Renting House

malkie

Good eveing MSE experts,

A bit of a long story but here we go.

My partner is looking to move into my house with me and we are thinking to either rent or sell her property. Here is where it gets intresting!!!!!!!

The mortage and title deeds are in her Parents name and she pays them the mortage amount every month. So if we were to rent this house out am I right in saying that her Parents would have to change the mortage and the insurance to rently type mortage and insurance and would her parents have to register as a land lord?

Next, Her parents are not really clued up on these sort of thing and would see it as a hassle if the tennant or leasing agent was phoning up moaning about stuff all the time. So can we put the person in charge as my partner and we could look after the property and the income from the property go to the parents?

Sorry for all the questions hope some body can help

Malkie

Annisele

G_M has a mammoth post with information for newbie landlords.

I think the short answer is - sell it. If your partner's parents don't want the hassle of being landlords, don't make them. They can certainly appoint you to deal with things on their behalf, but they can't contract out of their legal responsibilities.

malkie

Thanks for the reply, I think that is the road we are going to go down just thought I would do a quick search and see if we were doing the right thing.

Thanks again

G_M

1) your partners parents are already landlords - do they realise this? Your partner pays them rent (in the form of their mortgage payements) and in return she gets to live in their property. That is a tenancy. It may not be written down. It may be family. It may be informally arranged. But in law it is almost certainly an oral Contractual Monthly Periodic Assured Shorthold Tenancy (though to be sure we'd need a few more facts.)

So
* the insurance is probobly invalid (no tenants allowed in 'standard' insurance');
* there is mortgage breach if parents do not have BTL/CTL mortgage
* are parents declaring the payments they receive from partner to HMRC? Tax evasion!
* Capital Gains Tax - as this is not the parents primary residence, this will be a future liability
* annual gas safety certificate? Criminal offence if not!
* etc etc

2) If the property is let out (properly!) in the future, parents will STILL be landlords (see my link). They can, of course, appoint agents to manage the property. This can be a (paid) letting agency, or you and/or your partner. Up to them. But whichever they choose, as LLs they will still be ultimately responsible in law for all the liabilities.

There is only a need to 'register as landlords' if the property is in Scotland.

Annisele

G_M is right of course - sorry, I completely missed the fact that your partner's parents are already landlords!

Although your description of the place as your partner's property is interesting; depending on the exact circumstances it could be a nightmare working out who the beneficial owner of the place is.

ognum

Hope your partners parents are paying tax on their rental income!

theartfullodger

The fine for not being registered (malkie is in Aberdeen..) is now up to £50k..

G_M

theartfullodger wrote: »

The fine for not being registered (malkie is in Aberdeen..) is now up to £50k..

Thanks artful - I missed that.

(of course, it's where the property is that matters..... but a fair assumption)

RonLeroy

You can rent rooms in your house for cash for multiple tenants. If you have 3 bedrooms you can get about 80-100 pounds per room weekly(depends on location of the house, if it is London you can get 90-130 per room). Generally about 1200 pounds monthly. If you manage tenants by your self you don't need to pay charges to agency.

BitterAndTwisted

If you rent rooms to multiple tenants in a property you do not occupy you could be running an HMO. This brings about some very honourous responsibilities, regardless of the method the rent is received. All rent-payments should be declared to HMRC for tax-purposes. The penalties for non-declaration can be huge.

People who run unlicensed HMOs and take cash-payments from their tenants are not the kind of landlords we want in this country.

00ec25

RonLeroy wrote: »

You can rent rooms in your house for cash for multiple tenants. If you have 3 bedrooms .

all true, as are many other possible income levels depending on location.
I hope you are not suggesting that cash enables you to evade tax?

The OP is in Scotland - 3 rooms make it a House in Multiple Occupation (HMO) which, in Scotland, requires a formal licence from the council and expenditure on such things as mains powered fire alarms and fire doors

http://scotland.shelter.org.uk/get_advice/advice_topics/renting_rights/houses_in_multiple_occupation_hmos