Letting friend live rent free – any advice?

Jetcutter

Hi all - this is my first post on the forum, and I'd appreciate any suggestions you might have.
A friend has sold his house and needs somewhere to live short-term whilst he finds a new place, and I have a house which is empty and for sale (no mortgage). I’ve offered to let him move into the house for free for a short term (up to 6 months, with him willing to move out with reasonable notice). The house will still be on the market.
My friend will pay the council tax (which is a big benefit to me) and pay utilities and insurance.
I don’t think this is an AST and he’ll be a permitted occupier. Does anyone have any tips – should we draw up a contract? If so, what should be in it?
Feels odd to be talking about contracts with a friend, but better safe than sorry.
Thanks

theartfullodger

Don't.

If no rent charged it cannot be (may not be, legally impossible to be..) an AST.

Allowing friends & relos to live in your property is a great way to fall out with friends & relos...

If it were me I'd agree to a boring old AST, with all the correct paperwork, and give the profit to charity (all on paper with proof).

Got permission to let from mortgage company?? Got a gas-safe certificate?? Got landlord insurance?? Go any idea of the legal ins-and-outs??



Cheers!

BitterAndTwisted

If he's sold his house and has not secured another property he's unlikely to be able to move out at a time convenient to you. Meanwhile he's living rent-free while you continue to be responsible for repairs, maintenance and all the other formal responsibilities of a landlord. And most likely you will not be able to secure a buyer while the property is occupied.

This sounds like a fast-track to completely ruining a relationship.

Set up a proper tenancy agreement at a cheap or reasonable rent for a defined period and resign yourself not being able to sell while he's in there. Once in, he could refuse all viewings in any case. Once in, he could decline to leave without you applying to court for possession, which could cost you a grand or more and take up to six months.

BE VERY WARY!

PasturesNew

Get a housesitter contract and pay him £1/month for housesitting.

ging84

the fact you have to ask about this says, don't ever give this 'friend' a key

I_have_spoken

Very high risk, for no obvious gain (maybe increasing security of house).

1) If it's for sale, then viewers will have questions about getting vacant possession and may be put off
2) Aggro over arranging viewings
3) Keeping the house spotless for viewings
4) Insurance if the place catches fire etc
5) The inevitable issues of him having a party, someone's bring weed, the bizzies turn up etc.

Kynthia

I can see the advantages and if you did it then I'd at least have in writing that officially he's paying no rent (say it's for the tax man which it will also be useful for should they ever come calling).
1) If you accept no rent at all then he's not a tenant and can be asked to leave with reasonable notice.
2) The council tax is paid for.
3) The property is safer not left empty.
4) Buildings insurance will not become invalid due to the property being occupied.
5) You get to help a friend out.


I won't go into the possible problems as others have mentioned them. So depending on how well you know your friend and trust him with your asset you make your choice.

Jetcutter

Thanks for all the replies.


They say that no good deed goes unpunished, but he's a good friend and I'm prepared to take a risk to do a good turn.


From the responses I can see that there are risks, and disadvantages - its really helpful to get your views.
I'm going to have a good look at the house sitter contracts - they look quite useful as they stipulate that a tenancy agreement isn't created.
In the (unlikely) event that I get an offer on the house (not a good market for selling here) then the purchaser's lawyers will probably need some reassurance about that.
Cheers

sandsni

Jetcutter wrote: »

the purchaser's lawyers
Cheers

Are you in the US? This is a UK-based website, so the rules may be slightly different if you're not in the UK.

fluffymuffy

We lived in a relative's empty house for a little time. One unexpected thing was that we were unable to get contents insurance, nor was the owner. There is not a category on any insurance company's form (we used a broker) that deals with not-owning and not-renting either.

For a friend? No. I would use the non-availability of insurance as an easy way to let them down gently and say sorry, but no.