Money Moral Dilemma: How much should I charge my friend who stayed with me after losing his job?

MSE_Kelvin

This week's MoneySaver who wants advice asks…

A friend lost his job and asked to stay at my place for two weeks. I agreed, as long as he contributed to household bills and food shopping when he got a new job as my costs would rise. He and all his belongings ended up staying for three months. My rent and bills come to £1,400 a month. Now he's back in work, how much should I ask him for? And should I ask for monthly payments or give him longer to pay?

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FlorayG

I think you should have agreed an amount when he moved in.

Now, if you want to remain friends, you need to work out how much extra he cost you and to ask him what he thinks is fair

Ms_Fluff

Depends how long you want them to stay. The more you charge, the more trouble they’ll have saving the money to find somewhere else, the longer they’ll be with you.

I had a mate live with me rent free, cos it meant he could save quicker for a deposit for his own place.

If this is a more long term agreement, look at how much space he’s taking, using communal rooms, utilities, food, etc.

Missy15

I would have thought you would have kept a running total of all your food bills etc over the last 3 months so that you can see where extra costs have been run up.

However you can work out the extra energy, and if being pedantic, water costs, incurred from last year's bills.

Assuming you declared your friend was living with you, even if only for a few months,your council tax will have increased, so he should pay the extra 25% charged if you normally live alone.

As far as food, cleaning stuff etc is concerned, again making an assumption, that you shared meals, 50% of that bill would be fair.

If he pulled his weight on cleaning etc, I think the above payments would be fair, and you wouldn't be out of pocket.

Your rent would not have gone up because he stayed with you, so I don't think you should make a profit from his misfortune, unless he gives you extra himself, you might need help yourself one day!

bikaga

If you asked for a contribution to household bills and food shopping upfront, why bring the rent into it now?

This is one of those "why don't you just have a nice chat" "problems". You had an arrangement, he's moved out now, time to discuss how much you've been spending extra and what he can afford and when.

BTB43

It's too late for all this. You should have asked him upfront for any extra money. It's not fair to ask him now, and if he's a friend, then you just did what friends do. Don't alienate him. Legally you're on dodgy ground anyway.

MS888

As I understand the post, the friend did stay for three months rent free whilst unemployed but has since found a job and moved out. The question is, how or what to charge him retrospectively. This is probably less of a moral dilemma and more of a pragmatic once.

In an ideal scenario, the unemployed friend would have been claiming all eligible benefits, including housing benefit. The two friends would have had a formal house share agreement (licence) (and assuming that the OP's landlord agreed to the same).The friend, as a lodger, would have paid rent out of his benefit (or had the rent paid directly by the DWP, depending on how the system currently works) and paid his 50% share of all the bills plus his own food out of his other benefits (e.g. job-seeker's allowance or equivalent). He would have had to find the money somehow if he was living elsewhere.

I'm assuming that this was an informal arrangement, so that makes it much more vague. How reliable is the friend and how good is the friendship? What does he think the arrangement was worth? Three months is quite a long time to lodge for free, with food thrown in, too. Were there any benefits to having him there? e.g. amazing cook/ lover/ DIYer.

The hard-line approach is to charge 50% of all rent and bills but it hasn't cost the OP that much extra and how much does each party value their friendship? The rent was not affected so they would need to agree between them what might be a fair gesture - anything from zero to half. The other bills would have been impacted to some extent but would not necessarily have doubled so, as another member has said, the OP could work out how much extra the friend has cost as a lodger and charge that amount.

As for how long to allow him to pay, we don't have enough information. Ideally, he should repay a lump sum or at least over three months, the same as the length of his stay. Is he in permanent work on a good salary or is he doing low-paid casual work? If his finances are tight, he may need a lot longer than three months to repay whatever figure is agreed.

If the friend is good for the money or if the OP can afford to write it off, then it's easy either way. However, if the friend is financially unreliable and the OP needs the cash, then it's a balancing act between an attempt to recoup the costs (which may prove unsuccessful) and the value of the friendship.

awm49

For future reference you can earn £7500 per year (£625) PCM from a lodger before you have to pay tax. You should have had a lodger agreement in place to formalise the arrangement, even with a friend. That would also allow him to then claim housing benefit while out of work. You can check the local housing allowance rates online - Search for Local Housing Allowance rates by postcode or local authority : DirectGov - LHA Rates. A quick check of the rates where I live would be £121.13 per week maximum for shared accommodation which converts to £524.89 per calendar month. I would have set it at the LHA rate for your area as it would not have financially disadvantage him in any way and given you an income boast. You could use that information to say this is what you would have paid if you had done so, and ask for that amount. The lesson is next time formalise everything.

Vonnie290875

Depending on their disposable income it could Still take a while for them to get on their feet again. You should have a conversation about what you think should be paid for and come to a mutual agreement.

I agree with them paying 50% of food bills but you should have agreed this and provided receipts. Also if you lost your single persons discount on the council tax I would hope they pay this.

I would not ask for monies to cover other bills especially not your rent as you would pay this regardless.

One day you may need support too, better to retain the friendship and be content that you helped a friend in need.

oldtrout

Absolutely hilarious! This is just another RIDICULOUS Money Moral Dilemma. Why did the friend lose his home at the same time he lost his job? Apparently, the OP agreed to let his friend stay for 2 weeks, contributing nothing until he got a job. Get a job within 2 weeks? Honestly, it's so funny, you couldn't make it up

TrixiePoodle

Had you asked your landlord for permission for your friend to move in?!