Complications of staying in house rent free for partner after someone passed.

Chip46

I'm struggling to work out complications, family member passed and the home is now owned by the children, the partner remains in house, however they pay the bills but no rent, there is no contract and no time length given, I believe they should pay rent for wear and tear on property, also which buildings and contents do they purchase as there is no contract.. Any advice pls.

davidmcn

"Now owned" as in probate is complete and ownership has actually been transferred to the children? Or still being dealt with by the executors? What's the current insurance? 

Norman_Castle

Are both parties happy with the arrangement?

The property owners should insure their asset.

getmore4less

Was there a will? 
What did it say?
(Eg any provision for partner) 
Why is the partner in the house? 
How long is this arrangement to last? 

greatcrested

Without knowing whether Probate has been granted and the Estate wound up ay advice is preature.

Is the propety in the hands of the Executers/Administrators, or has the Title been transferred following Probate into the childrens' names?

Who is/was the Executer/Administrator?

Chip46

Thank you for replies, the house has been transferred into both children's name as per the will and registers with land registry, the will did not stipulate about the partner,  however it was the wish of the passing family member that they stay on indefinitely,  I know the family members are happy to do this, however with no contract or rent being paid, they are paying for an expensive landlord insurance for building and contents, but also the wear and tear on house with no idea the length of time they will be able to use their inheritance. Also legal implications more importantly without a contract. 
Thank you for reading 

Chip46

Thank you for replies, the house has been transferred into both children's name as per the will and registers with land registry, the will did not stipulate about the partner,  however it was the wish of the passing family member that they stay on indefinitely,  I know the family members are happy to do this, however with no contract or rent being paid, they are paying for an expensive landlord insurance for building and contents, but also the wear and tear on house with no idea the length of time they will be able to use their inheritance. Also legal implications more importantly without a contract. 
Thank you for reading 

greatcrested

No need to duplicate your post. There's a 'delete post' option at top right of each post.

If no rent is being paid, there is no tenancy. However, rent does not have to be cash, it can be paid 'in kind'.

If the occupant is paying for 'wear and tear', maintenance, insurance etc on the owners' behalf, that is effectively 'rent',  and the owners (the children) are landlords.

They must therefore comply with all 98 laws and regulations that apply to landlords, must declare the rent (the cash value of what is being paid by the occupant) to HMRC for tax, and possibly register as landlords (Scotland, Wales, and some English council areas).

It appears that the occupant was given no right to remain under the terms of the will. Whatever the 'wishes' of the deceased may or may not have been (a matter of conjecture) this was not confirmed in the will, so is entirely at the discretion of the new owners (the children).

I would advise they do one of two things:

* evict the occupant and then decide whether to sell the property, move into it, one or more of them to buy the other(s) out, or let it on the open market, or

* formalise a proper tenancy with the occupant, with a proper rent (either market rent or sufficient to cover the costs, up to them to decide and agree with the tenant) and learn what is involved in being a landlord(s).

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davidmcn

Chip46 said:

they are paying for an expensive landlord insurance for building and contents

If the occupier isn't a tenant, there may be cheaper options - I found LV provided much cheaper cover for a "second property occupied by family" situation compared with landlord policies.

That's for the building though - any contents insurance needs to be in the name of whoever owns the contents. I'd have thought that's more likely to be the resident?

getmore4less

Chip46 said:

Thank you for replies, the house has been transferred into both children's name as per the will and registers with land registry, the will did not stipulate about the partner,  however it was the wish of the passing family member that they stay on indefinitely,  I know the family members are happy to do this, however with no contract or rent being paid, they are paying for an expensive landlord insurance for building and contents, but also the wear and tear on house with no idea the length of time they will be able to use their inheritance. Also legal implications more importantly without a contract. 
Thank you for reading 

With that in mind there was the options to make that formal with a DOV  to create a IPDI trust giving a  life interest that puts obligation on the life tenant to maintain the property and cover ALL costs.

This would also avoid the the future CGT and any landlord obligation that would come into effect through circumstance. 

I think this option may no longer be possible since they house has been transferred and a retrospective DOV(if less than 2 years of DOD) may not be possible now.

That would need specialist advice 

If that is what he really wanted it should have been in the will not "wishes".

Might be time to encourage the partner to move on or buy them out depending how they feel about the wishes.

Hannimal

Speak with a solicitor, don't ask random internet people for advice. Half the people writing on here do not know what they are on about, as is evidenced by you already receiving conflicting advice. 

We had a similar situation where after my gran's passing my cousin who had cared for her stayed on in her house. We had an agreement that the cousin looks after the property and maintains it, but when they move out it will be sold and those of us who inherited it will get our share then. I doubt we will ever see the money but I'd rather not get an inheritance - I did nothing to deserve it - than see my cousin who made grans final years worthwhile end up on the streets. No advice here - just wondering whether this is a question about money or a question about the kind of person you want to be.