Is this fair? It's a money one

[Oldladyshoes]

First post but long time lurker.
This is not my problem but a friend of mine who asked if this scenario is fair. I will try to present as neutral as possible.

A and B have been in a relationship for 5 years. Both are mid 50s and divorced. No plans to marry again. Both have young adult children from their marriages who all work and live independently.
A is mortgage free but does not work. Medically retired from public sector job a couple of years ago, receives pension.
B has a mortgage. Semi-retired ie retired from public sector job a few years ago and receives pension but works part-time in a different job (lower salary).
Last year B's house needed some major renovation doing which meant they could not live there while work was being done. As B spent most of their time at A's place anyway it made sense to move in for the couple of months or so that the work would take. All was good in the relationship so next step was to continue living together and B to rent out their property once completed.
A arranged for a co-habitation agreement to be put in place which B was happy to do. Agreement states that everything would be 50/50 eg all bills (food, utilities, living expenses) etc., neither would have a claim on each other's property.
A also asked that B pay 50% of the rental income from B's property to A. This meant that once B's mortgage was paid for the remaining income would go direct to B, e.g say the rent is £1000, mortgage is £500, so remaining £500 went to A. B did query this at the time as it felt unfair but A's argument for it was that B's mortgage is being paid for by someone else and remaining money would be saved for 'their future'. As A had arranged the agreement via their solicitor, the solicitor advised B to have their own solicitor to look at agreement as well but (stupidly) B declined as they were happy enough with it and had other stresses to deal with at the time (no excuse but hindsight is a wonderful thing).
Unfortunately both A and B have had to deal with some significant stresses in recent months (none of which are their fault, just unfortunate life circumstances) which has had an impact on their relationship. It seems likely that the relationship is coming to an end, so B has been reflecting on the financial aspect and wondering if they were taken for a mug with regard to giving A all the rental income. B is not planning to make a big issue of it, nor is it the only reason for the split, but they know they can't really question it or ask for any of it back (their 'future savings' which in reality haven't been saved at all as A likes to spend money). So, I just wondered what MNers thought of this set up - does it sound fair to you?

B really messed up by not getting their own solicitor. No bloody way should they have handed over all their rental income to A.

What were they thinking!?

Surely if it was for joint future plans half each would be reasonable.
I get why A wanted some of the money, otherwise B was living rent free in A's home while making a profit on their own, which they wouldn't have been and to do if they still lived alone or in a property with rent/mortgage

I think if you strip out who is working, who can't work and who has a mortgage, it seems OK.
Person A has house, person B moves in and they agree to split bills 50/50.
Persons B rents his house out. They split the rental income 50/50.

I think A is a cheeky money grabber and B was insane to agree to this.

Assuming the rental income was split? Did B keep hold of half of the rental payments or does A have it all stashed somewhere on the promise of the 'future together'?

If the latter and the relationship ends, will A hand it back to B?

Well I think 50/50 split after the mortgage paid would have been fairer, but partly because it seems to be taking advantage of your partner otherwise. I mean, effectively neither is paying a mortgage, so 50/50 of the profit seems reasonable to me. I don't know if it actually is fairer.

I am assuming A is male and B is female. Please tell me they are a same sex couple. It would be cheering.

The solicitor B didn't ask would be the person who would know.

B should calculate how much they have handed over to A from the rental income; as it was earmarked for saving for the future B should tell A they owe 50% of that amount.

Or B can simply chalk it up to experience and move on with their life

Surely it should have been 50% of the profit from renting?

But B still had to pay the mortgage so A took every penny of profit - cheeky fuck. A was laughing and quids in.

B should not have given any money to A unless this was agreed as rent to A. Splitting bills etc 50/50 is fine but A should have said they wanted rent not dressed it up as saving for their future. It isn’t unreasonable that A shouldn’t have someone living in their house rent free. But given that A has no mortgage and B does it would have been more reasonable for A to take some rent money for any reasonable wear and tear.
I think the problem is that B should have definitely spoken to a solicitor and A should have called it what it was: rent. Not saving it for the future (B could have done that if that was what the money was for).

The rental income was £500 after the mortgage had been paid so I think the 50/50 arrangement would have seen A and B getting £250 each.
B really should have taken legal advice.

I think this is made more confusing by calling the money B paid to A 'rental income' from B's house, when really it was the equivalent of rent. Whether it was fair or reasonable rent to pay a partner you are moving in with is difficult to answer without knowing about rental prices in the area, and it sounds like there was at least an element of manipulation in the discussion (future savings together etc). It feels like it would be reasonable for B to ask for half that back, but I doubt they'll see it. B has been a bit daft really and has been taken advantage of.

What about the tax on the rental income? If there was mortgage, tax, essential expenses (gas safety check, maintenance) etc then not much profit left. Sharing it makes some sense but B should have saved £x towards the costs of renting before sharing although they were living rent free at A's. Was B better or worse off overall when living with A? Surely that is the crucial detail?

They were both £500 a month, better off using this arrangement (than before they lived together). It's fine.

Otherwise A would have seen no change in income. B would have been 1000 better off. (Using OPs example figures.

Let’s start with the fact that as a landlord, the mortgage is not the only expense. A landlord needs to be prepared to cover any number of repairs and to perform regular maintenance on a home. There may also be periods of time with no tenants in place.

taking half the rental income net of the mortgage may not even leave B left with enough to cover these operational expenses.

B sounds like an idiot and really needs to asses how vulnerable they are before getting into any other relationships. What a ridiculous thing to agree to.

Yes, B was a mug but what's done is done, no point in dwelling on it (but should learn from it!).

But A would have a decrease in what they spent on bills and living expenses. So A absolutely had a benefit by the move and didn’t need to steal money from B.

But B would also have had a decrease in bills and living expenses.

Depends on the figures, how much of the rent was actually foe the mortgage.

I am shit at maths but from what I can work out, the only fair outcome if they split up is - B works out how many £500 (for our future) payments they have made and A gives B half of it.

That way A had someone paying half their bills AND an extra £250 cash a month and B was having their mortgage taken care of, paying half of A's bills and also an extra £250 cash a month.

But they wouldnt have both been £500 a month better off as B had to deduct the mortgage from the rent payment, the total left was £500 which B gave to A, not £250 each which would have been fairer.

I’m not sure it should be 50:50 on the profit. As B would be reducing their mortgage with the mortgage payments and so effectively saving from that.

50:50 on the rental income once the interest payments have been taken into account would be the most fair.

It depends on the mortgage amount and rent amount. These are example figures.

The point remains... they should both, benefit equally from the sharing arrangement. (Financially)

Was the amount received in rent really very much more than the mortgage plus costs?

Shared living expenses benefited both parties, as both were better off than paying full whack living separately, so we can ignore that.

B had gone from paying his/her mortgage while living at home to living elsewhere and receiving rent in excess of the mortgage. So B’s net income had gone up while also owning more of the house (as the mortgage is paid off and more of the house is owned outright).

In that scenario, B’s benefiting from both zero mortgage and extra income. A is getting nothing.

Under the agreement signed, B is getting mortgage paid and A gets extra income. I can see how that looked like a fair benefit to each.

I wouldn’t have done it, because if I cared enough to share my home with my partner I wouldn’t be trying to benefit financially from them when my housing cost hadn’t increased. However, if ring-fencing was important to them, I can see A’s perspective.