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Confusing situation - ownership and AST
ken_and_dot
Posts: 81 Forumite
This situation relates to a close friend of mine. Any clarification of the situation would be appreciated.
My friend and his wife paid cash for a second home to renovate. For reasons best known to them they bought the house in the name of their son. At that time he was single but now has a partner (they are not married). They want to make a home for themselves and have asked if they can rent the property. This has been agreed but the question is how do my friends control the tenancy. My friends thought they could let it to their son and his partner as an AST with both son and his partner signing the agreement, but as the son is the legal owner how would this affect the legality of the agreement. Also, who would sign the agreement as landlord. My friend thought he would, but as I pointed out to him, he is not the owner and therefore cannot be the landlord. I suspect that their main concern is that their son's partner is tied in to a legal agreement but just how they can do that under these circumstances seems obscure. I suggested that they lease the property themselves from their son and then sub let back to their son and his partner. that way they could sign as landlords and their son would legally be their tenant, but this seems a questionable and complicated solution. Any suggestions out there.
My friend and his wife paid cash for a second home to renovate. For reasons best known to them they bought the house in the name of their son. At that time he was single but now has a partner (they are not married). They want to make a home for themselves and have asked if they can rent the property. This has been agreed but the question is how do my friends control the tenancy. My friends thought they could let it to their son and his partner as an AST with both son and his partner signing the agreement, but as the son is the legal owner how would this affect the legality of the agreement. Also, who would sign the agreement as landlord. My friend thought he would, but as I pointed out to him, he is not the owner and therefore cannot be the landlord. I suspect that their main concern is that their son's partner is tied in to a legal agreement but just how they can do that under these circumstances seems obscure. I suggested that they lease the property themselves from their son and then sub let back to their son and his partner. that way they could sign as landlords and their son would legally be their tenant, but this seems a questionable and complicated solution. Any suggestions out there.
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Comments
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i would go to a solicitor and get a Deed drawn up - as it stands, there is nothing stopping the son and partner from living there rent free - the house is in his name - the dad needs some legal protection - families do split up and argue over stuff like this.....0
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The parents should have placed a charge on the property, to reflect their financial interest, as in the form of a loan. As it stands at the moment the parents have no "legal" interest, in the absence of any existing agreement between themselves & their son & relating to the property purchase. Perhaps this is an avenue that they can explore now?
They need to bear in mind that if the parents were to seek to become LLs they would then have to comply with all LL legal obligations, insurances, gas safety certs and keep appropriate records for HMRC purposes, as all rental income must be declared. Yes, if it was a member of your family living there , you'd want to do the right thing regardless of any legal obligations, but the added paperwork & regulation compliance is something to be added in to the equation. If they are only worried about the unmarried "DIL" having any future claim on the property, the son could always get the relationship off on a really good footing and ask her to sign a lodger agreement .........;)0
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