Renting a house from parents

airwot4

My parents inherited a house and aren't having much luck selling it with the current housing market. They've decided to let me and my girlfriend move into it once she's finished uni. They don't necessarily want rent paid to them because they're worried about any implications as this would give us a legal right to be in the house etc.

What would the implications be of paying rent to my parents? Would we have to have a rental agreement; as I get on well with my parents would we need to? Although I can't see this happen, my girlfriend would be paying for the rental aswell, so would she have any claim to stay in the property if we broke up (could she stay there for a certain term after being given notice?) Would this still apply if I technically paid the rent and she paid for food?

Another question, partially related. If we decided to buy the house could my parents sell it to me for below the stamp duty threshold and I could make up the extra money with a different transaction?

airwot4

Any advise?

Elliesmum

Hi there

I can't answer the letting question, however I sold my last property below the stamp duty rate and then my buyer made up the difference for the fixtures and fittings. But as I understand it you must be careful that you are not charging too much for the fixture and fittings.

Good luck xx

CLAPTON

If you / she pay rent then there needs to be a rental agreement ... a shortterm tenancy would probably be ok.
After the initial period (often 6 months ) then one month notice can be given by either party.
Your parents would of course declare the income for tax purposes.

Your parents can sell the house to you any at any price but the stamp duty is paid on the proper valuation.... declaring it otherwise is fraud and a criminal offence.

poppysarah

A proper rental agreement gives you less rights to the property than not paying rent.

PasturesNew

What would the legal situation be (with regards being hard to chuck out) if the parents employed the OP for £1/month as a Caretaker/Housesitter?

I figured it must be my turn to come up with a mad scheme .. it's usually the domain of first posters. But I wanted a go.

tbs624

Your parents should get qualified legal advice for this one. You can ask a solicitor for a Fixed Fee appointment for initial advice before deciding what to do.

What if they wanted/needed to sell the property at a later date and you & your GF had unfortunately split up, but she wanted to remain in the property? However close you are to your parents there is also the possibility of a future dispute between you and them, so both sides need to have their interests safeguarded.

Who will be responsible for insurances, maintenance, gas safety etc?

A Tenancy Agreement cannot take away your legal rights - it may however add to them. You could alternatively agree a Licence to Occupy, which gives you and your GF fewer rights: you are merely given the owner’s consent to live there and neither of you would gain any legal interest in the property.

On the Stamp Duty issue see here http://www.hmrc.gov.uk/so/sdlt1-sample.pdf for a copy of the Land Transaction Form that has to be sent by your conveyancer to the HMRC - until it’s been scrutinised by them the Land Registry is not updated and the taxman has a good 9 months (I think) to trawl though it to catch you out under “apportioning".

clutton_2

if your parents are happy to rent the house to you - even for £1 a week - then go to a letting agent and do it properly - a well constructed tenancy agreement will protect both parties.

tbs624

clutton wrote: »

........ go to a letting agent and do it properly - a well constructed tenancy agreement will protect both parties.

Just a reminder that LAs don't have to have any particular expertise, training or qualifications before they set up - so if you want a well-constructed TA go to a legally-qualified professional rather than your local Letting Agent.

:

mlz1413

by renting with a AST then you and your girlfriend have a right to be there and a committment to pay rent, so both parties have terms of agreement set out. good stationary suppliers (inc WH Smith) sell an AST buy one and read it through it will help both parties understand what they do and don't agree to. If your still not sure or just want to be double sure then go to a solicitor.

Re the tax implications if your parents rented to you for say £500pm they could then spend this on the house to re-new things like the carpets.

airwot4

Thanks for the answers everyone, all very helpful .