Advice needed: Lodger/Airbnb arrangement after bereavement

BryanTomson

Hi all,

Hoping someone might be able to point me in the right direction here. My brother and I have inherited our family home following our mum's passing and are considering the arrangement outlined below. We'd like some guidance on the legal side of things before we proceed.

Background: We sadly lost our mum very suddenly back in January. Probate has now been granted and we've inherited the family home. Our Mum had been running a very successful Airbnb on the top floor for years, and we're trying to work out the best way forward.

Proposed arrangement: We're considering having some close friends move in as lodgers on a rent-free basis to help with the situation. The arrangement we're thinking of would be:

• Friends live on the ground and first floors at no charge

• Top floor continues as Airbnb (as mum would have wanted)

• Utility bills split 50/50 between us and the lodgers

• Council tax to be paid by the lodgers (though not sure if this needs splitting?)

• Lodgers would welcome guests and be a point of contact, but we'd hire contractors to do cleaning and maintenance

Our reasoning: The property needs to be occupied ASAP to avoid the council tax empty property surcharge. I've got a young child and haven't got the time or energy to clear out decades worth of belongings - the friends we have in mind would likely be happy living around mum's things for now. We'd also like to keep the Airbnb running as it was mum's pride and joy, but we're not comfortable ethically with turning the whole house into a short-let, and I suspect there might be additional tax implications if we did. The house is very nice and in a beautiful location, so it would be a good deal for the lodgers.

What we need to know: Are there any legal pitfalls we should be aware of with this setup? In particular:

• The rent-free lodger arrangement

• How council tax should properly be handled

• Any implications for the Airbnb side of things, particularly regarding any recent changes in the law

Does anyone here have experience with similar arrangements or could flag any obvious issues we should be thinking about?

Thanks in advance for any insights.

Keep_pedalling

Your friends would be tenants not lodgers. Have you or your sibling any experience in being landlords? If not sell up. 

lincroft1710

The people occupying the GF and FF would be non rent paying tenants. A lodger is someone who rents a room in a house and shares some facilities with the householder e.g. kit and bath. Is the Air BnB subject to a separate non domestic rating or is it included in the CT of the house

Albermarle

As said, if you do not live there yourself, they can not be lodgers.
They would have to be tenants and have a legal contract, which brings in a lot more issues.

Archergirl

Might be easier just to sell and split the money, that sounds like a lot of faf and an accident waiting to happen.........

BryanTomson

Thanks for your reply.

There's a number of reasons why I don't want to sell but one is that my Dad also died recently and he left us a property in the same town, which has been on the market for ages, not selling and costing us lots in council tax. Estate agents are now advising us to look at renting that property because the market's so bad(!)

 Archergirl said:

Might be easier just to sell and split the money, that sounds like a lot of faf and an accident waiting to happen.........

Please could you elaborate on "an accident waiting to happen"?

mr_stripey

I think you need to leave the emotion out of it , i.e the airbnb being your mum's pride and joy - whilst I'm sure that is true, unfortunately she is not around any more. I really don't mean that in a horrible way - i've lost both my parents so I do understand. But their wishes are not my wishes

I'm not an expert but becoming a landlord without the necessary knowledge and experience is a tricky old process. If the rental isn't going to be your pride and joy then sell up and enjoy the money

BryanTomson

mr_stripey said:

I think you need to leave the emotion out of it , i.e the airbnb

it's more about the money tbh but thank you

lincroft1710

BryanTomson said:

Thanks for your reply.

There's a number of reasons why I don't want to sell but one is that my Dad also died recently and he left us a property in the same town, which has been on the market for ages, not selling and costing us lots in council tax. Estate agents are now advising us to look at renting that property because the market's so bad(!)

 

I'm surprised the EA hasn't suggested reducing the price down to a very attractive level.


Renting out doesn't solve the problem. You will still have to sell the property at some time possibly with a CGT bill on top and in the meantime have the the dubious pleasure of being a landlord

JGB1955

I ended up selling my father's house for 16% less than the asking price.  That offer was after 6 months of being on the market.  At the time accepting the reduction was hard but (in retrospect) the relief was immeasurable.  Moving on can be cathartic!

Archergirl

BryanTomson said:

Thanks for your reply.

There's a number of reasons why I don't want to sell but one is that my Dad also died recently and he left us a property in the same town, which has been on the market for ages, not selling and costing us lots in council tax. Estate agents are now advising us to look at renting that property because the market's so bad(!)

 Archergirl said:

Might be easier just to sell and split the money, that sounds like a lot of faf and an accident waiting to happen.........

Please could you elaborate on "an accident waiting to happen"?

People fall out, even friends and family, things can happen unexpectedly and it's worse if it's people you are friends with or related to.