Giving my friend a place to live

MrVW

Hi all,

I am a landlord and basically a friend of mine has come into some financial difficulties and had his house repossessed. He has two kids and his wife and no where to live. Hes been good friend of mine for a long time and I'd hate to see kids living in poor conditions so I offered him my flat rent free until he gets himself sorted out and can find somewhere more permanent. What I was wondering was whether I had to draw up any contract to reflect this arrangement?

I ask this because I am a relatively new to this whole business of being a landlord (my father passed away and I inherited the property) and I dont want to fall foul of the law.

Any help will be greatly appreciated

BitterAndTwisted

If you friends have been repo'd they should still be entitled to claim LHA (Local Housing Allowance) from their Local Authority, or even be able claim part of the rent if they are in work. This is calculated according to the size of the family rather than the size of the property. Have a look on the LA website to see what they might be able to claim.

I would try and dissuade you from letting this family move into your property without a formal lease agreement being drawn up even if you choose to only charge them a notional amount of rent and deposit. I would also try and persuade you in the strongest possible terms to join a landlords association and to ensure you understand all of your legal obligations. It can be an absolute minefield for the unwary. People in extraordinary circumstances can feel that they are compelled to behave in extraordinary ways even if their landlord is a personal friend.

maninthestreet

You may have trouble getting them to leave - why would they want to leave if they can stay living there for free???

MrVW

Thanks for your posts.

I appreciate the concern and will take it under consideration. However, I trust this guy, I've known him for a long time. I know trust can break down but this is something I am not worried about with him as we go way back.

I will definitely join up to a landlords association. But am I breaking the law with this arrangement?

Jowo_2

A local council is obliged to house the homeless - don't feel obligated to handover your inheritance for someone to live in out of sympathy. This forum sees lots of what I call 'pity' lets which often end badly as both parties don't understand their rights/responsibilities and the landlord/tenant relationship is much more complicated when there is a personal relationship at stake. If you don't feel comfortable renting to them because you plan to sell the property, for example, then get them to contact Shelter to understand their options. You could help them out in other ways, other than gift them your rental property.

I know it sounds mean but renting a property is a complex commercial relationship and renting to friends is often done on a casual informal basis which means disputes are more likely to happen. You plan to offer the property to them 'rent free' so there would be no incentive for them to find alternative accommodation, is there? Also, people with low/no income are generally entitled to LHA to pay for their housing which often means the tenants don't have to pay a penny towards their rent anyhow.

If you do want to rent out your property, you must be businesslike about it and do it properly, which includes an inventory, deposit, tenancy agreement and so forth.

As you are a novice or accidental landlord, its best that you learn about your full responsibilities as there is a lot of legislation/housing law to comply with in regards to tenants rights, landlords obligations (tax, health and safety) and so forth. Join a landlord association, buy a book on how to be a landlord and read the Landlordzone website to get an overview of what you should do.

For example, landlords who fail to provide a gas safety certificate can be prosecuted, those who don't protect the deposit in a tenancy deposit scheme can face a penalty of x3 the sum of the deposit, landlords who evict tenants the wrong way expose themselves to massive compensation claims.

If you are not comfortable about managing the property yourself and would prefer to have an agent in place as an intermediary, here's how to select a decent one as anyone can set themselves up as an agent, its unregulated.

http://www.landlordzone.co.uk/agents.htm