a protected class, he might be inclined to sue on the basis of discrimination.

Tip #4: Count Emancipated Head's Income in Household Income

Be sure to include the income of minor heads, co-heads, or spouses in household income. This is an exception to HUD's usual policy that the earned income of household members under the age of 18 isn't counted in household income.

In some instances, households may include emancipated minors who aren't the head, co-head, or a spouse of either. In these cases, the ordinary rule applies. The earned income of dependent emancipated minors isn't counted in household income [Handbook 4350.3, par. 5#3].

Insider Source

Kathelene Williams, Esq.: Member, The Law Firm of Williams and Edelstein, P.C., 7742 Spalding Dr., Norcross, GA 30092; www.williams-edelstein.net.

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