Friends asked to rent to buy house!

[Greedypeopleithink]

Okay so DH close friends occupy one of DH flats. We reside in the other. Flats are part of one building. DH asked if they wanted to buy both flats as we were looking to buy bigger house. They said no and DH did not put flats up for sale because friends wanted to remain in the flat.
Fast forward 18 months.
DH and i purchased broken down house. Under full renovation. Dh friends ask if they can now buy both flats, but they want to pay for the flats on a monthly basis!! So basically rent it for the next 20 years and the own it once they have paid the value of both flats off!! I am seething. DH said no. He is very close to the friend. More like family for him. N the flats were purchased by DH before marriage etc. I just think had they bought it before or not guilt tripped us into not selling to someone else, we ciuld have bought our dream home. Instead we are going through stress of renovation and in 10 years will aim to buy house we wanted all along. I am so angry. AIBU? After all DH bought the flats before marriage so can do what he wants really. Also cherry on the cake was DH friends son saying “when you move out, i can deliver my art classes from ur flat” and the boys father said “yh good idea”. Dh is a soft touch n will prob agree until he gets tenants in there. Wat pees me off is this entitled attitude. In the past i have mentioned my views to dh but he thinks i am greedy! We are mkn ends meet and his friend is very rich by comparison. On a locum doctor salary!!

They have multiple properties with mortgages. High salary over 100k. Just not cash rich

I wouldn't make too many assumptions about their cash position TBH. There's nothing wrong with being property speculators, but that's what they are and now they've seen a way of getting another one on the cheap via an effective interest free mortgage from you

Well done to your DH for saying no

Also, the idea of a family member contributing a huge chunk of equity to a property purchase, even buying it outright, then acting as 'banker', charging little or no interest, to family members, really is very normal.

Yes, I know siblings that do that. The agreement is that the sibling in the house will pay enough rent to cover the mortgage and then if the house is sold they can have the equity. Either that or the house will be transferred to them once the mortgage is paid off.

Only read first bit.
Same happened to me.
Family member wanted to rent flat from me but it would be 'like a mortgage' so in the end they would own it.
I said why the fuck would I do that.

Totally out of order.

I owuldn't have compromised on your current house to be some kind of charity to aid friends. I would just have sold the flats then. However now that they have offered to buy them I would serve notice to quit and sell both flats immediately and ues the money for something etc eg paying loan off your new run down place or buying a new separate buty to let somewhere even if that makes sense once stamp duty is taken account of on a new purchase.

I’m guessing they pay minimal rent and after a few years of continuing to pay this low rent, while your DH pays the service charges etc, suddenly “voila” own the flat!

Don't be the bad guy by disagreeing with your husband's misguided loyalty to his friends. Encourage him to speak to a solicitor about the best way to proceed. Let the solicitor point out how it's a ridiculous suggestion, and advise on the best way forward.

You've got a DH problem not a CF friend problem. If you wanted to buy your dream house you should have sold the flats! Why are you appeasing the friends and suffering yourself as a consequence??

Apologies for being so blunt but your DH is an idiot. Friends or not it would be beyond foolish to agree to the arrangement they have suggested. I can foresee all sorts of problems that could occur in the future, none of which will end favourably for him (and by association you).
However your OH likes to see it, he needs to look after his and your interests here and the only way he can do this is by either continuing with the current arrangement and charging them rent until they choose to leave, or he gives them notice and put the flat(s) up for sale. If they want to buy they can then apply for mortgage like most people do.
If your OH agrees to what they are currently asking for he may as well have the word mug tattooed on his head.

But obviously the 'bank of mum and dad' model that your DH's friend wants from your DH, makes sense where the parents have lots of capital available, the children have none and the parents have a vested interest in their own children and often GCs having a nicer home than they could otherwise afford at this stage in their lives.

Those criteria don't seem to apply here.

Their obvious thinking
"I'd like to spend my money on buying another house to add to my property portfolio. Trouble is this will leave me no money to be able to pay my rent to my friend. Never mind they'll let me live rent free for a year and in the meantime my own newly purchased house will have increased in value. Great plan.
Oh and while I'm at it, I might as well ask them if I can continue paying my normal rent but that I actually end up owning the house after some years. Why not ask them that. They fell for my last wheez."

Your dh is being taken for a mug

They have multiple properties with mortgages. High salary over 100k a year. Just not cash rich.

I don't understand how your DH doesn't realise he's being taken for a total mug. They could move into one of their properties but your DH allows them to change all your plans because they don't want to move out? And then he lets them live there rent free whilst his own family suffers financially? And he dares to suggest that it's you who is being greedy? And if they have all those properties are then renting them out? If so, why are they not cash rich?

I am furious on your behalf OP. The proposal from DH's friend is total cfuckery and although it looks as if DH has said no, the danger is that he could be persuaded by the friend to change his mind. Please do all you can to insist both flats are sold now (even if you think it may be beneficial to keep them as rental), because as long as friend is renting from DH there will always be a financial tie and you will never be free from the rift this is causing in your marriage. A clean break is needed here.

Assuming that ‘d’friend’s properties are let out, wonder what he would do if one of his tenants decided to just not pay rent for 12 months?? Willing to bet he wouldn’t allow that! In fact that’s probably why he is renting from your dh. He rents dh’s property, probably at ‘mates rates’, while he gets higher amounts of rents on his own properties. Also has the benefit of not paying, when he feels like it, by spinning some sob story to your dh who, of course believes him! Easy to see who gets the benefit of this friendship! Unfortunately it is only one sided and you’re dh probably just can’t comprehend that someone who he cares about like a brother could use him like this! He would probably still be sitting rent free in the flat, if you hadn’t fell out with your dh about it! Quite sad really for your dh!

Why not offer them a mortgage? We have sold property to family and friends. All done properly and through lawyers. Basically, we agreed an interest rate with them, and calculated the mortgage repayments, which they give us monthly.

As with any mortgage, we have the right to repossession if they don't pay us.

Might solve your DH's desire to help his friends, but protect your family's assets at the same time.

Don't forget that you will have to pay tax on the income and they will have to pay stamp duty - so if they are cash poor, this might shut down the whole discussion. Also, your tax bill will change if you sell the house and it hasn't been your primary residence for a while. Investment properties incur capital gains tax, so personally, I would sell the one you were living in now!

Your DH sounds like a wet blanket.

Sorry, pressed send to soon.

Why not sell them now? And no, not rent to buy...

This is extremely unreasonable. Financial favors like this may be done withing a family. But not for cheeky friends. At least imo.

rhinocrash aren't there some dangers for the OP in setting up themselves as a kid of bank by providing services? I mean her dh didn't claim the rent for a year so what would happen if they defaulted on their mortgage?

That's ridiculous... they'd basically be taking your house off you ask otherwise you could either rent or sell....

Id give them notice and either rent flats to someone else or sell them.

Lots of great advise to come back to. Also reassuring to read that many would also be outraged by these circumstances. Just to clarify, dh said no to his friend regarding the rent to buy proposal. His words were “ I dont want to be mean and say no, but i can rent both flats and gain income. Then sell the flats in the future and gain full property value”. Also this conversation happened around 6-12 months ago. DH only told me yesterday which after much pondering makes me think he is probably realising his friend is maybe not so much his friend.
What infuriates me is that this greedy attitude has rubbed off onto the friends son. I think dh will have a relaxed attitude and allow the friends son to use the flat for art classes until we secure a tenant. If he does, i will make the process difficult by leaving half of my belongings that i would have sent to the charity shop at the flat and popping in regularly. Also we plan to decorate the flat before renting hence why we cant get tenants in asap. And we cant decorate until we have some funds. I feel much calmer today, i know many of you will disagree with me but i honestly feel i have no say with the flats as they are his properties prior to marriage. So i find it difficult to stand my ground. I feel he bought them before i was on the scene so how can i dictate what to do now.

We dont have joint finances. I keep my finances separate. The new house is in both our names. He covers bills and mortgage. I went part time to look after LO so took a salary cut. My income is more or less mine to spend how i want. I usually spend it on our little family.

think dh will have a relaxed attitude and allow the friends son to use the flat for art classes until we secure a tenant

So if someone has an accident in your flat whilst attending one of these art lessons then I take it dh is quite relaxed about paying the victim compensation or does he have business insurance and planning permission to let out the space as a business

Your dh needs to grow up and smell the CFs and learn to say No to these people who are only his friend when they want something or it suits them.

As Oliver said this stupid favour could cost you everything. Your dh thinks allowing the son to use the flat is some kind of casual thing but this is not the 1970’s. We live in a highly regulated environment and the moment something goes wrong, make no mistake, cheeky fucker son will come down like a ton of bricks.

I just feel like i am dressing my LO in family hand me downs because we are cash strapped. I shop cheaply, cook with reduced items etc and cut corners all because dh put his friends needs first. After all that, they came back asking for more. And now their son wants the flat rent free until we get tenants in

After being so unassertive as to put friends before family, your H has the nerve to talk to you about it yet doesn't want you to respond sensibly.

Historic fights? You mean he can fight with you but can't be assertive with his friends? What kind of man is that?

Of course the friends and their son have plans for the flats as they know your H is an absolute mug. Maybe he said no to Rent-To-Buy but you can be sure in some way, it will happen.

So you're living a quite frugal life, your H says you're greedy despite that, and you'll go thru all the stress that comes with living in a fixer upper - whilst his mates are sitting pretty.

Fuck that - I'd take the foundation from under him and via that, his cf mates also. They all need a lesson.

This is why you should never involve friends and family with business.
Tbh Op, I think it is strange that you feel uncomfortable talking to your dh about these flats. You are married to him, so those flats are joint assets. You have every right to make your views known because in the event that things go wrong, you will suffer too’
His ‘friend’ is taking the piss though, but it’s your dh who is the problem