Is a mother living alone and rent free in a house owned by her children a legal tenant?

jm60owl

The family has three children each owning their own properties. They also jointly own another property which their mother occupies. There is no mortgage on the property. No rent is paid and the mother pays  all running costs and utilities herself.

Is this regarded as a tenancy? Are the children landlords in the legal sense?

Slithery

It's not a tenancy if no rent is paid.

However, bear in mind that rent doesn't have to be a cash payment. It can be 'rent-in-kind' which means that anything of any monetary value that the mother has given/exchanged for the right to live in the property would count as rent and thus create a legal tenancy. Think paying for repairs, updates to the building etc...

canaldumidi

As Slithery says above.

Mother is a licencee not tenant, and for purposes of the Housing Act is an 'Excluded Occupier' (ie excluded from the HA protections).

Children would be wise to comply with basic protection requirements though eg annual gas report, EPC, EICR and prompt repairing.

I'm sure they are aware of CGT implications. And insurance....

saajan_12

Did mum own the house before and gift it to the children, with the expectation she would live there for her lifetime? 
Or did the children get / buy the house from a 3rd party?

jm60owl

saajan_12 said:

Did mum own the house before and gift it to the children, with the expectation she would live there for her lifetime? 
Or did the children get / buy the house from a 3rd party?

The former. It was gifted to the three children about 20 years ago.

Keep_pedalling

jm60owl said:

saajan_12 said:

Did mum own the house before and gift it to the children, with the expectation she would live there for her lifetime? 
Or did the children get / buy the house from a 3rd party?

The former. It was gifted to the three children about 20 years ago.

Sounds like another dumb attempt to avoid care costs, only to lead to unforeseen consequences later on. Unless you still living with her you face a nice CGT bill when the house is sold, and may even be hit with IHT on the value of the house as it still forms part of her estate and her estate will no longer be able to claim the RNRB.

The LA are also likely to claim deliberate deprivation of assets of she ever needs residential care.

canaldumidi

As explained:

* licencee not a tenant, so LL regs don't apply though wise to implement most of them

* specialist insurance needed

* Capital Gains Tax if/when property sold

* Ineritance Tax if/when mum dies as it was a 'Gift With Reservation' (she retained right to live there) so it still falls within her Estate

* Local Authority will probably include it in her assets if assessing her for social care eligibility (Deprivation of Assets)

* Additional 3% SDLT if any child/owner buys another property

* Loss of any FTB benefits for the children

I know the above extends the focus of your question, but best to be fully informed!

getmore4less

jm60owl said:

saajan_12 said:

Did mum own the house before and gift it to the children, with the expectation she would live there for her lifetime? 
Or did the children get / buy the house from a 3rd party?

The former. It was gifted to the three children about 20 years ago.

Was that just mum or did dad gift some of it.
Was it outright gift or some trust structure.