Advice required re inherited property and buying out sister

davidmcn

AdrianC said:

voucherqueen42 said:

What’s to stop us leaving the property exactly as it is n my fathers name .?

As the executors of his estate, you have a legal responsibility to wrap his estate up in a timely manner.

A legal responsibility to the beneficiaries, yes - who are the OP and her sister. I can't see anybody else having an interest?

voucherqueen42

The property has been rented out to students for 3 years with absolutely no issues and very little ongoing costs.  My husband deals with it, we are 15 minutes away. If we had listened to negative views about letting rooms or the whole house we would have missed out on all the rental income.  Maybe we have just been lucky I don’t know.

I thought with lodgers you only have to give them a week’s notice to leave, it’s not like a tenancy agreement?

voucherqueen42

Thanks for that link steam powered.  If I have overlooked it and my sister too, I can see this being quite common. I’m assuming it crops up a lot when people come to sell inherited properties? If you’ve never dealt with a death and probate before it’s not always apparent everything you have to do.

xylophone

The house can be transferred into the names of the beneficiaries.


https://help.landregistry.gov.uk/app/answers/detail/a_id/27/~/transfer-property-to-the-beneficiary-after-the-sole-owner-has-died

You say that your sons will move into the property and will take lodgers.

You  and your sister will be landlords and your sons will be tenants?  They will take lodgers and receive the rents?

Just a thought - you say that your sister is childless and  already owns two properties - there is likely to be a substantial IHT liability on her death?

Might you and she consider varying your father's will to pass the property direct to his grandsons?

They could then live in the property and sell the property as their PPR in a few years time?

voucherqueen42

Hi xylophone the plan would be to pay my sister off.  We have the cash to do this and not leave ourselves short.  Unfortunately under no circumstances would your proposal work as I feel my sister has always been resentful of me having children (her and her husband couldn’t have any) and they were the absolute light of their grandfather’s life.  My father hinted for years that he wanted to leave his house to my two sons as my sister has 2 properties and hundreds of thousands in the bank but he didn’t want to upset her.  I don’t know what’s going to happen to her estate as she’s extremely frugal and will never spend any of it.  I’ve no doubt she would buy me out if we did as others on the forum have suggested and just sold up and banked the cash, leaving her with three properties. 

UnderOffer

voucherqueen42 said:

The property has been rented out to students for 3 years with absolutely no issues and very little ongoing costs.  My husband deals with it, we are 15 minutes away. If we had listened to negative views about letting rooms or the whole house we would have missed out on all the rental income.  Maybe we have just been lucky I don’t know.

I thought with lodgers you only have to give them a week’s notice to leave, it’s not like a tenancy agreement?

Are you suggesting your current tenants are lodgers? I’m sure to be a lodger they need to be living with their landlord?

https://england.shelter.org.uk/housing_advice/private_renting/lodgers

xylophone

You can buy your sister out so that you and your husband will own the property.

Your will grant your sons a tenancy (presumably you are familiar with the law relating to landlords as you are already renting out the property).

They will then take lodgers and receive the rental income?

https://www.moneyadviceservice.org.uk/en/articles/renting-out-a-room

voucherqueen42

Hi xylophone why would we have to grant them a tenancy?  I thought this was only for if we were renting out the property to them for financial gain but we are letting them live there rent free.  Doesn’t a tenancy imply it is a business and we would pay tax?  Sorry, I’m confused! 

theoretica

What is the attraction of supporting your sons by not charging them rent in that one house over them moving out and paying rent wherever they choose while you rent the house out at going rates and save the accumulated rent to potentially give them towards their deposit?  Your way has some tax advantage, but considerable loss of flexibility for where they can live, doesn't get them used to paying their own way, and will they choose to save as hard as you plan?

voucherqueen42

I totally understand the current tenants are tenants and all the necessary agreements are in place with the deposits protected etc etc all by the book.