Joint mortgage, renting a room

theartfullodger

If sisters pays you to compensate for not living there sounds like "income" as in "income tax".

That you then pay it towards mortgage (or cases of wine or a big new television) is neither here nor there.

saajan_12

Just write up an agreement that you both own 50/50 and if only 1 of you is resident then they pay the full mortgage / utilities as they have exclusive occupation of the property.
Any capital improvements / mortgage overpayments should be paid 50/50.

Note you will still have to pay capital gains tax for the time you were not resident. However this wouldn't incur income tax since as joint owners you can split the mortgage however you like. 

Tessa37

Thank you. If I have to pay tax I will do it. My question was directly more exactly about what you suggested... 
We have to come up with some kind of agreement as this is not really about a lodger/ tenant. If I or my sister will rent the room out, simply one of them (lodger/tenant) would pay the rent for using the flat/ room.

This is legal advice which I found on property/ lawyer website:

Where one party pays more than the other towards the mortgage repayments, they may have a case for receiving more of the property income on sale as they have created a constructive trust... 
It sounds like I could loose my equity.

If I have to pay tax on renting the room out I will do it but my main concern is what agreement to come up with my sister. 
I also found out on home and property; that I have a right to rent out my room. 

Comms69

Tessa37 said:

Thank you. If I have to pay tax I will do it. My question was directly more exactly about what you suggested... 
We have to come up with some kind of agreement as this is not really about a lodger/ tenant. If I or my sister will rent the room out, simply one of them (lodger/tenant) would pay the rent for using the flat/ room.

This is legal advice which I found on property/ lawyer website:

Where one party pays more than the other towards the mortgage repayments, they may have a case for receiving more of the property income on sale as they have created a constructive trust... 
It sounds like I could loose my equity.

If I have to pay tax on renting the room out I will do it but my main concern is what agreement to come up with my sister. 
I also found out on home and property; that I have a right to rent out my room. 

If i buy a lottery ticket, I 'May' win the jackpot. But probably not. 

I also found out on home and property; that I have a right to rent out my room.  - Who says? Where's the link? And in anycase; not to a lodger!

Tessa37

I don't think we understand each other...

You are saying I will not loose equity if my sister starts to pay my mortgage?

The scenario isn't really about if it's tenant/ lodger... One of them would simply pay money for using the room/ flat.

If I rent out the room: I understand it will be tenant.

If my sister rents the room: it will be a lodger. 

Tenant or a lodger one of them would pay the rent...

I moved out and there is no lodger/ no tenant only my sister but we still have pay mortgage in full.

This is legal advice which I found on property website:

Where one party pays more than the other towards the mortgage repayments, they may have a case for receiving more of the property income on sale as they have created a constructive trust. It sounds like I would loose my equity...

If I have to pay tax on renting the room out I will do it but my main concern is what agreement to come up with my sister. 

Comms69

Tessa37 said:

I don't think we understand each other...

You are saying I will not loose equity if my sister starts to pay my mortgage?

The scenario isn't really about if it's tenant/ lodger... One of them would simply pay money for using the room/ flat.

If I rent out the room: I understand it will be tenant.

If my sister rents the room: it will be a lodger. 

Tenant or a lodger one of them would pay the rent...

I moved out and there is no lodger/ no tenant only my sister but we still have pay mortgage in full.

This is legal advice which I found on property website:

Where one party pays more than the other towards the mortgage repayments, they may have a case for receiving more of the property income on sale as they have created a constructive trust. It sounds like I would loose my equity...

If I have to pay tax on renting the room out I will do it but my main concern is what agreement to come up with my sister. 

If you have a tenant, that means you have additional responsibilities. The fact you dont understand the difference, if the reason why this is a bad idea. 

e.g. tenant and sister fall out / argue. You cant just remove the tenant....

How you pay the mortgage is entirely between you two. The default position is that you own it 50/50; and that isnt going to change if one pays more than the other. Since you're just copying text from god knows where i dont know the context of that quote. 

greatcrested

I repeat my earlier advice - separate yourself from this financial connection with her. It is not working. It is fraught with legal issues. It is bound to lead to family dispute and break-up.

She (perhaps understandably) does not want to share with a stranger, so irrespective of whether you can legally put someone else in there, and whether that would be a tenant or lodger, and where their rent would go, you and your sister are going to be at loggerheads.

If she cannot afford to buy you out, then you should both sell. She can then buy a smaller, more affordable property to live in on her own, and you can get your hare to do as you want with.

Sit down with your sister (Covid safely) and discuss this reasonably.

[Deleted User]

Tessa37 said:

I don't think we understand each other...

You are saying I will not loose equity if my sister starts to pay my mortgage?

The scenario isn't really about if it's tenant/ lodger... One of them would simply pay money for using the room/ flat.

If I rent out the room: I understand it will be tenant.

If my sister rents the room: it will be a lodger. 

Tenant or a lodger one of them would pay the rent...

I moved out and there is no lodger/ no tenant only my sister but we still have pay mortgage in full.

This is legal advice which I found on property website:

Where one party pays more than the other towards the mortgage repayments, they may have a case for receiving more of the property income on sale as they have created a constructive trust. It sounds like I would loose my equity...

If I have to pay tax on renting the room out I will do it but my main concern is what agreement to come up with my sister. 

No, I didn't say you wouldn't loose equity, I said you wouldn't lose equity.  You own the property either as joint tenants or tenants in common with no deed of trust so any equity split from a future sale has already been determined.  It's either 50/50 if you're joint tenants or whatever tenants in common split you agreed when you purchased the property which I'm guessing is also 50/50.

FinallyStoppedLurking

greatcrested said:

I repeat my earlier advice - separate yourself from this financial connection with her. It is not working. It is fraught with legal issues. It is bound to lead to family dispute and break-up.

She (perhaps understandably) does not want to share with a stranger, so irrespective of whether you can legally put someone else in there, and whether that would be a tenant or lodger, and where their rent would go, you and your sister are going to be at loggerheads.

If she cannot afford to buy you out, then you should both sell. She can then buy a smaller, more affordable property to live in on her own, and you can get your hare to do as you want with.

Sit down with your sister (Covid safely) and discuss this reasonably.

Agreed. Also seems daft that the OPs sister sees this. She would be much better off buying her own place. 

Tessa37

greatcrested said:

I repeat my earlier advice - separate yourself from this financial connection with her. It is not working. It is fraught with legal issues. It is bound to lead to family dispute and break-up.

She (perhaps understandably) does not want to share with a stranger, so irrespective of whether you can legally put someone else in there, and whether that would be a tenant or lodger, and where their rent would go, you and your sister are going to be at loggerheads.

If she cannot afford to buy you out, then you should both sell. She can then buy a smaller, more affordable property to live in on her own, and you can get your hare to do as you want with.

Sit down with your sister (Covid safely) and discuss this reasonably.

I wish to move out for over a year and property is for sale over a year. Therefore tenancy would be only short let...
I finally moved out based on agreement of renting out the room. Which seems impossible again.