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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:
Viviennemary · 28/07/2013 21:32

Sorry cross post.

Cravey · 28/07/2013 21:42

You have to suck it up don't you ? Legally you've not got a leg to stand on. You know that. I think you need to tell your dh ASAP. He is probobly going to rant but not a lot he can do is there ? Maybe next time do it properly. Ad spare a thought for the chap who is ill.

Jan49 · 28/07/2013 21:43

It sounds like he's actually given you a month's notice, just not a month starting on 1st, and as there's no contract I don't know if you can legally insist on a month from 1st anyway. Surely you are in the same position as you would be in if he'd given you notice on 1st? You have one month to sort out a new tenant so you're financially no worse off than when any tenant gives notice and leaves.

People don't stop needing a home when they need a serious operation, so I assume he's in a job where he won't get paid and is maybe moving back in with his parents? He could easily have left his belongings in the flat and defaulted on the rent, so it sounds like he's being quite helpful. My first thought on finding out I needed major surgery would not be to move house!

You need to sort out renting it out legally. You seem to have been very naïve if you really thought being paid in cash once a month was just keeping things simple and hassle free. You need to check if your mortgage company will allow you to rent it out and obviously if you haven't sorted out your buildings and contents insurance properly you need to.

YouTheCat · 28/07/2013 21:45

Glad you've had a chat with your dh and he's okay about it.

I know the market is slow but I totally agree with you putting it on the market. Sounds like a whole load of trouble otherwise.

Original poster
pictish · 28/07/2013 21:45

We really didn't intend harm. We rented a flat from a friend in this way for three years before we started a family. It worked well, and we thought nothing of it. We weren't on the make in any way. Any on the making is purely coincidental. There was certainly no profit in it...we didn't seek it.

Anyway I have texted him 'No worries xxxx - we wish you only well. The very best of love and luck. xx'

Now we are discussing estate agents. We want rid of the flat asap. We are not interested in going official and becoming landlords. I knew we'd have to pull our heads out of the sand eventually, and we have.

I appreciate the advice from everyone.

OP posts:
hermioneweasley · 28/07/2013 21:50

Hope it sells quickly Pictish

Monty27 · 28/07/2013 21:56

You probably should have been charging a little more to have a residual amount for this sort of circumstance.

I hope your friend's brother recovers well. However, in the meantime, just be her friend and don't hound her db for a few quid Hmm

Original poster
pictish · 28/07/2013 22:00

Thank you. We will put it on at a tempting price, in order to get rid.
Property moguls we are not.

OP posts:
Goooooooooooooooooooooood · 28/07/2013 22:06

That was a gracious result OP. Smile. Hope everything works out.

Monty27 · 28/07/2013 22:08

Sorry Pictish, cross post.

You sound very fair :)

Beastofburden · 28/07/2013 22:09

Don't worry too much about tax. Iirc, the last three years of ownership is tax exempt. So you will just owe tax on one year out of all the years you have owned it. In any one year, you and dh both have a capital tax gains allowance of £10k on top of your personal income tax allowance, and you can carry forward the unused allowance from the previous year. So, assuming you have no other capital gains, you can have a gain of £40k relating to just that one year, before there's any tax due.

disclaimer I was a tax adviser once but it was ages ago, am out of date and anyway tis unprofessional to offer you advice without knowing your financial position, so this is just general reassurance and you should check it out on the HMRC website for yourselves.

countrymummy13 · 28/07/2013 22:11

Without any written contract I don't think you have a leg to stand on.

You need to just accept that this is the flip side to not paying a solicitor for a proper contract, not paying for landlords insurance (I'm guessing) and not declaring the earnings to HMRC (guessing again).

YouTheCat · 28/07/2013 22:13

Don't you just love it when people only read the OP and none of the subsequent posts, even the ones on the same page? Hmm

Beastofburden · 28/07/2013 22:13

Tax on the rent is another matter, I mean tax on the sale...

stiffstink · 28/07/2013 22:14

Glad its sort of sorted.

We've had our flat for 8 years, rented for half that time. Neighbour tried to sell for two years, not a sniff.

Being a landlord isn't what we intended but it was our only way out.

Shesparkles · 28/07/2013 22:18

Hope you get a quick sale Pictish. I certainly wouldn't criticise your for what you've done, sometimes some posters on here need to get their knickers untwisted and stop looking for the bad in a situation where there's none, and none intended

Original poster
pictish · 28/07/2013 22:38

Thanks sparkles. And beastofburden for the advice. x

I just want to add...I said earlier in the thread I thought dh would insist on the guy paying. I was already thinking no, and was worried I'd be caught between a rock and a hard place.
I was wrong...it was quite the opposite. He was lovely about it.

Let's hope the chap's surgery goes well and the outcome is positive. He is a really nice man from a brilliant family.

OP posts:
Joanne279 · 28/07/2013 22:46

I agree its a bit crap but I think the best you can do is make the most of a bad situation.

Learn from your mistakes and ask any future tenants to pay one months rent as deposit so if this happens again, you've covered yourself.

I think considering his surgery you may come across as insensitive if you push for the rent. I don't think you're being unreasonable in requesting a months notice, but under the circumstances I'd let it go but be more prepared with future tenants

maja00 · 28/07/2013 22:53

You've presumably saved a bit of money doing things under the table, and you're only missing out on a month's rent, and he is sick - I'd let it go.

Tuppenceinred · 28/07/2013 23:03

FFS I wish people would read Op's updates before posting!

HoratiaNelson · 28/07/2013 23:07

It really irritates me when people give "legal" advice when they don't have a clue what they're talking about...not having a written contract, doesn't mean there isn't a contract and it doesn't mean there isn't a tenancy on the property - which either of you could enforce - it's just harder to prove. If it looks like a tenancy and smells like a tenancy, then ta da! It is one, whether you have anything in writing or not. Signs what you have is a tenancy are: rent is payable of an agreed amount, at an agreed regular date, for a specified period (in your case appears to be monthly), and the tenant has exclusive possession - in other words whoever is renting the flat has the right to keep you out.

It is not a problem that there is no deposit protected - if you take no deposit there's nothing to protect...

In other words, you could quite legally hold him to his notice period of one month (which is the statutory period of notice for a tenant with an AST, which is what he has, written contract or no written contract, as the default tenancy when unspecified) and pursue the final month's rent.

Having said that, sounds as though if you do, you risk your friendship with his sister - you have to decide whether it's worth that.

Original poster
pictish · 28/07/2013 23:16

Not in a month of Sundays.
I just thought 'fucking shiiiiiittt!!' temporarily, that's all.

OP posts:
HoratiaNelson · 28/07/2013 23:17

Apologies for grumpy post before reading whole thread Blush

Glad you've decided what to do Pictish

Tuppenceinred · 28/07/2013 23:19

I'm pleased you've come to a conclusion about it Pictish.

HoratiaNelson, there were however some aspects of this letting that were illegal, and so regardless of the standing of the tenancy, the tenant could potentially cause Pictish and her husband some difficulties if things got nasty. So to decide to pursue him for the money, regardless of eithical considerations and family connections, could have been risky.

Beastofburden · 28/07/2013 23:23

Good luck Pictish. You may have a slight residual problem on the undeclared income front. If the tax man comes asking, get yourself some professional tax advice pronto, because what it costs you in fees you will save in aggro and probably tax as well.

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