Renting my ex council house out to an ex joint tenant

Paparicious

Hello there. I wonder if you could help me with a question regarding renting my property to someone who used to be a joint tenant.

11 years ago I moved into a council property with a friend and we were put onto a Joint tenancy with the council. We had both just left care and decided to live together. Fast forward 7 years (4 years ago) I had managed to save enough to purchase the property. At the time the Joint tenant had stated I could purchase the property as they were planning on moving up to Scotland. I purchased the property and the Joint tenant never moved out as planned.

My friend pays me £50 a week and then half the bills at the moment however they do not have a regular income due to 0 hour contract and temporary work.

I am planning on moving to the Midlands in the next 12 months as I have found my family who I have been able to form a genuine relationship with which after all these years is great!

My two options are to either sell the house or rent it out so that I can afford to either purchase or rent another property. I do not want to force them out as that would not be right! I was just wondering if anyone knew if I was to rent the property out to my friend would they be able to claim housing benefit for the other 50% of the rent even though they used to be a joint tenant on the property?

It is a real dilemma for me as I cannot move on in my life, but at the same time I cannot make a genuine friend move out just so I can move down to be with my long lost family.

I have tried contacting my local council and have been waiting for answers for the last 4 weeks and it is getting frustrating. Any genuine help would be greatly appreciated. Thanks in advance, Kay

G_M

So you own a property which you currently live in as your main residence..

You have a lodger living with you who pays you £50 pw + bills.

You plan to move out. Your lodger will thereby gain 'exclusive occupation' and become a tenant, with full tenancy rights.

I assume you have no mortgage - or if you do then I assume your mortgage lender will agree to grant you CTL?

I assume that you will change your insurance to a landlords policy.

I assume also that you will comply with the 59 legal obligations of a landlord.

With regard to Housing Benefit, your query would best be directed to the Benefits board here, but I fail to understand what you mean by "the other 50% of the rent". How much rent are you planning to charge for the tenancy? Whatever figure you charge is the rent payable - there is no division into two 50% amounts.

I also fail to understand the relevance of the fact that 4 years ago you and your lodger were joint tenants of the council. That is history.

I assume at present you rely on the Rent-A-Room Scheme which allows you to ignore the rent for Income Tax purposes. Once you let the property under a tenancy that will no longer be possible and you will need to declare the rent to HMRC.

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tacpot12

Your best hope is that your friend can move on with their life. They are going to struggle to find anywhere to live if they have an uncertain income.

Would they consider moving to the West Midlands with you? This could be an option, as it would ld give you a ready-made lodger, but if they can't secure even temporary work in the new location then they won't be much help to you in paying your mortgage.

I would suggest that you drop gentle hints to your friend about the fact that you need to sell the property to move and that you expect them to move out when you do - see if this persuades them to find a permanent job. With this they can expect to be able to rent somewhere. Helping them hook up with someone who they could share with would also be a good idea. Well done looking after your friend; I hope you can find a way to make your move happen.

ThemeOne

I suppose what the OP means by 50% of the rent is that the amount the friend currently pays as a lodger is only around half of what they would expect to get for the property let as a normal tenancy.

They may be able to claim housing benefit for the new rent but I know some councils have caps on what they will pay.

Another option might be to keep the house as your primary residence and maybe spend the night there once a week. I imagine (others will correct me if I'm mistaken) this will mean your friend remains a lodger not a tenant, you will retain the tax benefits of the Rent a Room Scheme, and you can keep in touch with your friend whose welfare you obviously care about. This might also provide a useful safety net in case things don't work out as you hope with your newly discovered family.

Norman_Castle

G_M wrote: »

I also fail to understand the relevance of the fact that 4 years ago you and your lodger were joint tenants of the council.

RTB bait....

silvercar

I wonder what extra rights your friend may have on the grounds that they were a tenant of the property before you bought it and that you bought it with the tenant/ friend already living in the property.

Also wondering if the mortgage lender knew that on completion the tenant was already living in the property. Normally a lender expects completion to be on the basis of "vacant possession", though in the RTB scenario there must be a clause for the buyer being already a tenant, I doubt there is a clause for another person with RTB rights already in the property remaining in situ.

From the tenants point of view, they moved from being a tenant of the council to a lodger of yours. That may very well give them more rights that a tenant under an AST or a lodger under a basic lodger agreement. Unless the tenant signed something at the time of your purchase (and that may well have been a requirement of the mortgage lender and/or a condition of the council allowing you to buy it alone) I wonder if they have rights as a sitting tenant? After all, you bought a property with a tenant living in it who remains.

Cakeguts

When you friend surrendered their tenancy to the council so that you could buy the house as a sole tenant did they do this in writing?

Cheeky_Monkey

If you sell it, you will presumably have to pay back a proportion of the RTB discount you got as it's probably within the time period to do so.

dimbo61

I belive you need to own the property for over 5 years before you can sell and not have to repay the discount you received when you first purchased your home from the council. ( Please check by either reading the RTB paperwork or contacting the council )
Buying and selling is expensive and will you be happy moving area.
How will you manage work wise ?
How much equity will you have to buy another property.
Will you get a mortgage.
Are you happy to leave your life behind where you live now ?

Cakeguts

I think the friend who is supposed to be a lodger could quite easily be a 50% owner where the person who thinks that they bought the house on their own actually gifted 50% to their joint tenant on the basis that they didn't have the Right to Buy the house on their own but only as a joint owners. It all depends on how the joint tenant surrendered to the council their secure tenancy because at the moment it doesn't sound to me as if they did.

silvercar

Cakeguts wrote: »

I think the friend who is supposed to be a lodger could quite easily be a 50% owner where the person who thinks that they bought the house on their own actually gifted 50% to their joint tenant on the basis that they didn't have the Right to Buy the house on their own but only as a joint owners. It all depends on how the joint tenant surrendered to the council their secure tenancy because at the moment it doesn't sound to me as if they did.

I would think the friend/ lodger would have had to surrender their RTB for it to take place. The new owner would be registered on the deeds with Land Registry and as the sole mortgagee.

But I would think they had tenancy rights that haven't been signed away. They may well have rights as an assured tenant (as opposed to an assured shorthold tenant) on the grounds that the tenancy was originally a letting from a HA or Local Authority and the tenant hasn't changed.