Retired parents renting their house from me and cannot afford to pay

AnotherJoe

6 Let out the property and use the full market value rent to pay for the mortgage plus a smaller property / flat rental for them.

Should they need care, sell it and use the money for that.

7. do not get another job and be at home even less then now helping less with the children. This will only annoy your wife more than she has already has a right to be annoyed already since she was right about what to do.

You said you "dont want them to lose it" but do you really mean "you want them to continue living there"? Since they have lost it.Its yours now.

G_M

luvchocolate wrote: »

I am really surprised your mortgage lender allowed you to rent to family, they usually make you jump through hoops and need to show them you can pay this mortgage if the family member do not.
I believe its a regulated buy to let mortgage you should have.

My guess is that OP has not infomed the mortgage lender that he is letting to family.

He has also probobly either ignored, or not read, his BTL mortgage contract which will almost certainly prohibit letting to family.

Remember - he's an 'unofficial landlord'!

urbanhim

luvchocolate wrote: »

I am really surprised your mortgage lender allowed you to rent to family, they usually make you jump through hoops and need to show them you can pay this mortgage if the family member do not.
I believe its a regulated buy to let mortgage you should have.

I'm not actually renting to family, i've bought their house and they live in it rent free, my dad chooses to give me £200 to help with £700 mortgage, which of coure he can no longer do hence my post here.

I had to sign various forms, produce all sorts of documentation in order to get a mortgage on a house that I was not occupying.

I'm not doing this to make any money either, when I sell the house I do not care if I have to pay any tax etc, I didnt do this for free care either, I will look to pay for their care from the sale of the house.

This is not some sort of money spinning scam i'm trying to do here, its a burden believe it or not. I just want my parents to live happily ever after in the home thay they have been in for the past 40 years.

I do not want, nor expect to make any money from this.

Bluebirdman_of_Alcathays

urbanhim wrote: »

Thank you, firstly, I dont declare the income as its not rent that they pay me, I pay £700 mortgage on the property and my dad gives me £200 to help. There is no tenancy agreement, I have of course had to sign various forms to the mortgage lender declaring the current situation.

I am of course a landlord, but effectively they are living there for free as I will no longer be receiving that £200.

Secondly, I dont want to breaking the law so I will look to address this and get legal advice on what I need to do.

And lastly, I dont care if I have to pay CGT, i'm not doing this to make money. I'm doing it so they do not lose their house. If and when I sell it, I do not care if I have to a CGT, I will be happy to do so. Also, I do not expect my parents to get free care either, if and when they need a care home I will pay for this for as long as I can with whatever money I can get from the sale of the house they are currently occupying.

I'll give you some legal advice for free - the money you are receiving is rent. HMRC will not look at it any other way. I think there is a way out of this mess, but it will help everyone if you remove the wool from over your eyes!


In your shoes I would sell the house and get the folks into suitable rented accommodation, paid for by the proceeds of sale. There is around £100k of equity that could be raised by selling? Give it to them and let them handle their own affairs.

xylophone

Thank you, firstly, I dont declare the income as its not rent that they pay me,

In which case your cash strapped parents are making you a gift that they can ill afford - I can't see the local council being too cooperative if your parents requested housing benefit so that they could continue to make you a present.

Mojisola

urbanhim wrote: »

I just want my parents to live happily ever after in the home thay they have been in for the past 40 years.

But they couldn't afford to and despite your scheme, you can't afford to pay for it either.

They should have sold the house at the time and gone into a rental with a nice lump sum to make their lives pleasant.

This grand scheme is going to end up much more trouble than a once-off big upheaval would have been.

Believe the other posters - you are a landlord and are breaking the law by not complying with the LL regulations and you owe tax for the last five years.

AnotherJoe

urbanhim wrote: »

I'm not actually renting to family, i've bought their house and they live in it rent free, my dad chooses to give me £200 to help with £700 mortgage, which of course he can no longer do hence my post here. HMRC will regard that as rent. Otherwise the scams that could be played from such a scheme are endless. But look at it another way, if its not rent, they arent due any housing benefit either are they?

I had to sign various forms, produce all sorts of documentation in order to get a mortgage on a house that I was not occupying.

I'm not doing this to make any money either, when I sell the house I do not care if I have to pay any tax etc, I didnt do this for free care either, I will look to pay for their care from the sale of the house.

This is not some sort of money spinning scam i'm trying to do here, its a burden believe it or not. I just want my parents to live happily ever after in the home thay they have been in for the past 40 years. We'd all like everyone to live happy ever after but in this case it seems problematic.

Have you had an assessment of them by social services? If they cant even afford £200 a month seems to me there is something very wrong. Have you checked your parents finances? Are they claiming everything thats due to them?

I do not want, nor expect to make any money from this.

Doesn't matter. No one says you are. But even if you make a loss you still need to declare income (the £200 you were getting) to HMRC.

urbanhim

G_M wrote: »

My guess is that OP has not infomed the mortgage lender that he is letting to family.

He has also probobly either ignored, or not read, his BTL mortgage contract which will almost certainly prohibit letting to family.

Remember - he's an 'unofficial landlord'!

Thanks for making these assumptions about me, awfully kind when I was on here to ask for some advice.

When I said I am not an official landlord, what I mean is that I do not charge my parents rent. I pay the £700 mortgage and they live there rent free, my dad gave me £200 a month to help towards this.

For me to get the mortgage, I had to declare the exact situation, my mortgage lender knows that I own the property but my parents live there rent free. There was copious amounts of letters and forms I had to sign for this to happen.

My title of this thread is slightly misleading, but it was the only thing I could think of to get the answers I was looking for, as this was a route I was looking to take in terms of charging them real rent and getting some sort of help with it.

I know I am of course a landlord, in that I own the property but someone else lives there, but when I said "Unofficial" what I meant was i'm not charging them to live there.

In terms of my mortgage, I know exactly what mortgage I have and so do they. So I have not "ignored, or not read my BTL mortgage contract". My mortgage provider and I know the situation exactly, the first thing I mentioned when getting a mortgage was "i'm buying my parents house but they will continue to live there"

elsien

On a slightly different note, if they're struggling to pay you anything have you sat down with them to look at all their income and outgoings and to see where any savings can be made?
They may be resistant to this, but if you need the money and they need the roof over their heads then needs must before it all goes pearshaped.

AdrianC

urbanhim wrote: »

When I said I not an official landlord, what I mean is that I do not charge my parents rent. I pay the £700 mortgage and they live there rent free, my dad gave me £200 a month to help towards this.

Look, this is not a hard concept. YOU ARE THEIR LANDLORD. Your parents are your tenants. They pay you £200/month rent. It doesn't matter how you dress it up to yourselves. Your concept of "unofficial" means absolutely zero.

For me to get the mortgage, I had to declare the exact situation, my mortgage lender knows that I own the property but my parents live there rent free.

But they don't. They pay you £200/month rent. Or, rather, they aren't paying you £200/month rent, because that's exactly why this thread's come into being, right?

You have a choice here.
You can accept that they cannot afford to pay you the rent, and further subsidise their accommodation.
Or you can evict them.

They cannot claim Housing Benefit, because the tenancy that they're living under is explicitly excluded from HB.

You can help them figure out their finances - the full married state pension for them will be around £240/week, before entitlement to any health-related benefits. But Housing Benefit is not available to them, because of the type of tenancy they have. I would have thought means-tested benefits would be unlikely to be available, either, because of the £75,000 gift they gave you five years ago.