Letting family member stay in empty property

Sourdougirl

Backgroud
Bought a flat in City A 30 years ago, lived there full time. Met partner 20 years ago he lives in City B, continued working in city A and stayed in flat whilst working but spent off time at house in B. For last 6/7 years had a lodger who has recently moved out. Flat A has remained my primary residence.
We have agreed we should sell flat ( which is now mortgage free) fund an extension from sale of flat A- hopefully next spring / summer. In the interim a  relative has sold his flat and unsure where next move should be and we have agreed he will move into flat A and take some time to consider. This would be rent free but will pay for utilities. Also flat A could be useful if building works make house B difficult to live in, so would make sense to keep until after that.

Sorry for long post but didn’t want to leave information out and drip feed.
My question is there anything legal to consider, would I have to become a landlord which I don’t want.

Brie

I would treat it as a rental even if no rent is paid just to make it clear what is expected.  What if there is damage to the place?  What about the state of appliances etc?  How much notice will you give if you need the place?  

Just because the individual is related doesn't meant that they will be an easy option.  I'd get something legal done just to ensure/limit any hassles.  

eddddy

In your position, I'd just treat the relative as a guest. Leave the utilities in your name, and ask the relative to re-pay you whatever you think is fair.

If your relative goes rogue and refuses to pay what was agreed, changes the locks, refuses to leave, refuses to let you back in, and smashes the place up - maybe you'll have a tougher time without having any legal docs in place. But I guess you have to weigh-up the risks of that happening.

If you have contents insurance, maybe check how it defines guests and what it says about guests. (It probably says things like you're covered for theft - but not if it's your guest who nicks your stuff.)

badger09

eddddy said:

In your position, I'd just treat the relative as a guest. Leave the utilities in your name, and ask the relative to re-pay you whatever you think is fair.

If your relative goes rogue and refuses to pay what was agreed, changes the locks, refuses to leave, refuses to let you back in, and smashes the place up - maybe you'll have a tougher time without having any legal docs in place. But I guess you have to weigh-up the risks of that happening.

If you have contents insurance, maybe check how it defines guests and what it says about guests. (It probably says things like you're covered for theft - but not if it's your guest who nicks your stuff.)

This ^^^^^
Though obviously, it depends on your relationship with said relative.

Having been in similar position to your relative when we lost our house purchase back in November last year but couldn't secure a rental. We were offered a lifeline by a very good friend whose mum had gone into a care home leaving her bungalow empty. We didn't have, or feel the need for any formal agreement. We paid no rent, but covered all bills while we were there. We put CT and TV licence in our names but everything else was left in owner's name. 

It was win win. We had breathing space so could complete on our sale rather than risk losing the chain, and they had the place occupied, looked after, and deep cleaned during the worst of the winter.

Sourdougirl

badger09 said:

eddddy said:

In your position, I'd just treat the relative as a guest. Leave the utilities in your name, and ask the relative to re-pay you whatever you think is fair.

If your relative goes rogue and refuses to pay what was agreed, changes the locks, refuses to leave, refuses to let you back in, and smashes the place up - maybe you'll have a tougher time without having any legal docs in place. But I guess you have to weigh-up the risks of that happening.

If you have contents insurance, maybe check how it defines guests and what it says about guests. (It probably says things like you're covered for theft - but not if it's your guest who nicks your stuff.)

This ^^^^^
Though obviously, it depends on your relationship with said relative.

Having been in similar position to your relative when we lost our house purchase back in November last year but couldn't secure a rental. We were offered a lifeline by a very good friend whose mum had gone into a care home leaving her bungalow empty. We didn't have, or feel the need for any formal agreement. We paid no rent, but covered all bills while we were there. We put CT and TV licence in our names but everything else was left in owner's name. 

It was win win. We had breathing space so could complete on our sale rather than risk losing the chain, and they had the place occupied, looked after, and deep cleaned during the worst of the winter.

Thanks Badger09 and eddddy
thats along the lines I was thinking. We have a very good relationship and I’m not worried about the place being trashed etc. Reassuring that I’m not million miles off in my thinking.
Brie appreciate your caution.

GDB2222

It's always good to thank the people who support your preconceived ideas. At the same time, totally blank the person who has challenged your preconceptions. Makes perfect sense, and it's absolutely bound to lead to the best possible outcome for you.

[Deleted User]

I disagree with edddy. Once you start accepting money from the occupant you’re in landlord territory. If you allow someone to live in your property rent free whilst they pay the council tax and utilities the occupant will be an excluded occupier. 

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

You could have a simple agreement drawn up so that each party knows what the other expects such as who pays the council tax. Even if you’re on good terms it’s best to put the agreement in writing just in case. 

badger09

GDB2222 said:

It's always good to thank the people who support your preconceived ideas. At the same time, totally blank the person who has challenged your preconceptions. Makes perfect sense, and it's absolutely bound to lead to the best possible outcome for you.

Unless I've missed something, OP has not 'blanked' anyone, having acknowledged the responses of all 3 posters. 

I too accept that caution is needed in this scenario. However, OP alone knows her relationship with the relative. Perhaps I'm naiive in my belief that most will act honourably in this situation. 

saajan_12

A relative you have a good relationship with is exactly who you DON'T want to have any misunderstandings with. If you have a written agreement outlining who pays what, who's responsible for repairs, how long they can stay, what the notice period is, that reduces the chance that someone forgets. Otherwise what happens when something breaks down making it uninhabitable? when you need to move back in and they don't want to leave? 

What's behind your reluctance to become a landlord - the paperwork is all doable, the scary bit is really the risk if you miss something.

• If you and the relative remain friendly, then this isn't an issue as no one comes to check without someone reporting / suing first. 
• If you fall out, that's when breaches of landlord responsiblities could get escalated - even if they turn out to be not required, its still a hassle to prove it. So you're better off just doing the paperwork, and avoiding the risk. 

Sourdougirl

Apologies if I’ve blanked anyone certainly didn’t intend to. To the posters advising caution I get where you are coming from and that’s exactly the advice I would give someone. 

However I realise that this is the only family member I would do this for and have no worries.

Your replies have given me food for thought and we will have a chat next week and set some boundaries, contract and time limits etc so we both know where we are coming from.

Saajan _12 My reluctance to be a landlord is definitely the paperwork, I would have to register as a landlord and then the inevitable tax return etc,  would I not look a bit silly ( or suspicious) being a landlord who doesn’t charge any rent?
  I was seeing this as a short term ~6 months or so, do some repairs, decoration and market next spring, but not a problem if it was for longer, they may well decide to buy it.

I was more worried if there were any tax implications- gift in kind etc but I’m probably overthinking this.

CIS

would I not look a bit silly ( or suspicious) being a landlord who doesn’t charge any rent?

On a practical point, it won't be a tenancy on a family let where all parties are clear and in agreement. The free rental alone would prevent it from ever becoming an AST for the purposes of deposits, EPC etc etc as it falls under the minimum required rental value in Schedule 1 of the HA 1988.