Whether it's wise to rent to friends or family is one question and the other is, do you insist on having some papers signed just in case? I've learned that some landlords make exceptions when it comes to dealing with family or friends they expect the agreement to be honored. They've known these people for a long time, haven't they? But friendships can end . . . sometimes acrimoniously. What then? If rent was owed, how will you make that "friend" pay it? Question: are there times when a gentleman's agreement is better than a legally binding lease or rental agreement?
We can all be gentleman and it's nice when people honor their word, but at the same time there are contracts for a reason and that simple reason is that people change their mind and if we don't have a contract we might be in trouble.
Always get everything in writing with everyone and make no assumptions about anything. People are selfish by nature, and you may someday find out that that good friend or close relative is greedy, dishonest, unrealistic, overly emotional, or whatever.
Always in writing. Always. No exceptions. I rented an apartment from a very close relative, we both trust each other 100% but why not make a quick lease agreement anyway? It's also necessary for a lot of legal stuff and just makes everything easier when you are officially and legally living in that place.
To answer your question.....no. There is never a time when having no legal paperwork is better than having it. There are no gentlemen left in today's business world.
Rental agreements, every single time. No excuses whatsoever, it is essential that you do this. Even if you trust your tenant 100%, you still need the legal protection which that contract offers you.
One thing i hate is mixing business with pleasure and by pleasure i mean {friends, family, acquaintances... the whole nine yards} when that happens its like reason runs off through the back door and am left with a dumb smile stuck on my face and a manipulative friend winking at me sly-ishly... i'd rather i have agreements with people i don't know so well... because then its business... my honest $0.02 .
Don't rent to friends or relatives, unless you want to eventually lose your friendship. Put everything in writing. The problem is friends and relatives will thing there is an exception to the rule and it will cause problems. Keep everything on a professional level and do not get overly friendly with people you are renting to. There might be a few exceptions to the rule, but I would not count on it.
I never enter into a gentleman's agreement when renting to a family member or friend. I tend to never went to anyone who was a family member or a friend because they tend to be in line that gets crossed because they like to question your relationship and please stay at a bar of doing the right thing and paying you when they're supposed to. You choose to rent your property to someone that you personally know I would still have a contract to cover yourself from a legal standpoint. simply giving someone a handshake going into a verbal contract hold up in some states but not all.
The only time a gentleman's agreement will be worth much is if you're dueling with flintlock pistols or telling your men not to shoot at the fine gentleman waving a banner and a sabre. In both of these instances, you'll need to be a time traveler. If it's a business deal, get it in writing or don't do it at all. If you do business with family, you can make a private agreement, but should know better than to expect them to stick to it 100%. There's nothing wrong with you if you want an agreement in writing, whether it's family or not. It'll save a lot of pain later down the line and it makes sure both parties know that they are accountable for their side of the deal.
