To rent out or not

[Anastasius]

There is a very broad and experienced spectrum of folk on here and so I'd value any thoughts on the following.

We have been trying to sell our late mothers' flat situated in a warden-assisted block. We do have a buyer ..a lovely 80-something year old lady who has a close friend already living there. Long story short, contracts were exchanged Jan 2 this year, only the buyer for her house was a muppet. We had four attempts at completion and each time this muppet failed to come up with the funds. It even turned out that the deposit money hadn't even been paid by the time the date of the first completion came and went. That eventually arrived and we rescinded the contract as did our buyer.

But now, with Covid-19 the housing market is simply going to die, I think and I see little chance of her managing to sell her house. So....

...my sister and I were thinking about letting her move in with some of her furniture and pay us a nominal rent and the monthly maintenance charge on the flat. The plus is that (a) she is now resident in a more protective environment and (b) our outlays are minimised. Obviously we need permission of the managing company etc .

Downsides are ...she dies...then her furniture is in the flat...worst case we have to pay to get rid of it ourselves...

She decides, for whatever reason, to stop paying the rent and becomes a sitting tenant. Unlikely but one has to think of these things. In this event how easy is it to evict her ? After all she as her own house still...unless she has rented that out.

Really , really in a quandary.

[Serial_Apologist]

So long as your mother has someone looking out for her where she is, in her own place, be happy for her. With any luck, once this business is out of the way there will be a backlog of potential buyers - by which time should you still have misgivings about taking her in, she will probably be able to afford moving into a care home.

[oddoneout]

A few things come to mind. Can the would-be purchaser afford the costs of two properties - eg insurance(more expensive for empty homes), council tax(may be ditto), utility standing charges on her existing property, in addition to whatever charges arise from the arrangement you suggest?
As you say the management company/ leaseholders may forbid letting.
Any informal arrangement runs the risk of turning complicated - problems can be hard enough to sort out sometimes even with a formal tenancy contract.
It is indeed a difficult situation, and I think it will cost, whatever you decide to do - paying charges on the empty flat or drawing up a legal tenancy arrangement(if permitted to sublet) or the risk of default on an informal arrangement - which could leave you with an occupied flat you cannot sell and liable for the service charges?

[Dave2002]

So long as your mother has someone looking out for her where she is, in her own place, be happy for her. With any luck, once this business is out of the way there will be a backlog of potential buyers - by which time should you still have misgivings about taking her in, she will probably be able to afford moving into a care home.

I think you misread that.

The person who wants to move in is not A's mother.

I can't really give advice. The charitable thing to do is to let her move in, but A is not running a charity, and sees some potential risks. She's not homeless. One option is to put it on hold, and/or perhaps see if anyone else comes along with an offer who is able to pay. If that happens she could be given one last chance to buy it - maybe.

Depends how long A thinks the present situation will last. Are there any constraints on the property about who can live there?

[Serial_Apologist]

I think you misread that.

The person who wants to move in is not A's mother.

Yep - bit of confusion there on my part.

[ardcarp]

As a 'landlord' (it's not as grand as it sounds) I would avoid doing anything unofficial. Definitely do it with a 6-month Shorthold Tenancy Agreement. You can buy the forms at WH Smith and both parties sign with a witness. If anyone doesn't know about these, the terms are that the tenant is bound to pay the rent for a sixth month period. After that there are 2 options. (1) Do another 6 or 12 month Tenancy Agreement or (2) just let the original agreement stand, the terms automatically being that the tenant can leave giving one month's notice or you can end the tenancy giving her 2 months' notice. There is, I gather, a complication if a tenant refuses to leave, and in this case you have to apply for an eviction order and get it enforced. Nothing of the sort has ever happened with our tenant, and from what you say, the lady in question is a worthy citizen.

Incidentally, the tenant has to pay council tax, but the landlord must arrange and pay for buildings insurance.

Obviously we need permission of the managing company etc .

Downsides are ...she dies...then her furniture is in the flat...worst case we have to pay to get rid of it ourselves...

I have never had anything to do with a 'sheltered accommodation' property. Presumably it's leasehold? I'd just get some advice about that side of things before going ahead, and of course consult the management company. Some companies are definitely 'in it for the money' and have to be treated with some caution. I know it sounds harsh, but it's in both parties' interests (yours and the old lady's) to dot all the i's and cross all the t's before wading in.

In the event of having to clear the property of furniture and belongings, that is not a huge cost in the big scheme of things, but there could be complications if the old lady's family has an interest. Indeed, it might be worth asking her whether her family could be consulted about things? It's a difficult question to ask her because she might be touchy about it. But you could end up with sibling rivalry among her heirs....or even before that if one or more of them gets power of attorney.

Sorry if I'm making it sound complicated! The gist of the above is just to tread carefully.

[Anastasius]

Many thanks to you all. Some very sage words there. Will ponder on.

[LHC]

My mothers in sheltered accommodation, and there are significant conditions with regard to the sale of the property. The Trust that manages the block of flats has to approve the new owner (to make sure they are suitable for sheltered accommodation). They also get to retain 20% of the sale price.

You may we’ll find that similar, or possibly even more stringent, conditions would apply to subletting the property. Before you do anything, check the terms of the lease to make sure that you are allowed to sublet, and if so, what conditions apply to subletting.

[Barbirollians]

Anastasius take advice ! if your purchaser becomes your tenant there are lots of hoops to jump through . Becoming a landlord should be treated like any other business .