Can't afford house any more - what to do with lodger/tenant?

Badger_Lady

Hello!

I've had my house for 16 years now and my fun renting to different lodgers is well documented on this forum 😂

In 2019 I had an opportunity to move overseas and my lodgers at the time had decided to move on, so I got out my DIY kit and did the place up for sale.

In February 2020 I accepted an offer but - uh oh! - we entered a pandemic and the buyers pulled out.

I was also in financial trouble and couldn't afford to keep paying for an empty house, so was delighted when my next door neighbour called me to say she had two friends whose rented home was being sold and needed a place to stay.

I got in touch with these two guys, had a friendly chat, agreed an all-inclusive rent per person that would cover the mortgage interest (interest only) and bills, and they moved in. I used the same Houseshare Agreement I always have used in the past... I genuinely didn't know if I would be back - it's my registered address in the UK, I pay the council tax and my bedroom is still full of my stuff, but pandemic.

They were really happy with the place and said they wanted to stay long term, so I gave up on selling, instead happy to give them some security.

Then the prices of things started going up. First the bills went massive, then the mortgage interest started to creep up. I asked them to start paying more, but not all of it - my income was more secure by now so I helped cushion the blow by paying some of the extra myself.

But prices kept rising and soon I was paying over £400 a month - my savings finally wiped out and I just couldn't afford that much from my salary, so I asked the lads what they wanted to do - pay more, get a third lodger in or move out so I could sell?

One of them moved out really promptly so I put the house on the market. I told the other one he could stay at his old rent until it sold, and gave him an official eviction notice ("reasonable notice" for a houseshare) so he could request help from the council. After 10 days on the market I accepted an offer, albeit a low offer from an investment company, which will release me from the unaffordable payments.

All seemed fine, but now the remaining lodger is panicking about becoming homeless. He's spoken to the council and they've said that they won't be able to help unless I'm registered with Rent Smart Wales as a landlord of an Occupation License, and they've talked about him having the right to stay on for six months.

Now, morally I've tried everything I can to be kind and to help him out for the last three years, so it hurts to think he might try something that's going to seriously screw me over. But I can also perfectly understand his panic if he doesn't think he can find new housing. I absolutely do not want to see this man out on the streets! And I do not have any money (literally zero savings) to support him any longer.

Any advice?

stuhse

Ask your next door neighbour if she could put up her friend ?

Badger_Lady

She shouldn't have to though..? She lives with her family and although I'm sure she could offer her sofa in an emergency the man needs an actual home 😔

Teapot55

Clearly it’s not going to be exactly the same in Wales as it is in England but it’s likely that, similar to England, certain processes have to be followed before the council is allowed under the rules in place to help someone facing having to move out of their rented property. 

It won’t be personal, just the rules. 

Doesn’t help the financial situation of course. 

Voyager2002

How quickly could you register with Rent Smart Wales? Not only would this apparently entitle your lodger to some help, it would also establish that you have given him a License rather than a Tenancy.

Now, if you need to use the law to evict him you might face very hefty legal costs (there seems to be some doubt as to whether or not it is still your private residence, and as to whether or not there is an Assured Shorthold tenancy), while you could well have to wait for months for a date for a court hearing.

The alternative: move back into your old house to make it very clear that it is your home. In this situation the tenant loses virtually all legal protection and you can then change the locks or take other non-violent action to remove him with only a few days notice.

Two suggestions: since you have agreed to sell to an investment company, ask them whether they would still go ahead with a tenant in place and see what they say.

Or (better), have a look on the website Spare Room, discuss with the tenant which options there might be suitable and make it clear that you are willing to provide money and other assistance to help with his move.

Badger_Lady

Voyager2002 said:

How quickly could you register with Rent Smart Wales? Not only would this apparently entitle your lodger to some help, it would also establish that you have given him a License rather than a Tenancy.

Is this right though? My understanding was that 'license' is just the new terminology for 'tenancy' and that by registering I would basically be converting the contract to an AST.

I don't think it's worth asking the investment company whether they'd take on a tenant who only pays one-third of the rent... they will also be concerned about the cost of removing him.

So I guess I just have to go hang out at my house for a bit..? And make sure I'm there on the scheduled eviction day. I don't feel great about that, but if it means he can get support...

propertyrental

Not sure about Wales, but sounds tome like these are not lodgers. They are tenants.

You are not living there (as  understand it). You are overseas and they have exclusive occupation.

The fact that 'all your stuff is there' is probably irrelevant, as is the fact that you pay the council tax.

But check the Wales rules.

unforeseen

I think once they were in the house and you living elsewhere it became a tenancy regardless of the fact that you left behind a bedroom full of stuff

Badger_Lady

unforeseen said:

I think once they were in the house and you living elsewhere it became a tenancy regardless of the fact that you left behind a bedroom full of stuff

Yeah, I do understand how that likely applies from a legal standpoint. I just never wanted to get into a legal situation - this was a casual arrangement as a temporary solution to suit friends of friends. I could be maybe £15k richer if I hadn't subsidised him all that time and ended up selling in a desperate situation.

I genuinely respect laws that protect the rights of tenants and value the right of every person to have secure housing. I never wanted to be a landlord, I was just doing a favour and now it seems the law may turn on me for that.

I genuinely have no idea what would happen if this was ruled an AST - house gets repossessed by the bank I guess..? And I end up in debt with no path out.

Badger_Lady

propertyrental said:

Not sure about Wales, but sounds tome like these are not lodgers. They are tenants.

So, who does this help? If we all agree that they are lodgers, my one remaining lodger has his eviction notice and can surely get help since he's going to be made homeless within 56 days.

If there is a dispute and somebody decides they're actually tenants, who does that benefit? I have already stopped paying the mortgage, there's no way he can stay - we have a complicated legal battle and everyone goes bankrupt?

_Penny_Dreadful

Badger_Lady said:

Hello!

I've had my house for 16 years now and my fun renting to different lodgers is well documented on this forum 😂

In 2019 I had an opportunity to move overseas and my lodgers at the time had decided to move on, so I got out my DIY kit and did the place up for sale.

In February 2020 I accepted an offer but - uh oh! - we entered a pandemic and the buyers pulled out.

I was also in financial trouble and couldn't afford to keep paying for an empty house, so was delighted when my next door neighbour called me to say she had two friends whose rented home was being sold and needed a place to stay.

I got in touch with these two guys, had a friendly chat, agreed an all-inclusive rent per person that would cover the mortgage interest (interest only) and bills, and they moved in. I used the same Houseshare Agreement I always have used in the past... I genuinely didn't know if I would be back - it's my registered address in the UK, I pay the council tax and my bedroom is still full of my stuff, but pandemic.

They were really happy with the place and said they wanted to stay long term, so I gave up on selling, instead happy to give them some security.

Then the prices of things started going up. First the bills went massive, then the mortgage interest started to creep up. I asked them to start paying more, but not all of it - my income was more secure by now so I helped cushion the blow by paying some of the extra myself.

But prices kept rising and soon I was paying over £400 a month - my savings finally wiped out and I just couldn't afford that much from my salary, so I asked the lads what they wanted to do - pay more, get a third lodger in or move out so I could sell?

One of them moved out really promptly so I put the house on the market. I told the other one he could stay at his old rent until it sold, and gave him an official eviction notice ("reasonable notice" for a houseshare) so he could request help from the council. After 10 days on the market I accepted an offer, albeit a low offer from an investment company, which will release me from the unaffordable payments.

All seemed fine, but now the remaining lodger is panicking about becoming homeless. He's spoken to the council and they've said that they won't be able to help unless I'm registered with Rent Smart Wales as a landlord of an Occupation License, and they've talked about him having the right to stay on for six months.

Now, morally I've tried everything I can to be kind and to help him out for the last three years, so it hurts to think he might try something that's going to seriously screw me over. But I can also perfectly understand his panic if he doesn't think he can find new housing. I absolutely do not want to see this man out on the streets! And I do not have any money (literally zero savings) to support him any longer.

Any advice?

You're lucky one of them moved out as what you had were tenants, not lodgers, regardless of the contract you got them to sign.  The property clearly isn't your main residence as you do not reside there.  This means that when they moved in back in 2020 an Assured Shorthold Tenancy was created and you should have registered with Rent Smart Wales.  Then due to a change in legislation the AST became an Occupation Contract as of 1st December 2022.  As the landlord you were to required to provide updated terms to the tenants no later than May 31 2023 so that ship has now sailed.

Your best hope that the tenant manages to find somewhere else to live without the council's help.  However, if that isn't possible and the council starts assisting the tenant with his current situation then you're going to find it very difficult to legally evict him.  This won't be the tenant screwing you over, this will be a situation of your own making by not doing things properly.