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?

You are paying her rent for her. The opportunity cost to you (of them living there free) is the commercial rent you could otherwise realise. You are gifting them this money every single month from your own income.

Sorry but it's mostly your fault, when your sister asked can she move her man in ? You should say yes but you expect to receive some money back in rent. You should have explained rent free' was until she got back on her feet, not Forever.

You didn't say anything and waited for her to offer. Shes not going to. The only way your ever going to get any contribution for rent will be by directly requesting it. Although you've left it a bit late, there's still time. Youl have to be direct and say you didn't offer a free house forever just until she got back on her feet.

New rent changes are the perfect opportunity to open up this conversation as your looking at all your properties and reassessing them.

Dont accept £1500, it will only create bad feelings and complications with work being done and condition of the property, rent increases etc. I’d really suggest it might be time to move them on.

By my reckoning you are approx £150,000 down on the arrangement, presumably you can afford it?

What’s your plan if she says no or argues.

We can.

oh dear "words to the effect" and "we presumed" There is another thread on here about mixing fam and business....basically it never ends well.

I highly doubt that will be the case.

I am sure she is going to be terribly embarrassed.

YABU for presuming anything OP. You said to her that it was free for as long as she needed it. You didn't say until she moved someone in. Now you have to have a very tricky conversation with them and you'll have to before it blows up, which will take her completely by surprise.

I think you are hugely overestimating the responsibility of a landlord. Landlords are not responsible for council tax (unless a house is empty) and no insurance is ‘required’. If she’s defrauding benefits (which unlikely) that’s not the landlord’s responsibility either. And as for being responsible for if she has an accident - that’s just silly.

There might be a tax implication. But only might. OP sounds perfectly competent.

You have been very very kind but now is the time to stop subsidising their lives to the tune of £35k pa. That’s a hell of a lot of money which I’m sure your sister will be grateful for when it’s pointed out.
Either full market rent or move out -now wonder they live a ‘nice life’ -you and your hard work is paying for it!

This is where the saying 'when you assume you make an arse out of u and me' comes from.

I also think you need to do some proper research on the legal aspects of creating a tenancy with him on it. It may be possible to have him as a permitted occupier only which protects you and your sister more if their relationship doesn't work out.
I'm not an expert, but if your sister hasn't been paying rent, it's possible that a tenancy (in legal terms) hasn't yet been created. The moment you accept rent there will be.
The new Renters reform bill comes into effect on 1st May and you need to look into the implications of that too. You won't be able to evict unless you want to move into the property yourself or actually sell.
Your sister and bf are CFs but this could be a minefield for you.
Just a. thought, are you sure your sister isn't accepting rent from the b/f and keeping it for herself without telling you?

I suspect you are right.

I think it’s a case that you are happy to support her through a difficult time but she’s no longer experiencing that. It puts her in a situation that she could be taken advantage of her partner.

He may be very happy with his increased income and stay in the relationship regardless.

What I meant was you find it hard to have the conversation because it’s family yet you are ultimately willing to ( and quite rightly!) enforce the law when you have to.

If property is your business why on earth did you not formalize this tenancy ? You will be more than aware that no paperwork is not okay. Especially where HMRC is concerned. And they have additional requirements coming in April too.
You cannot claim ignorance of the rules for landlords.
And two years after boyfriend moved in and no changes made you cannot claim you are dealing with issues quickly.
What is happening are rules requirements from April for landlords.

Ffs, it is so unreasonable to assume that their offer extended to this man!

he’s earning £60k, RENTING OUT HIS OWN FLAT, and pocketing the profit, whilst sponging off OP.

and not even buying lunch!

This man is a freeloading cf, get him to fuck OP.

Why is her sister entitled just because op is loaded?

My BIL has more money than most people could ever dream of, my husband doesn’t feel we’re entitled to any of their money or to any help from them just because they’re in a much more fortunate position. Because we’re not entitled, and neither is op’s sister. Her new partner is definitely not entitled.

I see it completely oppositely.

Paying rent would be the default position.

Why would this man presume that OP and her husband would fund his lifestyle?

Because it isn't a tenancy.

Without the OP asking for rent, given her sister enquired if it was alright to move him in, they will assume all is well.
The OP has had years to sort this out.

The new partner has lived there for three months, not two years.

This - agree with you op that its time to ask

The man is taking the piss imo, he should've gone straight to your husband and offered rent 🤢🤢

Anyway hope its sorted without awkwardness

I think this is the best option OP. It’s possible your anger is misplaced. Because of the wording of the original agreement it’s possible the fact that they should now be paying rent hasn’t actually crossed her mind. Having said that, even if you didn’t mention rent when you OK’d him moving in I do think it’s a bit CF of her BF to assume he could live rent free while renting out his own property.

I would tell them straight that the circumstances have changed since the original agreement, point out the amount of rent you could potentially charge on the open market and base what you charge on that.