Allowing grand daughter to live in old house, after move to new flat (casual rent agreement)

bennyuk

Hi,
My dad is moving from his old home to new flat. No mortgages and doesnt intend to sell his old home for a couple of years (will be small portion of CGT when he does sell on the portion of time spent not living at address).

He wants to take his time clearing/moving stuff out of old house to new flat, and wants granddaughter (and BF) to live in house while he's not there, as they can repair/clean/refurbish the house.

He's thinking of charging them a nominal monthly fee to cover costs, no written agreement (all parties are fine with that), as he will continue to pay bills (council tax, elec, gas, water, insurance).

Is this allowed? Everyone is fine with this as we all get on, just checking if this sort of lose arrangement is allowed?

Many thanks for any tips.

Jude57

Whether there's a written tenancy agreement or not, granddaughter and her partner will be grandfather's tenants. This gives them rights and gives grandfather responsibilities. I'd recommend looking at the stickies at the top of this board for information on what this means for them.

A couple of things that come to mind:

Grandfather will need to check his household insurance as it may be invalidated if he's not residing there any more.

As to Council Tax, there's the hierarchy of liability which in essence means that grandfather must register for CTax at his new address and granddaughter and partner must register at their new address. If they don't, grandfather could end up paying at his new address (sole or main residence, also is he claiming single occupant discount?) and being billed for his previous address too, if he claims that property is unoccupied, often at least double the standard (not discounted) rate of CTax. Bear in mind also that it's an offence to fail to advise the Council Tax department of material changes in occupation.

I'm sure others will be along with more but hope this helps as a start.

princeofpounds

Whilst this is all allowed...

There's no such thing as a casual rent agreement when the 'casual' hits the fan, as they say.

There is either a tenancy, or there isn't. In this case, there would be a tenancy, given rent is being charged and the granddaughter has exclusive occupation.

If there is a tenancy, then a lot of things kick in. Including:

- grandpa cannot evict granddaughter without a court order. That means if he wants her out, and she doesn't want to go, it could be a up to a year and a couple of grand to get it done.
- granddaughter can lock grandpa out of the property, pending a court order.
- grandpa is responsible for repairing the property. Even if granddaughter stops paying rent.
- grandpa needs landlord insurance
- grandpa is liable for all the utilities etc. that granddaughter uses, even if she stops reimbursing him, whilst his name is on the account. Better hope granddaughter doesn't start up a weed farm.
- grandpa will need to get gas safety certificates, EICR, fire and CO alarms, EPC
- grandpa will need to fill in his tax return to declare the rental income.
- don't forget about deposit protection and how to rent leaflets, if applicable.
etc. 

Obviously if things stay casual then a lot of this stuff will never get invoked. But if anyone falls out, you have to be prepared to deal with it all on an arms'-length basis.

Also, if granddaughter is going to be spending money doing the place up, then there is a risk of her establishing a beneficial interest in the property - more so if she is not a tenant than if she is actually. 

Brie

And if grandfather requires assistance from social services they might insist on the house being sold to pay for care.  And kick out daughter & BF in the process despite any reno they might have done. 

They won't be able to force him to sell the flat he is living in but a house is likely to be more valuable.  

Obviously not a problem if he is filthy rich but care costs cut into that mighty quickly.

bennyuk

Thanks for the advice. I think then a "a licence to occupy" might be better than a "tenancy agreement" in this case. Then if there is no "rent charge" its just like letting someone live in your home for free. If original owner continues to pay all the bills (council tax, elec, etc) then hopefully can keep this as simple as possible. and yes, if granddaughter needs to be kicked out then all are ok with that.