A few questions

1socrates1

My sister and I have bought a flat together. We want our mother to live there rent free. In return for this, she will pay for Council tax, service charges, ground rent and utilitity bills. Would an assured shorthold tenancy agreement suffice so that we can use the agreement as proof for the Council and Utility companies, to put those bills in her name?

Thanks

hazyjo

Do you have a mortgage on the property?

1socrates1

No mortgage on the property.

NameUnavailable

I don't think you need proof as such, you just tell the council the tenant is Mrs..... and then she fills in the forms for council tax, electoral roll etc. and same with the utilities.

greatcrested

* a flat? In England/Wales? Does the lease permit letting or perhaps require the freeholder's consent?

* you are accepting rent (payment of ground rent/service charges - this needs to be declared to HMRC

* you need to comply with tenancy law. See

Post 7: New landlords (1):advice & information :see links in next post

Post 8: New landlords (2): Essential links for further information

* you'll need to ensure your insurance (or the freeholder's building insurance?) covers let properties

* a written AST is wise (as is an inventory) but not needed for council tax or utilities.

oldbikebloke

1socrates1 said:

My sister and I have bought a flat together. We want our mother to live there rent free. In return for this, she will pay for Council tax, service charges, ground rent and utilitity bills. Would an assured shorthold tenancy agreement suffice so that we can use the agreement as proof for the Council and Utility companies, to put those bills in her name?

as the occupant in residence, mother, not you, is the only person legally liable for paying council tax as she ranks above you in the hierarchy of liability. An AST will not add anything to that, all you need do is inform the council by letter that the property is now occupied by Mrs X, they should stop sending bills in your name and they should switch the account to her name.

Whether the management company will be willing to change liability for the service charge and  ground rent into her name is very doubtful as you remain the owner. So you will probably still be paying that costs yourself with mother paying you back for it.  Technically therefore you will be charging rent, as the income from mother is "rent", but will be offset in full by the bill you pay, so no "profit" and thus no tax to pay. Also technically therefore you should inform HMRC that you letting a property, but as no tax is due they won't care one jot.

For utilities you just write to them and notify the name of the new person responsible for the property. They will want to know the date of the changeover and so the date of their first new bill. You don't send utility companies proof that you sold a property, nor do outgoing tenants send copies of their notice of leaving to the utility company when asking for a final bill. The out going tenants simply say, final bill to x date, after that charge Mr x. It is not the responsibility of the utility company to seek proof of a change. They bill the name they have on their records and if that person denies responsibility then the utility co says tough, bill in your name, sort it out yourself with the other party, meantime pay up as yours is the name we have. At that point you are of course able to produce a tenancy agreement showing termination etc, but the utility co really doesn't care about that before any such dispute arises.

Bottom line, pointless creating an AST, just write letters to the relevant bodies.

greatcrested

oldbikebloke said:

1socrates1 said:

Bottom line, pointless creating an AST, just write letters to the relevant bodies.

OP cannot choose whether or not to 'create an AST'. It is created by circumstances and by law.

What I think you mean is pointless creating a written AST for the purposes the OP enquires about, and I agree with that.

Though there are other very good reasons for creating a written AST....

macman

What about your mother's long-term security? What happens if you or your sister were to pre-decease her?
Or you or your sister fall out, or one of you wants to sell up?
Do you own the property as joint tenants or tenants in common? 
Please don't say 'we're family, that could never happen'...it can and it does, all too often.
As pointed out above, she will be responsible for the CT and utilities anyway by virtue of being the occupier: there's no need for an AST to 'prove' this.