Landlord Registration - Scotland

CLB2013

Hello

I wonder if someone could clarify something for me.
My father currently lives in a house that we pay a mortgage on.  No money has changed hands for rent.  We live in his property that he has no mortgage on, again no money has ever changed hands for rent.  Both parties cover the council tax & utilities for the property that they occupy.  
We have always been led to believe what we are doing is legal and above board.  Today we have received a letter stating that it has came to the LA's attention that we are renting out said property and will need to apply for Landlord Registration.  Reading over The Antisocial Behaviour etc.(Scotland) Act 2004 again we still believe that we come under the list of exclusions as
lets to family members (as defined in section 108, Housing (Scotland) Act 2001)  (taken from Registration of Private Landlords: Guidance for Local Authorities, Section 3
Is there anyone around that could give us a little bit of advice? 
Thanks.

Comms69

I dont see why you think your exempt though, he's paying rent (which presumebly you're not declaring?)

davidmcn

CLB2013 said:

Today we have received a letter stating that it has came to the LA's attention that we are renting out said property and will need to apply for Landlord Registration.  Reading over The Antisocial Behaviour etc.(Scotland) Act 2004 again we still believe that we come under the list of exclusions as
lets to family members (as defined in section 108, Housing (Scotland) Act 2001)  (taken from Registration of Private Landlords: Guidance for Local Authorities, Section 3

Yes, I think you're correct. Just point it out to the council, I presume all they know is that the property is owned by somebody who isn't residing there which is why it's on their radar, they can't easily figure out who's a relative and who isn't unless somebody tells them.

greatcrested

CLB2013 said:

My father currently lives in a house that we pay a mortgage on.  No money has changed hands for rent.  We live in his property that he has no mortgage on, again no money has ever changed hands for rent.  Both parties cover the council tax & utilities for the property that they occupy.  

I'm not familiar with Scots law, but it sounds like you are each paying rent in kind.

You provide a property for your father to live in. You don't receive rent in cash in return, but you do receive rent in kind, in the form of a property in which you can live.

And vice verse.

Whether that requires landlord registration under Scots law, I don't know.

CLB2013

Comms69 said:

I dont see why you think your exempt though, he's paying rent (which presumebly you're not declaring?)

If you read my post again you will see that NO cash is changing hands and never has done.  So there is nothing to declare.  

greatcrested

CLB2013 said:

Comms69 said:

I dont see why you think your exempt though, he's paying rent (which presumebly you're not declaring?)

If you read my post again you will see that NO cash is changing hands and never has done.  So there is nothing to declare.  

If you read my post you will see that even if no cash is changing hands, rent is being paid. Rent does not have to be paid in cash.

Comms69

CLB2013 said:

Comms69 said:

I dont see why you think your exempt though, he's paying rent (which presumebly you're not declaring?)

If you read my post again you will see that NO cash is changing hands and never has done.  So there is nothing to declare.  

I misread your post, you put we pay the mortgage, i read it as he pays the mortgage. So fair enough, but rent could also be 'in kind', though i'm not 100% on this

[Deleted User]

You are exempt from landlord registration if you are letting to family. 

https://www.mygov.scot/renting-your-property-out/registration/

Great crested is right though. Cash might not be changing hands but there is a benefit in kind. 

theartfullodger

I think you'd both (you & dad ...) be safer to each be registered, if only because the possible fine for non-compliance is up to £50k: Yes, FIFTY THOUSAND QUID!. Registration costs less than £100 for each property for 3 years. See....

https://www.landlordregistrationscotland.gov.uk/fees-information

And humbly suggest you look very carefully at landlord insurance (both you and dad are clearly landlords of the other properties they don;t live in).  If the worst happened (say fire, severe injury, place burned down..) "normal" householder insurance would likely not pay out: And the risks on relying (say..) on what someone's mate down the pub said about you being covered is unwise against the possible risk (£100k+ losses, bankruptcy perhaps,.etc etc etc...).  Even someone tripping over on a raised flagstone & breaking bones, off work.. You don't want to go there!

IMHO Great crested is absolutely correct: There's significant benefit in kind.   Non-£££ rent is known as "moneysworth"

I'd also probably write to HMRC a calm, polite, and carefully worded letter: I understand they have the power to tax people at market rent if they decide some funny fiddling is going on.  Or have you ALL already declared what's happening to HMRC?

But, hey, free country -

Slàinte mhath!

Artful: Scottish landlord since 2000, and yes, registered.

PS The general rule for landlords (yes you ARE landlords..- even if registration might not be needed) is don't have family or friends as tenants (yes you ALL are tenants..). 

PPS. As you don;t live in your own residences you are of course liable to CGT on sale/disposal/death etc.... If this has been going on for some years the bills may very well be in the £10's of £ks. 

PPPS: Anyone claiming any benefits??

PPPPS: Please tell us there are signed, current, agreements for these "occupation agreements"??  If not even bigger mess.

Ah, cunning plans eh!

macman

In English law, there has to be a 'consideration' in order to create a tenancy. That can be cash, goods or services in exchange. Without that, the tenancy does not exist, and so the owner is not a landlord, and the occupier is not a tenant. So, no requirement to register.
I have no idea if Scottish law varies in this respect or not.

davidmcn

macman said:

In English law, there has to be a 'consideration' in order to create a tenancy. That can be cash, goods or services in exchange. Without that, the tenancy does not exist, and so the owner is not a landlord, and the occupier is not a tenant. So, no requirement to register.
I have no idea if Scottish law varies in this respect or not.

Yes, there needs to be rent of some sort in Scotland, even if that's just a notional requirement to pay say £1. But as above, it's exempt from registration anyway.