Emancipated Minors and the Determination of Income on Affordable Housing Properties

The determination of income for affordable housing developments (e.g., HUD/Rural Development/ LIHTC) depends on whether a household member is an “adult” or a “dependent,” as defined by HUD regulation. The definition of these terms is found in HUD Handbook 4350.3 and is fairly straightforward.

  • A person is considered an adult if he or she is:
    • 18 or older and not disabled or a full-time student; or
    • An “emancipated minor.”

Property managers often struggle with how to define an “emancipated minor.” This article provides guidance on how to determine whether a person under the age of 18 is an emancipated minor. However, this article does not provide legal advice, and since emancipation of minors is a state-law issue, owners and managers should rely on local counsel for legal guidance.

What is an “Emancipated Minor?”

An emancipated minor is a person under the age of 18 (usually) who is legally deemed an adult under state law.

In most states, individuals may not enter into contracts until they reach the age of majority (usually 18). However, there are circumstances under which minors may enter into contracts – even if they are not emancipated. The law is designed to protect children (minors) by preventing adults from entering into contracts with them. This means that a contract with a minor may or may not be binding, depending on the circumstances.

In order to legally be bound by an agreement, the individuals who enter into the agreement must possess the capacity to form the proper intent to meet the terms of the agreement. Two aspects of “capacity” are recognized: (1) the mental capacity to form the intent to commit an act; and (2) the maturity, or the roughly objective measure of the ability to form a legal intent. It is maintained that when a child reaches a certain age [normally 18], his or her capacity to form the proper intent matures – thus they have reached the age of “majority.” At this point, a person can be held accountable for his or her actions. In some states, the age of majority is 19 (Alabama and Nebraska) and in Mississippi is it 21.

Some states permit minors who are living apart from their parents and supporting themselves to be emancipated. This means that the minor may be treated as an adult for legal purposes. The minimum age for majority (emancipation) is sometimes set out in state statute but is frequently determined by common law.

In general, contracts with minors are “voidable” at the option of the minor but are binding on the adult. In other words, minors may back out of an agreement with an adult, but not vice versa. This is based on the legal premise that while adults are capable of understanding the requirements of entering into a contract, children are not – or at least may not be. However, even here there are exceptions. E.g., if a transaction provides significant benefits to a minor, the transaction may be binding on the minor. Typical exceptions to a minor’s right to void a contract include:

  • Contracts for necessities such as food, lodging, and medical services; and
  • Statutory exceptions including insurance and student loans.

These exceptions seem to infer that a minor cannot avoid complying with a residential lease. However, minors often avoid lease responsibilities by claiming that they were runaways when they signed the lease. In these cases, since the child could return home to their families, the housing was not a “necessity,” – thus voiding the requirement that the contract be for necessary services. This argument has led to many courts dismissing landlord claims against minors.

However, emancipated minors are almost always found legally responsible for contracts they enter into. Emancipation is a state law issue, but emancipated minors always include:

  1. Legally married minors;
  2. Minors in the military; and
  3. Court emancipated minors.

Emancipation Through Marriage

In certain states (e.g., Pennsylvania), if a child marries prior to age 18, that child is automatically emancipated – i.e., specific court permission is not required.

Emancipation Through the Military

This type of emancipation is applicable only for 17-year olds, since this is the minimum age for joining the military. This also requires the permission of a parent or legal guardian.

Emancipation Through Court Order

This option is not available in all states (e.g., Delaware and Maryland). In states where court ordered emancipation is permitted, it is often restricted to minors age 16 and above. However, it is lower in some states, such as California where minors as young as age 14 may become emancipated (this may well be related to child-actors).

Ultimately, entering into leases with non-emancipated minors is strongly discouraged. Landlords may find that it is difficult (if not impossible) to enforce such leases. Also, keep in mind that all income of emancipated minors should be counted – both earned and unearned – as would be the case with any adult.