Family member not paying rent

[blettedmedlar]

My husband and his sister inherited a house from their father about 3 years ago. The house is in need of a bit of a cosmetic upgrade, but is in good condition, large garden, garage, nice area, and is probably worth about £320,000.
On FIL's death, our nephew (DH's sister's son) said he was interested in buying the house. As he was fairly newly self employed, he needed more time to get a mortgage (he lives with his GF who works in the NHS), so it was agreed that they could rent for about a year, then buy. They are renting at a very discounted rate, £400pcm when houses like this typically rent for £900+pcm. He is showing no signs of buying the house.
DH has obviously been dealing with all the financial side of this, but I found out yesterday that they have been very sporadic when paying rent. They missed four months rent in the first year, 5 in the second year, and apparently have only paid one month's rent so far this year.
Obviously with lockdown there are many people having financial problems, but this is not a recent thing. Nephew is not a kid, he's nearly 40, and his GF is in her late twenties. I just feel they are taking the piss big time. He doesn't have a great relationship with his mum, but has always got on well with DH. However, he has stopped returning DH's texts and calls.
DH is retired, and though it's not much, the rent has gone to helping our student daughter. DH said he wishes the house had been sold straight away, in hindsight.
SIL won't discuss it, but DH said yesterday that he's getting very worried about the situation. Obviously with the proviso that no action can be taken in lockdown, does anyone have experience of this sort of thing? With it being family it's tricky, but DH said he feels like they're being taken advantage of.

DH needs to have a word with SIL say he now needs the money and nephew either buys the house now or it goes on the market.

Is DH executor? If so can he just put it on the market!

I guess in her defence SIL is caught between both parties and doesn’t want to deal with it, I would be embarrassed if my kids were acting like that.

@billybagpuss I agree, if my daughter acted like that she'd get such a bollocking! As it is, she pays more per month for a room in a student house than they pay (or rather don't pay!) for a three bedroom house.
DH and SIL are executors, so I think it's ultimatum time now.

I should add that there is a tenancy agreement, the transaction is on an official level.

Nephew needs to buy or move out obviously.

First of all, set up a direct debit with nephew for DHs half if the rent. Tell him that you (DH) is prepared to waive the missed rent - write down exactly how much it is - but from now that now on you expect them to pay market value. SIL can then choose whether to do the same or not, but only she will lose out financially.
Then tell them that the house will be going on the market in 6 months, and if they still want to buy it you will deduct the estate agent costs from the purchase price if they have have begun purchase proceedings by that time. If not, you will serve notice when you put the house on the market.
SIL will just have to suck it up. If she doesn't want to sell, then she will have to buy out your DH at market value.

Have you got tenancy agreement? Gas check done?

He's so cheeky and so is his mum. Your husband needs to be firm now and tell him that the minute lockdown is over, the house will be up for sale. Tbh the rent difference should come out of his sister's share, given her attitude.

Can the sister buy out your DH’s share of the house? Then it’s up to her who she rents it to and what they pay.

Also the missed rent should be deducted from Sils share of the property once it’s sold.

I don't think his sister is in a position to buy him out. She has a history of being quite grasping with money!

Well now it's time for your DH to be the same. Why should he put up with this? It's ridiculous. It would be bad enough if his nephew was actually paying his greatly reduced rent, but he's absolutely taking the piss. That house was not left to him.

I would be telling them he needs the money get the house on the market.

Perhaps your DH could remind his sister and her chancer son that once the house is sold they will be quids in and have plenty money to use as a deposit for a new house etc.

Sometimes a big enough deposit can really help with lenders even when someone isn’t the best bet on paper. So if she hands over a chunk of cash to the son he could get a nice enough pad.

He’s not going to get him out without losing the relationship with his sister and nephew.

Personally I think they’ve trashed the relationship anyway, so I’d go ahead talking to a solicitor and accept that is going to be the outcome.

And I’d pursue the missing rent if they gave me any shit back.

You need to give them an ultimatum, arrange to buy the house and provide evidence of mortgage application and solicitor progress within the first month after lockdown ends or you will Put the house on the market and serve them eviction notice.
I think the rent not paid to date has to be put down as a loss unless you want to make a claim for that through court.
I don’t think it is right to deduct unpaid rent from his sisters share of the house sale (as suggested above) because She isn’t the tenant and your husband is as responsible as she is for letting this go on so long. Your husband is equal landlords with his sister and so it is a joint problem regardless of it being her son who is the tenant.

She has a history of being quite grasping with money!

So the apple doesn't fall far from the tree.

Agree with PP, evict, house on market, and and claim through court for unpaid rent. My only hesitation would be that with COVID-19, what state the housing market would be in after things start to return to "normal". Could your DH buy his sister out (I'd take the rent out of this personally and not even mention it, just say this is what the housing market looks like now) or could they rent at market rent via an agent?