PLEASE HELP! - renting from a family member

gemmaloneill

Me and my partner are looking into renting his sisters house which she owns with her husband. We are looking to do this privately to save both parties having to pay massive agency fees and giving them the peace of mind that the tenants renting theproperty are looking after it.

I've scoured the internet and cant find any info on my kind of situation. Legally is this ok to do? Are there people we would need to notify on both our side and theres? And can we draw up some kind of legally binding document to give my partners sister the peace of mind in knowing we would pay the agreed amount monthly?

Please help! Neither party know where to start!:mad:

Thansk so much in advance! x

19lottie82

There is only one real difference when renting from family, which is if you ever have to claim housing benefit for that property, chances are it will be refused, as it will be viewed as a "contrived tenancy".

Everything else must be done by your SIL exactly as if she was renting to a non related tenant. Mainly, that if she is currently on a residential mortgage, she must be granted "consent to let" from her lender, otherwise she will be breaching the T&C's of her mortgage.

Other legalities inc a gas safety certificate, if applicable.

Werdnal

Whether this is a family arrangement or not, the tenants will be tenants and the landlords will be landlords.

If the property is mortgaged, they would need consent to let - this can sometimes cause problems as lenders don't like "family" arrangements. However, if the owners are letting it and taking rent, so not living there themselves, they will be in breach of their residential mortgage conditions.

Normal house insurance does not cover letting, so this also need to be changed.

LLs need to declare rental income for tax.

If tenants need to draw benefits to cover the rent, the family connection may also be an issue - Google "Contrived tenancy".

Other than this, you need to abide by all the rules and regs of letting and renting - Gas safety Cert, deposit protection etc. Also, draw up a proper legally binding tenancy agreement as if the tenants were complete strangers - never cut corners just because its "family" - many tales of woe abound of how it can all go wrong!

Much more here:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

tim123456789

gemmaloneill wrote: »

Me and my partner are looking into renting his sisters house which she owns with her husband. We are looking to do this privately to save both parties having to pay massive agency fees

whilst many will think that agency fees are poor value for money, calling them massive is a bit OTT.

tim

gemmaloneill

Thanks for your advice guys that really helpful - we've made a bit of headway with the info you've provided in mind

thesaint

Being related is irrelevant.

The landlord and tenant have the same rights and responsibilities as any other landlord tenant.

Get a standard AST from a stationer, and fill it out as a minimum.

AFK_Matrix

Or get your SIL to join a Landlord's Association so she can get help with renting and a good AST through them etc.