Please help family and rent

[limeandwater]

Lurker of ten years plus, and looking for some anonymous and honest feedback.

Approx 5 years ago sister split from husband. On the surface they lived a very nice life, but long story short her ex had mortgaged everything against his business and they lost the lot and were left with nothing.

My husband and I are fortunate enough to have a number of properties. We let her and her two kids stay in one of our houses and used words to the affect "it's yours rent free for as long as you need it."

She met a man approx two years ago who we like and is good to her and the kids and 3 months ago she asked if he could move in. We said yes - but presumed rent would follow.

To give you some non specific info the man in question earns approx 60k per year and rents out the flat he was living in for £1600pcm which I imagine would more than cover his mortgage. They live a nice life if that matters. Holidays, meals out, etc.

We are in South East and the 3 bed house she lives in would rent at approx £2800 per month. My husband thinks its cheeky that no offer of rent has been made. He doesn't want or expect market value - and in fact would probably only want about half.

I agree with him, it's a bit cheeky, but then think back to our wording 5 years ago.

My husband is a lovely man and never gets angry, but last Sunday we went out for Sunday lunch and we split the bill. I could tell tell he was annoyed and asked him what was wrong - and he stated "he lives rent free in our property, he could have got lunch."

Who is right and what do we do?

@limeandwater Why doesn’t she work more hours? Is there a reason?

She has two kids, I know many do and work - but it's best for them.

Why wouldn’t a work coach understand the laws?

It’s quite clear to me that if you have a tenancy agreement and you are paying rent whilst earning a low income, you can claim universal credit. If the op had explored this with her sister then it could have worked.

It was never about the money.

It is a few years since I last looked into it, but it used to be that you couldn't claim UC housing element if you lived in a property owned by family UNLESS they could prove that the property was ordinarily rented out and so they were losing an income stream. At that time some work coaches would miss the nuance and simply state that you could not claim UC housing element if living in a property owned by relatives.

Not that it matters to OP.

Be wary of the new changes coming into law on May 1st- the Renters' Rights Act. I would act now to formally serve notice- and now a non family member will legally be your tenant, even if no rent is paid, you need to ensure everything is done by the book- EICR, immigration checks etc- all the things you will do for your other properties.

If I were your sister I'd genuinely want you to ask rather than quiet resentment build up. Resentment ends relationships, it's an emotion you should never allow residence to & it sounds like your DH is already feeling it. Sort it out now OP, cos it'll just get harder the longer you leave it.

I think personally if you don't need the rent money - what difference does it make if her new boyfriend has moved in?
You still have the asset and presumably your sister looks after it well enough.
Your children will still benefit from your large property portfolio from the sounds of it. Presumably you have trusts etc sorted out as it sounds like iht is going to come into play here.
I wouldn't charge my sibling rent if I was able not to no matter the circumstances.
Perhaps you could donate the 'rent' to charity? - or savings accounts for your nephews/nieces.
Honestly, I'd consider leaving this house to my sister and her children in my will.

Until it was. I must say I’m surprised that you are a multi property landlord but have shied away from the money conversation firstly with your sister and then when he moved in. Get it on some kind of legal footing before the Renters Rights Act kicks in, or you may find he turns nasty, pays nothing and refuses to move out.

Millionaires generally are. How do you think they became rich in the first place?

The RRB changes very little.

It's just the media that are hyping it up.

If they marry, might he try to register an interest in the property? Is it going to be part of your dc’s inheritance? What happens if you want it back or your sister’s kids are still there or she (far in the future) dies and he’s still there?

I agree the media are hyping things up. But you won’t be able to serve a section 21 easily and any eviction process, if it comes to that, will take longer.

From April 1st it's going to be a tenancy between the company that owns the property and my sister.

I’m sure it wasn’t about the money op. You sound very genuine and extremely generous towards your sister and that is very admirable.
But moving forwards, you may want to be more cautious now her DP is on the scene to ensure your DH isn’t feeling resentful. It seems this new partner of hers isn’t as generous as you both ad explained in the splitting bill scenario.

👍

You've been very generous and no good turn goes unpunished. I guess the man may not have known about the rent free arrangement as asking to split the bill really was taking the piss if he did.

I would send her a message asking what date is best for the rent payment to start as obviously since partner has moved in they will need to be paying for the property as you have been covering it whilst it was “needed” but can’t afford to subsidise her costs now there a couple with the means to pay there expenses.

We wont and don't intend to charge him a penny to be there.

The tenancy agreement is between the company that own the property and my sister.

Honestly, I’d just hide this thread. The issue is resolved, so you’ll just be wasting time clarifying things and repeating yourself to people who haven’t RTFT.

You should be paying tax on the £2800 pcm rent, whether you actually receive it or not. Tax evasion like this is why the Govt is trying to bring rogue LL to account.

I think you're marvellous and have done what I'd hope I'd do in yours and your sister's situation.

It's a terrible shame that they didn't pay for your lunch which has left a little sour taste in your DH's mouth but all sounds like it's going to come out well in the end.

It's nice to know nice people walk amoung us OP. Well played x

I voted YABU because I think it's weird and unreasonable not to have communicated using words, as PP have said, and to have just assumed (not at all unreasonable to charge rent). Have now read your updates, and am glad to see that you have a satisfactory result.

Off topic but what’s that like?!?! Genuine question? I’m the exact opposite (disability & losing my husband) and have spent my entire time as a parent, wondering what it must be like to not lie in bed at night, worrying how you’re going to manage food & warmth etc. Do you still restrict yourself? Do you treat yourselves often? How many holidays do you have per year? I’d be away every couple of months if I were in your position!

Everything is resolved
OP and her DH are happy with the outcome and are fully aware of what they are doing.
Carrying the post on is now just for her entertainment