Any property/ finance lawyers about?

[Werk]

We are selling our house and trying to find one to buy... we haven't found anywhere and so we are at the point where we will need to decide whether to proceed with the sale and go into rented or pull out.

However, our buyer (cash, no mortgage) has said that we can rent the house back from them for 6 months as they want to completely gut and renovate the place and will be seeking planning permission to do so.

Great! Except, I was sure there are laws against it - I have googled and it looks like I am right although this is an at market sale and we would be paying market rent and so not the same as a distressed seller selling their property on the cheap. The sale is not conditional on us renting the property back but obviously it will be a bonus for us.

Are there any loopholes or something I am missing? I have asked my solicitor but she is as clueless as me (for disclosure, I am a lawyer but not in property). It would be the ideal situation for us.

I am also not a property layer, but do work in property.

I can't really see why there be anything illegal about what you are describing, in fact I have handled something similar in the past.

There may have been an issue if they were taking out a standard residential mortgage, but if they are cash buyers that does not apply.

It is probably wise to protect both parties that you enter in to an AST.

Seems to be of benefit to both you and your buyer.

However, IANAL.

It's the FCA, companies who do this as a business have to be registered.
I have only come across it before when dealing with an elderly person who had entered into one of these arrangements and their family did not know he had done it - usually people do it because they can't afford the mortgage anymore and by renting they can get benefits.

I can't find anywhere that a private, short term arrangement which suits both parties is excluded.

We would be entering into an AST as we would want security of knowing that we can stay for six months and I want everything to be above board. Equally, I don't want to get to completion to be told that it is illegal and the AST is worthless.

Try asking on the MSE property board - lots of very knowledgeable people on there.

@wowfudge

Try asking on the MSE property board - lots of very knowledgeable people on there.

Funnily enough there was a post on there which came up on my google search and basically said it was against the law.

I would let you stay there for 6 months rent free as long as you paid all the bills council tax, etc , while sorting planning, it’s better to have it occupied than it standing empty.

Then when you left just leave them a gift ( read cash ) Simple .

@Chumleymouse

I would let you stay there for 6 months rent free as long as you paid all the bills council tax, etc , while sorting planning, it’s better to have it occupied than it standing empty. Then when you left just leave them a gift ( read cash ) Simple .

That would be even better! It does seem silly that we would move out and rent elsewhere whilst this house stands empty. It would be win-win for us both.

No harm in asking

hmm - this would suggest it's not illegal, there are just rules about it with regard to housing benefit ;

england.shelter.org.uk/housing_advice/benefits/housing_benefit_renting_from_family

There’s no law about letting someone live in a property rent free. My mates dad did it for his youngest son for years.

[quote PatriciaHolm]hmm - this would suggest it's not illegal, there are just rules about it with regard to housing benefit ;

england.shelter.org.uk/housing_advice/benefits/housing_benefit_renting_from_family[/quote]
It's the sale and rent back bit, not benefits.

Yes - that page addresses that - the fact it's possible to get UC for it would suggest it's perfectly legal.

"Renting a home you used to own
Under universal credit rules, there's no restriction on renting a home you used to own as long as it's a genuine commercial agreement.
You can't usually get housing benefit if you owned the property within the last 5 years unless you had to give up ownership so you could continue to live there.
Example: A relative buys your home because you can't afford the mortgage payments. You continue to live there and pay them rent. To get housing benefit you would need to show that you're renting on a commercial basis and you had to sell your home to avoid mortgage repossession. "

Would it work to exchange now but push back completion date? You can apply for pp for a property that you don't own.

He wouldn’t be renting it he would be living there for free , like a caretaker, but accidentally leave some money behind in a tin when he moves out 😀. Too many people complicate things nowdays I like simple , ( I am simple ) 😊

Ok! Maybe I am worrying about nothing then.
Phew!

Once you sell and not the owner anymore, you are just like any other person (tenant) they would rent too. I can't ee what is the issue!
Presumably you'll be signing a contract or agreement.

I wonder though, if a rolling contract can be done in these circs if someone wants to stay for less than 6 months rather than the usual AST?

*rent out to (!)

We would be happy to sign up for 6 months if it meant we were not worrying every month about receiving notice.