As Power of Attorney for mom, can I create a rental agreement?

As POA you can do anything that you like with respect to the your mother's financial and contractual affairs as long as the terms of the document are not violated.
Keep in mind that renting creates rental income which technically requires reporting to the IRS and may create taxable income if there is a net gain after expenses.
Rather than take the adversarial route with your sister, it may make sense to simply state that it's time to make a "contribution to household expenses" since the stay has continued so long. If the contribution requested is less than fair market value rent perhaps they will be cooperative.
Whatever funds change hands, by the way, I would have them go to you rather than land in mom's account if possible.

Being one of 7 children and the only one caring for Mom for the past 5 years, I am all for the care giver getting some kind of compensation. That being said, if your sister and her family are caring for and helping mom, they should be able to get some form of compensation. If they are living off your mom and do not help her in any way, then you need to deal with the situation accordingly. Sounds like if your mom is in agreement with you, then she has an issue. I would talk to a lawyer for sure, about this before doing anything on your own. Make sure mom is there with you and that she is able to back you up. There will be problems and resentments no matter what you do in this situation, but make sure you cover yourself before moving ahead. Families can be the worst in these situations! Good luck!

Rockn' - this is sticky and I bet Sissy and her DH are the kind that always, always are at need financially. they don't understand $$ and never will. With those types, you have to hard-ball it, otherwise being nice is not understood.

My suggestion is to do 3 things;
1. You & mom agree on the plan. This is very important that she understands the plan and plays along with it.
2. You & mom go and look at places for her. She sounds like IL will work so go and look at 3 of those. Get prices. You are not going to move her but this is info to use for leverage with Sissy.
3. figure out what mom's full costs are on the house - everything, taxes, insuruance, utilities, repairs, yard & CH&AC maintenence company (not the worthless brother in law cutting grass as that won't happen). Then look at mom's big house items - her central heat & air or AC units, water heater, etc. Go on-line to Lowe's or Home Depot and get a replacement cost and this figure divided by 5 or 10 get's added into the annual costs of maintaining the house (this depends on the age of the current stuff, a 12 yr old water heater is almost dead while central unit is still OK.) An old lady using the water heater is nothing, a family using it is. So that's why those costs get figured in. Then divide all by 12 and add 25% and that should be a fair amount for rent. So if it's 8K a year in house costs, then they pay about 670 a month. That is super fair and probably much lower than having to pay rent and deposits elsewhere.

Then the choice is either they pay rent OR mom is going to move into one of the 3 IL places and the house will be sold. The only way mom stays at the house is if you pay rent. And here is the rental agreement and we need the both of you to sign it and it will be filed at the courthouse or with mom's attorney. They are probably the kind that have to have this forced upon them to realize that you all are serious, pay or leave. Good luck and remember mom has to be game for doing this and not let on that she won't be moving but is playing along with it.

Having all the paperwork takes away alot of the emotion for you and mom and you can be all calm and knowledgeable.

no you can do this yourself, my mom lives with me and i just did a 1 page document stating that she pays me 600 dollars a month for rent she signed it and i signed it and that's it.

It sounds as though there is more going on here than a simple signing of a lease. While you could simply download a lease, I would suggest that you meet with a lawyer who specializes elder law to make certain the lease covers all aspects of the situation. It is likely worth your minimal investment in order to have all doubt removed from this situation.

Rock & Rosie (read below) - yes a rental agreement you can do on your own. If you have a friend who is a Realtor, ask them for one from their firm as it will meet your state's wording.

But you need to think ahead. This goes for Rosie, too. If in the future, your parents needs change and if they need to go into a NH you need to think about how the NH will be paid. If you are generationally wealthy, no problem. But if they will need to apply for Medicaid, then their income and assets for the last 5 years will be reviewed. Rent is income and the $ should be going into either your mom's single bank account (in her name) or into a rental income account (this could be where all expenses on the property is paid from, like taxes & repairs). If mom's income from SS and any retirement is somewhat low, she can still rent the house out if she goes on Medicaid when she is in a NH later on (as long as her income is under 2,000.00 a month). But all the income she makes must be paid in full to the NH except for whatever is your states personal needs allowance (from $ 35 - 90 a month). So say mom get's 500 in SS and 700 in retirement, she can get 700 in rent as it all adds up to 1,900 and under $ 2,000.00 average income limit. So if you are planning on mom keeping the house forever, you really want to do whatever repairs, replacement stuff needed done now and before there is a NH in the near future. this way you can spend the $ as needed on the house.

Rosie - you have to be careful in paying yourself from parents money. This can be viewed as gifting and can incur a transfer penalty when mom goes to a NH and applies for Medicaid. The caregiving you do is considered to be done out of love and devotion and not an income producing situation for family. All the $ dad has paid you can be subject to a transfer penalty and you will be expected to private pay for his NH stay till the penalty period is paid. No NH will take anyone with an outstanding transfer penalty either without a significant upfront payment from family. You really should see an elder care attorney (and dad's $ is used to pay for this) to have them draw up a "personal services contract" from which you get paid from. This has to be all legal and above board, so you do pay taxes on the income but also adds into your SS kitty for your own retirement later on. A transfer penalty @ the NH stage, when it's viewed as gifting $$ within the family will likely need an attorney to represent the elder for the Medicaid appeal. So pay for good legal now or pay for the attorney later.

boy oh boy. $670 is a drop in the bucket. In the s.f. bay area a one room apt is 1,300 not including utilities...rethink the fee on the rent, of course I do not know what city/state you are in. Nice is never understood by many....stop being nice and turn this into a business affair I have a suspicion that despite the documentation, your sister will not pay the rent and they will default and you will end up going through eviction proceedings....i just have this feeling.

Why do you have Power of Attorney for your mother? The reason I ask is because I have it for my father because he cannot handle his affairs, business, etc anymore. This is due to his having 3 strokes and now Parkinsons. He lived with my family and I was his main caretaker. I could not afford to take care of him without compensation due to the fact that I quit my job to care for him. I am wondering if your sister and her family members care for your mom in any way. If so, they deserve to be compensated if need be. My siblings who are not caregivers in any way acted like I didn't deserve to have dad pay me for caring for him. However, if she can live alone and doesn't need their help then if she says for you to handle a rental agreement I guess you should.

rosie 123, I have DPOA because my sister and her family allegedly were taking my mom's money. Then, when dad died, they conveniently moved in with my mom because they lost their home in foreclosure. They were only going to be there for a few months. It has been over a year and they have lived in her home free. My mom feels now they should be helping her with expenses since they continue to live with her, but she is afraid to ask them. So I proposed that we either convict them or they start paying some rent. She agreed, but like I said, she wants me to handle it.

Wondering if your Mom is in good health? I have heard of children moving in and after a couple of years of caregiving they own the home. I would definately get a lawyer and have stated that they are not giving care to your mother. Some siblings have ulterior motives and get the house free when the parent passes, and you cant get them out, etc. As POA take your Mom with you and get this done right to avoid huge mess ups in the future. Good Luck