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 The problem is if you start accepting rent you’ll create a tenancy and you’ll have to follow all the legal obligations of a landlord. Are you prepared to do that.

Yeah, her life has now changed (for the better 💐) so it's time to mention money. It's a pity you're having to mention it before it's been offered, but maybe that's something to bear in mind for the future.

We do that anyway.

I think the key words are need it. I'd have a quiet conversation to say, we said as long as you need it, your circumstances have clearly changed, don't want to hurry you, but it's now time to review, you now have two incomes partner is renting out their property, you will give her to the end of the year to either start paying you or to move somewhere. If you give reduced rent I may say that will be reviewed again in say two years, or if there is a life event, e.g. marriage, kids leaving home etc.

I don’t think you’re being silly. This isn’t about money, for either of you. It’s about who you are - which is what you offer when it ISN’T expected. You would offer, not wait to asked. You’re offended not that they will keep money to themselves unless asked but that the onus shouldn’t be on you to ask. That they’ve foisted the responsibility for holding the lowest standard you will accept on you, rather than being accountable for offering the highest standard they can offer that stings. So you feel exploited. I would. It’s not about the money.

You were crazy giving an arrangement that was open ended. But you did.

When he moved in that was the time to actually bring up rent.

Plus I would assume you did not think it would go on this long, she and him are piss takers.

I warn you right now op as the got it together sibling in your family who has had the good luck of a solid relationship as DH is in his and I am in mine the sympathy the less able or unlucky siblings get will possibly translate in to money. Because we are the have it together couple DH and I received nothing in his Fathers and my Mothers wills. My sister made some bad choices and also had some bad luck his sister is an actual idiot who his family always feels sorry for, she got the Fathers estate worth 350k. The Mum has also subbed her.

You need to ask for rent, any paperwork signed at all in any way?

Yes you will need to have the conversation that it is now time to pay rent. If there is surprise about this on her part for asking at this time be clear and honest. You didn't ask for rent when the bf moved on because you were expecting him to offer. Then time moved on and it felt a bit awkward but you do feel it's time and they will still get a good deal because you are not asking full market value. It's up to them then whether the deal suits them or not and if it doesn't they can move out.
The bit about lunch in your original text wasn't clear to me. Did you go out to lunch with this couple and they actually split the bill, only paying for themselves ...after years of rent free accommodation? If so they have some nerve and it's no wonder your husband felt angry. Treated to a lunch out is the least you and DH deserve.

If it is at all relevant there is a house on the same estate for rent at the moment for £3100.

Husband is prepared to rent it to them for £1500.

It's been 5 yrs you have been amazingly generous, just talk to her, cost of living is expensive for everyone.

Hey sis, need to let you know we're looking over finances and making some changes this year. We need to make an income on the house you and the kids are in appreciate that you all have settled but now you and Bob have started living together seemed like a good time to discuss.

If you want to move out we'd like to put the house on the market in July so gives you 3months to get settled and 6m since you and bob have lived together so a good time to fish or cut bait, or alternatively we enter a traditional landlord /tenant situation which might cause issues in our relationship so am hesitant about this. Especially as you only want to rent to her and not as joint tennants

We're aware the house would rent for 2.8k pcm but appreciate the kids are settled so would be looking for 1.4k pcm in rent.

Know this is a large financial change for you hence the notice period

(What does your sis do for a living do you know her income? Does her ex support financially?)

You offered her a free house for as long as she wanted (more fool you). Of course she isn't going to start paying rent! The boyfriend should though.

(What does your sis do for a living do you know her income? Does her ex support financially?)

Yes ex supports, sister works 3 days per week, at a good guess I would say it's close to 100k household income now he has moved in.

could they tell he was annoyed when they asked to split the lunch bill? That would annoy me too.

Why? You've been more than generous, her living there has cost you many thousands already. Give them 3 months notice that you're going to start charging market rent.

Still a Bargain for the house in the area. If she moans you know she’s then an ungrateful sod.

All that money she’s had off you in unpaid rent because you are far too nice is huge.

No I don't think, he is a very decent man.

I could only tell because he was a bit quiet on drive home.

Op do you have a mortgage on the property? If so you're paying for her to live there.

No we don't.

Even at 2k a month for 5 years you’ve been very very much more than generous. I think I’d actually be mad with dh if he did this and lost us that much money.

There should have always been even a minimum rent that slowly increased.

With respect, you sound like a complete pushover (unusual for a landlord) and the pair of them, sister included, are walking all over you.

I would start charging them, and much closer to market rent. Don't you want your asset back at some point to do the actual job it's meant to do?

Yes, the mistake you made was to make assumptions at the point at which he moved in.

When you speak wiht her, I would frame it as such. Something like,

"When you moved in we wanted to help you after a difficult situation. And that still stands. But when you asked if Jack could move in, we, perhaps stupidly, assumed that there would be an understanding that the rent-free arrangement to help YOU didn't also apply to him. I'm sorry I didn't make that clear at the time or discuss it with you.
However, while we are still happy to help you out, and him as a result, we aren't comfortable with him living there rent free. Our goal was to help you at a very difficult time but not to subsidise other people long term. Can we discuss what rent might nlook like, which, of ocurse, we're happy to make at significantly lower than market value."

I think the suggestion of £1500 from nothing is actually going a bit far, even if that IS fair market value. I'd suggest you start lower and ask that it be increased routinely over the next few years. Eg £1000, rising 10-15% per year until it hits 50% of market value. Or something like that. Becuase realistically, HE is the one who will be paying this, not her so it probably needs to be linked more closely to what he would pay if he was a single man living alone?

Yes, you did need to tell them that they needed to pay rent once he moved in if that's what you wanted. If everyone is so decent then that shouldn't be a problem.

I think if op goes that route the partner would just move out and then sister expect her rent free house again. Too much emphasis on it being free for sister.

YANBU.

You and your DH need to ASK. Use your words. Your sister's situation has changed. It's now time to pay market rent.

I know we sound like pushovers!

We have issued 2 section 21's this month alone, and I promise contrary to evidence are both intelligent people.

It's just different when it is family.

I would put a time limit on the new arrangement ...a year/two years? On half rent they could save up to buy their own property. Helping them to do that through cheap rent would be an amazing thing to do. Helping your sister to become financially independent and take full responsibility would see a really positive end to all the help you've given her. In any event I would be careful this time not to make the half rent offer open ended.