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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

to be absolutely flummoxed as to what to do here! Moral dilemma.

137 replies

pictish · 28/07/2013 20:31

This may come over a bit dull and complicated...I would appreciate the advice of anyone who can be bothered to read.

Dh and I own a flat in the city. We live in a small town outside. The only reason we have the flat still, is because the housing market is dead. We'd sell it tomorrow if we could.

So we rent it out. So far, all our tenants have been friends, or friends of friends. We charge the minimum rent - just to cover the mortgage and no more. We don't make any money out of it at all. Therefore, the rent is really cheap. We don't even take a deposit.
We take the rent in cash on the 1st of the month to keep things simple and hassle free. The conditions are that we need one month's notice to quit.

So...my friend's brother has been renting it for the last year or so. On 11th July he texted me and said he was moving out on the 15th Aug, and would give me the 'remaining' rent on the 1st as usual. I asked him what he meant by 'remaining' and he said he meant half a month's rent, as he was leaving on the 15th.
I explained to him that the flat, like any other, is rented by the month, not the week, and that I would be expecting a full month's rent...even if he chose to move out early.
He didn't sound happy, but he agreed.

Now I have received another text...it says this...

"Hi - I have to let you know that I have moved out this weekend. As I have been told I have a tumour in my spine and I need an emergency operation so I will be in hospital a lot over the next couple of weeks/months. So I need to move out right away as I have no other alternative. I will get my mum to hand over the keys to you asap so you can get the flat rented out soon. Thanks again for letting me stay there."

His sister is a friend of mine. I saw her yesterday and she did mention the discovery of a tumour. We were all Sad about it, of course. No one knows if it is sinister or not yet. You can imagine what they are all going through can't you?

However...in my world, we are fucked financially because I think he is proposing to not pay any more rent.

Wtf do I do??

OP posts:
Turniptwirl · 28/07/2013 20:44

When you rent it again you need to have a deposit to cover things like this and charge slightly above the mortgage cost, putting the rest aside to pay for any repairs etc on the flat.

And I really would at least look into doing it all properly and legally.

GuffSmuggler · 28/07/2013 20:45

We have flat that we have managed to let in one day before, there is such demand for rental property in our area. I'd ring some estate agents first thing tomorrow and see if you can get someone in this week, could be possible.

I know you say you don't want the 'hassle' of renting it out properly, but I promise you it's much less hassle doing it the proper way.

You pay a fee to the agent and they will organise deposits, references, inventory etc. so you are legally protected and you can still 'manage' the flat yourselves so not to incur extra fees. You can also charge top rent to cover the cost of the agent fee.

I think you're just going to have to take this hit with this chap as nothing is formal and see it as lesson learned...

Original poster
pictish · 28/07/2013 20:46

That's it less.

We have been very informal and whatnot, yes. We just wanted to keep things as simple as poss. The tenant got a great flat for very cheap rent, and we had the place occupied and the mortgage paid. We have been doing this for four years without a hitch.
We ourselves used to rent a flat in the same fashion, years ago.

I always knew we'd come a cropper doing it this way eventually, and I was right. Now to tell dh. Aaaarrrgghhh!!

OP posts:
WireCat · 28/07/2013 20:46

Oh no :(

What a horrible dilemma.

I think you can't ask for the rent, under the circumstances really.

Can you get someone in ASAP? From what I remember the flat is in quite a central location.

It is a bugger about the money though for you x

RatUpADrainpipe · 28/07/2013 20:47

I'd ring some estate agents first thing tomorrow and see if you can get someone in this week, could be possible.

Are Estate Agents THAT willing to let people rent through them and go into an illegal flat with their blessing?

Goooooooooooooooooooooood · 28/07/2013 20:48

I think this is tricky but I think it is ok to still ask for the money. Obviously it is a worrying time for him but it is still not right to put you in a difficult financial position.

I would text/email and say that you are sorry to hear the news but that you still have to have your rent as you are relying on it. I would keep the text short and to the point. Something like,

^So sorry to hear your news, it must be very worrying for you.
I would be grateful if you could arrange to pay the outstanding rent of £xxx within the next few days as we are relying on the money. Kind regards Pictish^

I would let him know ASAP

I think that is what I would do Confused

Shamoy · 28/07/2013 20:49

You are renting the flat out illegally/un officially so you have no come back to your tenant not giving you official notice really. You are very lucky that you haven't been shafted before by someone who actually takes advantage of your dodgy position. This situation now, although unfortunate is due to genuine sad circumstances.
I'd say you were a bit tight to say a calendar months notice rather than the month he originally gave you as notice (I say that as a landlord!)
You have no way of chasing this money legally or morally so don't see any dilemma here, only a cash flow issue that you will need to resolve any way you are able to

Tuppenceinred · 28/07/2013 20:49

You are being very naive and have been very lucky. Be thankful that you haven't ended up with someone sitting in the flat refusing to move out. You have legal obligations as a landlord, for example annual gas safety certificates. As a landlord myself I recommend that you do this properly next time, get a reputable letting agent involved who will make sure that you meet your legal obligations. Either take out landlords insurance to cover you for "void periods" when you have a contract in place but tenants aren't paying, or choose a slightly more expensive letting agent that includes this.
I'm afraid you're going to have to wave this missing rent goodbye.
Hopefully a more realistic rent will allow you to build a contingency fund, because you will need it. Rent-free periods are a fact of life when you're a landlord!
Maybe once you've got more of an idea of what letting property involves you would decide to take it over yourself, using a proper letting agreement and understanding things like Section 21 notices, and safety certificates etc.

GuffSmuggler · 28/07/2013 20:50

It won't be an illegal flat once the estate agents have drawn up contracts, got deposits and references etc. though?

The onus will then be on the owners to declare the rent as earnings which I'm sure they would do once making everything official.

neepsandtatties · 28/07/2013 20:50

It will take a while to let it 'legally' as you will need to have all the gas/electric/furniture inspections and certifications.

Nerfmother · 28/07/2013 20:51

Well really you can't so anything can you? Because the consequence to you will be far worse than you forcing him to pay the additional rent:
Mortgage t and c - are you allowed to rent?
Hmrc - undeclared rental income, and even if it is nil, no tax returns showing it
And potentially loads of others- council tax, utilities etc etc?
Any benefits you claim ( apart from child benefit) - interplay between these and rental income
Selling the flat _ capital gains tax as its not your main residence?

zoobaby · 28/07/2013 20:51

I'd take this as a lesson that you need to do things more officially. HMRC need to be informed of your extra earnings. Your mortgage provider needs to know as there are different rates for buy to let, and they probably also need to give permission for you to let it in the first place (after all the bank owns it more than you do). What about insurance? It will be invalid if you don't declare it's tenanted. Also think about public liability insurance and gas safety. You don't want to lose absolutely everything due to it being "easier".

Tuppenceinred · 28/07/2013 20:51

"Are Estate Agents THAT willing to let people rent through them and go into an illegal flat with their blessing?"

An illegal flat? It's not an illegal flat. The agents would leave it to the landlords to assure themselves that any permission to rent had been obtained. All they'll want to do is inspect the property and get a gas safety certificate done (I've paid between £50 - £75 for that, depending on location).

primallass · 28/07/2013 20:51

I think that unless you made it crystal clear that by 1 month notice you meant from the 1st of the next month, then he gave you 1 month (11 July-15 Aug).

Rent it properly and try to make a little profit.

GuffSmuggler · 28/07/2013 20:52

You could do it in about a week.

mameulah · 28/07/2013 20:52

Chase him up for it, you never know you might get some money.

If not then forget about it and move on. And take a deposit next time!

HollyBerryBush · 28/07/2013 20:52

I know this is a bit prissy - but every day on these boards people are banging on about benefit cheats and people who dont pay their taxes. Thats 4 years of undeclared income you haven't been taxed on.

Vatta · 28/07/2013 20:53

I don't see what's illegal about what the op has done? She's said there is no deposit, so the deposit protection scheme is irrelevant, and there's no requirement to havd a written contract.

It sounds like the tenant would have an oral periodic tenancy, the terms of which were that rent is paid on the first of the month and therefore there's a legal assumption that notice to quit can be given on the first of the month, with the tenancy ending one month later.

Legally I think the renant's responsible for paying the rent but the question will be how much you want to push for it at a difficult time.

I'd suggest you google for info on the periodic tenancy, email a link to your former tenant and say that while you are sorry for the position he's in, legally he is obliged to pay the remaining rent for the month of August.

You are obliged to act reasonably and try to find a new tenant ASAP, and if you do find somebody in august you'd be obliged to return a portion of the former renant's rent.

Hope that helps.

foreverondiet · 28/07/2013 20:54

You try and recover the rent by charging the next tenant a little more and you feel thankful that you are healthy... Yab v v v u.

Goooooooooooooooooooooood · 28/07/2013 20:55

Buy to let mortgages are more usually more expensive that residential ones - the OP may have been unwittingly defrauding the mortgage company.

Sorry, if already mentioned.

Montybojangles · 28/07/2013 20:55

Take the hit. You are renti g it out on the sly, does your insurance even cover this if your mortgage company aren't aware?

This post has a lot of identifiable info in. You may find yourself reported to the tax man, or someone may identify the poor man and his family from this post.

PrettyKitty1986 · 28/07/2013 20:55

You wbvu to expect him to pay on 1st August rent to cover to the end of Aug when he was moving out on the 15th (and had given you enough notice).

When df and I rented a flat, we gave notice in November that we would be moving out on 7th Jan. On the 1st of Jan we payed one weeks rent. Had the LL asked us to pay rent to the end of Jan I would have laughed at him. That is not the way things work when renting property - there is not some unwritten rule that you rent in full calendar months only Hmm

Tuppenceinred · 28/07/2013 20:55

p.s. If you let it furnished you will be obliged to replace any fittings that wear out or break. That's why many landlords rent unfurnished, with the basics in place - cooker and sometimes other white goods.

The tenant is legally responsible for notifying utilities providers and the council that they are in residence, but the agents should deal with that - just make sure they do. (If a tenant defaults on a utility the landlord is not responsible, they are).
Agents will advise on appropriate insurance.
Your call if you notify the mortgage company. On two residential mortgages I didn't have any difficulty getting permission to let, just took a phone call.

The only safety certificate needed legally is a gas certificate, I get an electricity check done every couple of years.

Original poster
pictish · 28/07/2013 20:57

It's unfurnished.

OP posts:
Tuppenceinred · 28/07/2013 20:57

I wouldn't pursue this ex-tenant for the money for one reason - it was illegal to rent the flat without a current gas safety certificate. I'd rather loose a couple of weeks rent than deal with the consequences of him reporting that.
Oh, and I'd also advise you to look up a landlord's forum and join that for advice. You'll get a mix of fact and fictional advice here.