Advice on being Named Landlord/Mortgagor

konn1ch1ha

Grumpy_chap said:

Complicated - you are going to need professional legal advice.
The deposit is likely to be PET.
Are you in a position to pay the mortgage if the income from the Stepdad and / or Carer fails for any reason?
Are you ready to be a Landlord?
Have you received any advice on whether Stepdad and Carer would make the tenanted property HMO?  I can see the argument that it could be, and also argument against (Stepdad and Carer effectively one household?)
Do you own any other property?  If so, 2nd property SDLT will apply - it will anyway if the Stepdad buys as he will continue to own the current top floor flat.
Do you have your own property, or plan to get?  Your affordability will be impacted if you already have a mortgage.

I did initially read that you would by a three- or-more- bed property so there would be OP, Stepdad plus Carer, but I think on reading again that it will only be Stepdad and Carer in the property.

Also, any pointers where I could get legal advice please?

theartfullodger

HMRC have the power to tax at market rent when they have grounds for believing something might not be right...

konn1ch1ha

Annisele said:

I'm not sure it would be a regulated mortgage. An "unofficial stepdad" might not be family for the purposes of deciding whether this was a regulated mortgage contract, depending on exactly what OP means by the term.

But, regulated or not, I share other posters' concerns that this scheme will fall over the instant a potential lender realises that the deposit has been lent by somebody who then intends to live in the house rent free. Any lender would worry that that situation might give "unofficial stepdad" rights to stay in the property even if OP doesn't pay the mortgage - and if there's any chance of that, the lender will simply decline to lend in the first place.

I'd also be worried about the relationships part of this. OP says they've been "offered a position", which makes it sound as though unofficial stepdad thinks he's doing OP a favour. Depending on the size of the deposit, it might be a favour - but it also might be a very expensive millstone if nobody pays any rent to the OP. Any situation where both parties feel they've done a favour to the other has the potential to blow up.

Yes, sorry - he is my mum's ex who whom remains good friends with the family and lived with us when I was a child. I can see "unofficial stepdad" can be slightly confusing. We'll call him Fred.

What if the Fred was to live there unofficially? Would that be unlawful? Excuse my naivety on this and this why I'm asking.
He didn't offer a position but thought it might benefit everyone involved:
Fred gets somewhere to live at ease for his health and to see his last few years there. 
His carer gets somewhere to live, paying rent through DSS and that going toward the mortgage. He also takes care of Fred.
I get the property, albeit with mortgage and equity. The size of deposit is yet to be known.

konn1ch1ha

lr1277 said:

I will raise one more situation to consider. Say Fred needs to go into care. How to pay for this?

One possibility is that Fred has sufficient funds to pay for private care for the rest of his life. Then it is fine and dandy.

Another possibility is that Fred doesn't have quite enough be he would have enough if he got back the money he gifted you. Would you be able to pay him back yourself or would you need to sell the property?

I think he would rent out his current property to fund his income and any potential issues. I guess him living in the new property with carer would be his "care".

konn1ch1ha

wilfred30 said:

Another scenario - what happens if the friend/carer dies first.  Who will pay the mortgage then?

Very unlikely, but I would probably sell.

Grumpy_chap

konn1ch1ha said:

What does PET mean? 

What does SDLT mean?

Potentially Exempt Transfer

Stamp Duty Land Tax

I am not qualified to advise on choosing a Solicitor.  Either go by local recommendation, or try the Law Society Find a Solicitor service.

wilfred30

konn1ch1ha said:

wilfred30 said:

Another scenario - what happens if the friend/carer dies first.  Who will pay the mortgage then?

Very unlikely, but I would probably sell.

Why is it very unlikely?  Do you think that only old people die?

So, if that happened, you say that  you would probably sell the flat.  So where would Fred live then?

konn1ch1ha

wilfred30 said:

konn1ch1ha said:

wilfred30 said:

Another scenario - what happens if the friend/carer dies first.  Who will pay the mortgage then?

Very unlikely, but I would probably sell.

Why is it very unlikely?  Do you think that only old people die?

So, if that happened, you say that  you would probably sell the flat.  So where would Fred live then?

Obviously not. I was just stating it's unlikely the much younger friend and carer will die before Fred.
In the unlikely event that shuld happen, Fred always has his own flat he can return to worst case scenario. Alternatively, he would likely replace the rent until he would move back to his own property. 

UnderOffer

konn1ch1ha said

Why is it very unlikely?  Do you think that only old people die?

So, if that happened, you say that  you would probably sell the flat.  So where would Fred live then?

Obviously not. I was just stating it's unlikely the much younger friend and carer will die before Fred.
In the unlikely event that shuld happen, Fred always has his own flat he can return to worst case scenario. Alternatively, he would likely replace the rent until he would move back to his own property. 

Why would he return to his original flat, which at the moment is not suitable due to his health and age? In several years time he will be older and possibly have more issues so a move back would seem unlikely. 

konn1ch1ha

UnderOffer said:

konn1ch1ha said

Why is it very unlikely?  Do you think that only old people die?

So, if that happened, you say that  you would probably sell the flat.  So where would Fred live then?

Obviously not. I was just stating it's unlikely the much younger friend and carer will die before Fred.
In the unlikely event that shuld happen, Fred always has his own flat he can return to worst case scenario. Alternatively, he would likely replace the rent until he would move back to his own property. 

Why would he return to his original flat, which at the moment is not suitable due to his health and age? In several years time he will be older and possibly have more issues so a move back would seem unlikely. 

I trust him enough to pay his fair share of rent if worse comes to worst.