Relations living rent free in second house - any issues?
Discussion
I currently rent a house out via an agency. The g/f's daughter + boyfriend have decided to try living together, and we've agreed that they can move to my house early next year - rent free.
They will be responsible for household bills but will not pay any rent.
Apart from the fact that I might have to convince HMRC of this - I assume there are no other financial implications? I did an online search and didn't find anything.
Just to note - I'm not really looking for answers about whether I should charge them rent so that they gain financial awareness etc. - they already have that, and apart from the obvious loss of rent this solution works for all of us.
They will be responsible for household bills but will not pay any rent.
Apart from the fact that I might have to convince HMRC of this - I assume there are no other financial implications? I did an online search and didn't find anything.
Just to note - I'm not really looking for answers about whether I should charge them rent so that they gain financial awareness etc. - they already have that, and apart from the obvious loss of rent this solution works for all of us.
thekingisdead said:
I’d check your landlords insurance; some of them don’t let you rent to family (can make it difficult to evict)
I think you’d be ok - not technically renting and not technically family (not married / surname etc)
Thanks - hadn't thought about the landlord insurance so will keep that in mind.I think you’d be ok - not technically renting and not technically family (not married / surname etc)
They will be "step family" by then.
Percy Cushion said:
If you have a mortgage I’d check with the lender too
No mortgage, so that's not an issueMuzzer79 said:
What if you and your GF break up?
How will you get them out of your house?
If you don't want to charge rent, that's your lookout, but I would get a contract drawn up as if they were a normal tenant
We are getting married on Friday. If we "break up" - getting them out of my house would be the least of my problems.How will you get them out of your house?
If you don't want to charge rent, that's your lookout, but I would get a contract drawn up as if they were a normal tenant
There could be implications on mortgage affordability if you need a mortgage for your own residence. Although if you have no mortgage on the rental property, they will probably be minimal with most lenders.
They are probably removed enough to not be considered family. I would highly recommend you have a tenancy agreement in place, even with a peppercorn rent of £1 a month. Without a tenancy agreement if there was any disagreement, no tenancy will complicate your legal options.
100% get a tenancy agreement in place!
They are probably removed enough to not be considered family. I would highly recommend you have a tenancy agreement in place, even with a peppercorn rent of £1 a month. Without a tenancy agreement if there was any disagreement, no tenancy will complicate your legal options.
100% get a tenancy agreement in place!
CaiosH said:
There could be implications on mortgage affordability if you need a mortgage for your own residence. Although if you have no mortgage on the rental property, they will probably be minimal with most lenders.
They are probably removed enough to not be considered family. I would highly recommend you have a tenancy agreement in place, even with a peppercorn rent of £1 a month. Without a tenancy agreement if there was any disagreement, no tenancy will complicate your legal options.
100% get a tenancy agreement in place!
There are no issues with mortgage for our main residence.They are probably removed enough to not be considered family. I would highly recommend you have a tenancy agreement in place, even with a peppercorn rent of £1 a month. Without a tenancy agreement if there was any disagreement, no tenancy will complicate your legal options.
100% get a tenancy agreement in place!
Although I understand your point about a tenancy agreement, that brings additional complications with it. If it is "rented" - even for a nominal £1 a month - then it is equally subject to all of the rules that Labour will soon be bringing in - not least, having to be moved from EPC D to C which isn't going to happen.
davek_964 said:
Muzzer79 said:
What if you and your GF break up?
How will you get them out of your house?
If you don't want to charge rent, that's your lookout, but I would get a contract drawn up as if they were a normal tenant
We are getting married on Friday. If we "break up" - getting them out of my house would be the least of my problems.How will you get them out of your house?
If you don't want to charge rent, that's your lookout, but I would get a contract drawn up as if they were a normal tenant
Even if you don't break up, what if your step-daughter's BF trashes the place? What if they both don't pay their electricity/gas/council tax?
You may think it won't happen but there's been many people who have found out that it can and does.
I wouldn't do it without a tenancy agreement.
If they don't pay their council tax / electricity / gas bills, that would be between them and the business they didn't pay - regardless of whether I have a tenancy agreement.
But I will give it some thought - perhaps a tenancy agreement with zero / nominal rent makes sense. I have a few months to decide anyway.
But I will give it some thought - perhaps a tenancy agreement with zero / nominal rent makes sense. I have a few months to decide anyway.
This isn't a very cheery point but if you charge no rent you'll also be giving them a cash subsidy. That's because house prices will continue to rise with inflation and you'll eventually be charged 24% CGT on that price increase. i.e. If the value of a £100k house goes up by 10% while they're living there you'll get a £2,400 tax bill. Eventually.
Panamax said:
This isn't a very cheery point but if you charge no rent you'll also be giving them a cash subsidy. That's because house prices will continue to rise with inflation and you'll eventually be charged 24% CGT on that price increase. i.e. If the value of a £100k house goes up by 10% while they're living there you'll get a £2,400 tax bill. Eventually.
If it's a second home then he'll pay CGT on any gain anyway, whether it's rented out or not. He'll be giving them a cash subsidy simply because he's not charging them any rent.
I've got the mother in law living rent free in a house I own. Bought it around 15yrs ago when my wife 'convinced me' it would be a good idea so they could sell theirs and use the equity to have a good standard of living. FIL passed 2yrs ago but MIL is still going strong and basically maintains the house as if it were her own so all the maintenance and modernising work I get for free.
I remember when they were selling their own house explaining what was happening their solicitor got all windy over -risk of eviction etc. so if there's a risk of a family break-up then it could be a mess.
Buildings insurance raises an eyebrow when you try to explain it. Swinton get it, they'll still charge landlord rates but going through Topcashback you can get £95 back for landlord insurance at present.
I remember when they were selling their own house explaining what was happening their solicitor got all windy over -risk of eviction etc. so if there's a risk of a family break-up then it could be a mess.
Buildings insurance raises an eyebrow when you try to explain it. Swinton get it, they'll still charge landlord rates but going through Topcashback you can get £95 back for landlord insurance at present.
Edited by Armitage.Shanks on Monday 30th September 16:50
Think you need to speak to a lawyer.
If you create a tenancy, you create rights and responsibilities - gas certificate etc that you have to handle.
Also with all the talk about labour reforming s21 evictions, and introducing rent controls, you could find yourself stuck with a tennant living rent free in your house that you can't evict, while being responsible for it's upkeep.
If your soon to be step daughter spits with the bf, and he refuses to leave his rent free house, can you force him out?
If you create a tenancy, you create rights and responsibilities - gas certificate etc that you have to handle.
Also with all the talk about labour reforming s21 evictions, and introducing rent controls, you could find yourself stuck with a tennant living rent free in your house that you can't evict, while being responsible for it's upkeep.
If your soon to be step daughter spits with the bf, and he refuses to leave his rent free house, can you force him out?
So just thinking about this. Why not keep everything in your name, and let them pay you for the bills. That way you'll know straight away when they can't pay.
They still only pay for what they use, they can even see the bills for themselves.
They would effectively be guests in your house so don't have any rights. And they can be asked to leave if anything goes pear shaped. They live "rent free" and still only pay the bills.
They still only pay for what they use, they can even see the bills for themselves.
They would effectively be guests in your house so don't have any rights. And they can be asked to leave if anything goes pear shaped. They live "rent free" and still only pay the bills.
Gassing Station | Finance | Top of Page | What's New | My Stuff