? Landlord insurnace or what?

sleeponit

We are buying a house for my daughter and her family to live in. We will be the legal owners. No rent involved. Basically we are giving her an interest free loan, paying us back every month. Buildings insurance bit of a grey area. She cannot get buildings cover as she has no financial interest in the property. Landlord cover seems more appropriate, however, as we are not taking rent this could be a problem come claim time. Telephoned a couple of providers, who were pretty clueless. Any advice gratefully received.


Edit. Apologies for spelling error in title. I cannot seem to be able to correct it.

HappyMJ

Are you paying cash for this house?

Why don't you just charge rent and set it all up properly?

You can take the rent and give it straight back if you want....you could charge way under the market value just enough to cover costs so you don't need to pay any income tax.

sleeponit

HappyMJ wrote: »

Are you paying cash for this house?

Why don't you just charge rent and set it all up properly?

You can take the rent and give it straight back if you want....you could charge way under the market value just enough to cover costs so you don't need to pay any income tax.

Thanks for reply, charging rent would make me liable for tax on it.
Sorry did not read your full post. So any amount of rent would class me as a landlord. Just worried that the tax man might come snooping.
Cash purchase.

HappyMJ

wellfan wrote: »

Thanks for reply, charging rent would make me liable for tax on it.

Not if you charge a token amount such as £10 a month and at the very minimum the gas safety certificate costs £120 per year = No profit.

I'd charge something reasonably sensible like £100 a month which should give you a small fund for fixing the property when needed. It's unlikely you'll have much tax to pay.

What's the aim here anyway? You're taking money monthly in exchange for living in the property. Are you going to gift the property to your daughter once she's made enough rent payments? Why don't you just gift her the money now and let her buy it in her own name?

sleeponit

HappyMJ wrote: »

Not if you charge a token amount such as £10 a month and at the very minimum the gas safety certificate costs £120 per year = No profit.

I'd charge something reasonably sensible like £100 a month which should give you a small fund for fixing the property when needed. It's unlikely you'll have much tax to pay.

What's the aim here anyway? You're taking money monthly in exchange for living in the property. Are you going to gift the property to your daughter once she's made enough rent payments? Why don't you just gift her the money now and let her buy it in her own name?

Too many worries attached to the gift. New partner involved, and we hope all goes well, but you never know what is around the corner. Been their before so 'once bitten' you know the rest. Her paying us back means it all goes back to her eventually when her mother and me are expired. Seems a great way of adding to her inheritance. She was paying almost £550 a month to rent a grotty property. She now gets to buy a much better, and larger house for a lower monthly loan repayment.

David_InsDef

Try a high street broker (but avoid the large chains like Swinton etc) - they should be able to explain your circumstances to one of their insurers and secure cover for you.

Your situation is not straightforward but nor is it particularly complex. It sounds like the companies you are contacting are call centres where the computer determines what's acceptable.

HappyMJ

wellfan wrote: »

Too many worries attached to the gift. New partner involved, and we hope all goes well, but you never know what is around the corner. Been their before so 'once bitten' you know the rest. Her paying us back means it all goes back to her eventually when her mother and me are expired. Seems a great way of adding to her inheritance. She was paying almost £550 a month to rent a grotty property. She now gets to buy a much better, and larger house for a lower monthly loan repayment.

In that case I'd set it up as a rented property with a 6 month assured shorthold tenancy and do it all properly. That is you as the owners will be fully responsible for it's maintenance and decoration. Don't allow them to pay for any work to be done on the property at all. If there's a problem you fix it but don't allow them to fix it. Even it's just a simple problem get someone else in.

Problem is the money she's giving you for the property can be claimed by the new partner. She's building up a fund which is an asset of their partnership. He'll have a claim on that asset so if you charge rent to them as a couple and charge a normal market rate of rent then he can't claim that money as no fund is being built up. Only once you and her mother expire as you say will be the property pass to her.

sleeponit

I have no problem with new partner getting back what he has contributed to, if heaven forbid anything should happen. There are several reasons why we have gone down the route of purchasing the property in our names, also as advised by our solicitor. All these responses regarding issues to do with rent, etc. are ones I have discussed before, with no clear resolution. Basically we want to do what is right in terms of ensuring the house is fully covered by buildings insurance. The problem is, is that it cannot be looked at in isolation, as this thread again highlights. Oh for a quiet life!!!

HappyMJ

wellfan wrote: »

I have no problem with new partner getting back what he has contributed to, if heaven forbid anything should happen. There are several reasons why we have gone down the route of purchasing the property in our names, also as advised by our solicitor. All these responses regarding issues to do with rent, etc. are ones I have discussed before, with no clear resolution. Basically we want to do what is right in terms of ensuring the house is fully covered by buildings insurance. The problem is, is that it cannot be looked at in isolation, as this thread again highlights. Oh for a quiet life!!!

You can easily get buildings insurance as a landlord.

sleeponit

Thanks again for replies. I am just going to go down the landlord insurance route. I spoke to a broker and he was very clear that I should have landlord insurance, as there are no alternative options.

Faith177

I would definitely contact a broker rather than just going for landlords. As it is your family living in the house I know a company I worked for would cover the buildings in the owners name if the person occupying met their criteria and then the person living in the house could take out their own contents