Neighbour has rented out our property abroad without permission!

[unsurebut]

My father has a property in Spain. It's been in the family since the 70s as a holiday home. Until 3/4 years ago my father travelled there regularly and the place was occasionally used by other family. Then my father had a catastrophic stroke and wasn't able to travel for a while and the place wasn't used as much.

The neighbour there offered to keep an eye on the place in return for his family being able to stay there on the odd weekend/couple of weeks in the summer. He's a nice guy and has done a lot to modernise the property. My father then gave him permission to rent out the flat when it wasn't being used, again, for the odd weekend / couple of weeks in the summer, nothing permanent or long term and we were to be kept informed about who was staying there and when in advance of it being rented out.

Fast forward to this year and my father has recovered enough to travel. We've booked to go there in June, all very excited. My father emailed the neighbour, only to be told that it's not possible because he's rented the property out until January! Not only is this not permitted, we weren't even told! I am absolutely outraged and my father is very cross. He's emailed the neighbour to say that we will be arriving on said dates and that's non-negotiable, the neighbour has replied to say that he's away this week so will respond next week. Meanwhile, flights have been booked, all on the assumption that we were to be notified in advance of it being rented out.

There's communication between my father and the neighbour referring to the agreement, but no specific contract or anything, and the arrangement has worked well until now. I think what has happened is that the neighbour has become used to us not using it and has been renting it out far more than we were aware.

So what do we do now if he refuses to get the 'tenants' to leave?! Surely their contract with the neighbour is null and void because he doesn't have permission to rent it out on this basis? The neighbour DEFINITELY knows this.

AIBU to demand the people leave so we can use the flat as and when we want?

What an absolute shit show.

They were banked? By whom? 4 years ago?

I doubt it. Whole point of the cash transaction.

You have no idea.

I beg your pardon? I really, really do.

I take it you have years of experience as an HMRC Compliance Inspector?

It all sounds like a bit of a mess. To rent your holiday property in Spain you need a touristic licence granted, presuming your dad hasnt got one of these. Getting a lawyer may be the only option, it could also open a massive can of worms up for your dad.

Hope he gets it sorted.

I take it you have lived worked rented bought and sold property in Spain and live here now.

It is not a legal scenario.
It is cash under the table.
The worry is getting the people out.
Not tax.

OP said that it was ok for the neighbour 's family to stay there when visiting so no money would have been paid as it wasn't an Air bnb set up. It was just a favour for keeping an eye on the property. The neighbour has gone one step further without her father's knowledge.

No, but I do have 34 years experience with HMRC , 15 of which were with Compliance undertaking investigations into non Compliance.

You may have missed the point - I'm not talking about Spanish Tax Legislation.

Her Father has very very likely Evaded UK Tax.
Which is a criminal offence actually.

OK.
Meanwhile, I am trying to give OP relevant advice about a neighbour illegally and untraceably renting or lending out her fathers flat. For cash.

She does not need other scenarios. There is a pressing one.

No, OP has said her Dad would get bundles of cash periodically and he knew the property was being let to others, but not the extent.

He just wasn't getting his full cut.

^This^

Id get a local solicitor involved and change the locks asap

Wait… you dad has received at least some income from this arrangement? But your dad hasn’t organised insurance, doesn’t pay tax?

You made it sound like the neighbour was up to no good on his own, but you dad is just as complicit. Nothing has been done properly, and they’ve both made money out of this.

Really, it’s your dad’s fault for starting this. And the neighbour has clearly just ran with it thinking he’d get away with skimming extra and renting longer.

I think you need to let it go tbh. If you can get these tenants out then that’s great but if not, let their rental finish but have them switch the rental payments to your dad (and he needs to sort insurance) and then end the relationship with the neighbour. And make sure your dad doesn’t do anything like this again.

Change the locks is the cancel the cheque of 2024.

To be fair, the original cash-in-hand rental income sounds like it was probably only a few hundred, maybe a couple of thousand tops, and quite likely less than the service charge/maintenance costs on the property, so probably no tax liability.

Now that the rental income is presumably much higher since the neighbour has started renting out the flat year round, OP's father hasn't known about or received any of it, so again - no tax liability!

Why is the neighbour pretending it's his property if he has your Dad's permission to rent it out?

@BMW6 And yes, I realise that if he was investigated he would need to prove all that, but under the cirumstances it doesn't seem like an enormous concern. Realistically, what would happen if you called HMRC and say "4 years ago I was given £750 cash in hand in Spain for a couple of informal weekend rentals of a flat there. That year I also spent £900 on the building/service charge, and £600 on maintenance, as well as £500 on insurance, cleaning and commission to the guy who organised the rentals. How can I submit a tax return for all that?"

But she needs to understand the seriousness of the tax situation, because that is a can of worms she might be about to open by getting lawyers involved.

And, y'know, there's the moral issue of the unpaid tax as well as the legal side.

There is a very hefty fine in Spain also for unlicensed renting out of properties - up to £250,000 I believe if they choose to prosecute. I think I would wait until January then change the locks.
( I have a home in Spain and dont rent out for this and many reasons)

You need to book a hotel for your holiday in June, even if you started legal proceedings they are unlikely to be complete by then anyway.

Personally, considering that your dad did give the neighbour some permission to rent it out and could have broken some laws himself, I’d be inclined to let this tenancy complete and then take back control in January.

Now that the rental income is presumably much higher since the neighbour has started renting out the flat year round, OP's father hasn't known about or received any of it, so again - no tax liability!

Wrong. The neighbour is acting as a letting agent would.

The income belongs to the property owner and the property owner is liable for the tax due.

If the property owner hasn't received all the letting income that's not relevant to the tax liability. The owner could sue the neighbour to recover lost income.

The verbal agreement between Dad and neighbour carries no weight when it comes to UK Tax Legislation. Dad is liable for tax on ALL letting income.

Breaking news (to some on this thread) - outside of the UK, countries have their own laws.

We used to live in France and we had a small house which we rented out. We were very lucky to have good tenants, but as far as I know it is still the case that:

"Tenants in France are protected from eviction during winter. A landlord may not evict a tenant from 1 November to 15 March."

If you own property in another country then the onus is on you to be aware of the rules and regulations and not just assume that because x is fine in the UK, then it is fine everywhere else.

OP your situation sounds like a nightmare - I hope you can find a satisfactory resolution.

You wouldn't be able to do that in the UK. If they have lived there more than a month I am sure they can continue to live there - quarters rights . . . do they applying Spain?