Living status

Skyeyez

Hi there. I wonder if anyone could help me make sense of our current situation.
My partner and I live, with our two small children, in a cottage belonging to my partner’s aunt (let’s call her Mrs A). She has never lived in the cottage and used to use it a couple of times a year after inheriting from her late father some decades ago. She has no children, so the idea was that we move into the cottage and she would assign 20% of it to my partner. We would continue to purchase it from her in small amounts over the years and eventually inherit. The cottage was in a state of disrepair when we moved in. We pay the buildings insurance, all bills and are sorting out the electrics and plumbing, neither of which function fully. We have done some minor structural work and are looking to the future in terms of renovating and extending. Our children attend the local school and my partner runs the village sports club, so we are very much looking to stay. Mrs A does not want rent from us but asks in return that we ‘save’ £500 per month to go into her bank account to be used for future work on the cottage. We already do the (extensive) repairs and have taken on the renovation project (The place has a lot of rot, active woodworm and damp damage). We moved in a year ago, when she offered the 20% to my partner, and were really grateful for the opportunity to live here. 

However, as time has gone on Mrs A has changed her offer and now says she sees us as guests at the cottage until we can afford to buy it from her. She and her husband want to come and stay at the cottage whenever they like, and we are to either accommodate them or vacate while they visit. 

Mrs A does not want to draw up a tenancy agreement and just says ‘well you’ll have to get saving then, your generation have got it easy’ when we try to discuss my partner being made a shared owner.

My questions around the situation are 

a) legally speaking, what is our living status right now? Guests? Tenants? More?

b) what sort of agreement can we draw up if she now doesn’t want to make my partner a shared owner until we have saved up the £100k to buy 20% (that’ll take a very very long time!)
c) we’ve built a life already here and have spent all our free time and money on repairing a place that wouldn’t previously be fit for occupancy and is still a project, does that in itself give us any sort of security here?
d) why would she not want a tenancy or shared ownership agreement? 

We are a bit confused about the situation 

AdrianC

A. Are you actually paying any money to her? You're certainly spending money on the property, in lieu of rent, so you are almost certainly tenants.
That would mean she does not have the right to just rock up and expect you to move out... And she does also have a whole bunch of legal responsibilities, including annual gas safety checks etc.

B. What sort of agreement can you draw up? Whatever the two of you can mutually agree...

C. No.

D. I have no idea. Ask her. But if, as I strongly suspect, you are legally tenants, then whether you have a written tenancy agreement or not makes precisely zero difference. There's no way that a percentage ownership can be simply transferred over...

(There is a certain irony in her complaint of "you have it so easy" given that she didn't earn the money to purchase this property, either... But I'm not sure pointing that out to her would be terribly helpful!)

[Deleted User]

Skyeyez said:

Hi there. I wonder if anyone could help me make sense of our current situation.
My partner and I live, with our two small children, in a cottage belonging to my partner’s aunt (let’s call her Mrs A). She has never lived in the cottage and used to use it a couple of times a year after inheriting from her late father some decades ago. She has no children, so the idea was that we move into the cottage and she would assign 20% of it to my partner. We would continue to purchase it from her in small amounts over the years and eventually inherit. The cottage was in a state of disrepair when we moved in. We pay the buildings insurance, all bills and are sorting out the electrics and plumbing, neither of which function fully. We have done some minor structural work and are looking to the future in terms of renovating and extending. Our children attend the local school and my partner runs the village sports club, so we are very much looking to stay. Mrs A does not want rent from us but asks in return that we ‘save’ £500 per month to go into her bank account to be used for future work on the cottage. We already do the (extensive) repairs and have taken on the renovation project (The place has a lot of rot, active woodworm and damp damage). We moved in a year ago, when she offered the 20% to my partner, and were really grateful for the opportunity to live here. 

However, as time has gone on Mrs A has changed her offer and now says she sees us as guests at the cottage until we can afford to buy it from her. She and her husband want to come and stay at the cottage whenever they like, and we are to either accommodate them or vacate while they visit. 

Mrs A does not want to draw up a tenancy agreement and just says ‘well you’ll have to get saving then, your generation have got it easy’ when we try to discuss my partner being made a shared owner.

My questions around the situation are 

a) legally speaking, what is our living status right now? Guests? Tenants? More?

b) what sort of agreement can we draw up if she now doesn’t want to make my partner a shared owner until we have saved up the £100k to buy 20% (that’ll take a very very long time!)
c) we’ve built a life already here and have spent all our free time and money on repairing a place that wouldn’t previously be fit for occupancy and is still a project, does that in itself give us any sort of security here?
d) why would she not want a tenancy or shared ownership agreement? 

We are a bit confused about the situation 

I agree with @AdrianC that you are almost certainly tenants not matter how auntie tries to dress it up.  

Could you afford to buy the property with a mortgage as in the whole property and not just a 20% share? Would aunt be willing to sell you the whole property? If the answer to either of those is no then I think you and your partner really need to have a good think about whether you want to remain in this property. The aunt has already done a switcheroo on the original deal and is getting you to pay to do up the dilapidated property she worked so hard to buy (I know it’s inherited). I wouldn’t trust another word that comes out her mouth and I wouldn’t keep spending money on the property in the vain hope of one day owning it or at least part of it. 

pramsay13

The property is worth half a million? 😱

FreeBear

Skyeyez said: Mrs A does not want rent from us but asks in return that we ‘save’ £500 per month to go into her bank account to be used for future work on the cottage.

Matters not how she dresses it up, that £500 is a rental payment in my opinion. Certainly, HMRC would see it as a taxable income, and a judge would also conclude that it is rent.

If you are having to "save" £500 per month and do a bunch of renovation work, I suspect you are being royally screwed and being taken for a pair of suckers. To protect yourselves and ensure you are not being taken for a ride, you really do need a legally binding agreement drawn up.

greatcrested

You are paying rent. She may not call it rent, but it is money paid by you, either directly to her or to pay for improvements to her property.

You are tenants.

And, I strongly suspect, she is evading her tax obligations.

a) tenants

b) a tenancy agreement. If in England, an AST

c) doubtful

d) because then she'll need to comply with a whole raft of legal obligations as a landlord, as well as paying tax.

She's not going to like this!

See

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

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

Skyeyez

My thanks and apologies all! I’ve only just seen these answers and really appreciate them. 

Will check back tomorrow and respond to your points individually...

Skyeyez

pramsay13 said:

The property is worth half a million? 😱

Yep...a teeny cottage in Cambridge. Prices around here are off the chart. Probably the main reason we’ve stayed put in this leaking, freezing, combative little house for so long as we simply can’t afford to buy much around here...

Skyeyez

Hello, I wonder if anyone would be able to clarify a point that has recently come up.

Mrs A today says we need to share/vacate the property as we are only here as guests under a Licence to Occupy. It’s the first time this term has been used, does it apply to us? She says we are living in a fantasy land if we think we have any tenant rights.

Many thanks

princeofpounds

This is just a repetition of their claim that you don't have a tenancy - a license would be the alternative if you were occupying the building with permission, but without making any consideration (payment) to do so. You are making payment - funding repairs and improvements - so you almost certainly have a tenancy. Nothing has changed.

Ultimately it would be for a court to decide. If you can evidence the arrangement for improvements then you will almost certainly win.

If, for some reason, you were found not to have a tenancy, then you may have established a beneficial interest in the property instead. Not sure that's really better for your landlords! But I don't think you need to even think along those lines unless you cannot evidence the arrangement that you have (can you?).

If I were you, I would simply reply saying thanks for the letter, but despite their opinions you do have a tenancy.

saajan_12

Your argument its a tenancy would be based on 2 things:
1) Paying rent (£500 to their savings account.. what they use it for is irrelevant)
2) You doing material works to the property, agreed by the LL, in lieu of rent.

The key change from your other thread is that the £500 is now being paid into your own bank account instead of theirs.. So that can effectively be ignored and (1) is gone. 

So the question is does (2) still hold - for an extreme example, a guest / licencee doing some minor painting of their own accord because they prefer a different look, wouldn't necessarily create a tenancy. Key questions are 
* what exactly were the works done by you at your expense
* were these things that would usually be a LL's responsibility
* were these requested by the LL (rather than just for your comfort)