Family renting – Should I commit?

Family renting – Should I commit?

8:56 AM, 24th January 2024, About 9 months ago 10

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Hi everyone, Newbie here and I am looking for advice on letting to my son and his partner.

I know most will say not rent to family, but needs must and I’m well aware of the family issues it could cause. I have the opportunity to help my son by renting a property to him and his partner but I don’t want to put myself or them in a situation where we are breaking any rules.

I own a Ltd company which my son has been employed with for the past 2.5 years (it is in a completely different field to property) that is turning a good profit, I am planning on now using my profits to invest in rentals.

I have already set up a new Ltd company with my accountant for my rentals along with a bank account and have found a property and started the buying process.

My son has asked to rent the property with his girlfriend and her children, they currently live separately.

I have now applied for a Regulated buy to let mortgage, which is going through (so no problem with renting to my son, it’s all above board)

My Questions are:

1) Should I put this property into my limited company?
If I did would it matter in anyway that my son works for my other Ltd company (benefit in kind)
Or should I keep this one in my own name?

2) Could he claim UC & or HB
He’s partner is already claiming HB on her council property
They would be entitled to help if they renting else where, but would they if renting from me or my property company?

3) Who can I ask for definite answers before his partner gives her property up.
She has had ongoing issues with the neighbours, to the point she has Drs letters and umpteen logs made. Council have advised her to rent privately (as they have no properties available to move her to)

Unfortunately, she can’t rent privately at the moment due to being out of work and single parent, they have tried to rent together in the past but have had no luck with landlords accepting UC along with he’s income.

(Can I just point out that, they would actually be receiving less than they have now by moving in together, even with benefits so this isn’t to get extra benefits)

Citizens Advice have said they can claim whilst renting from me and that we have to just declare the relationship and show we are a landlord tenancy agreement ect, which I would do anyway, but I’m concerned that there may be something that we’re missing.

Can anyone see any problems arising?

There just doesn’t seem to be anywhere that can give me a definite answer on the whole situation.

Any advice would be greatly appreciated as I’m all googled out on this. 😊


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Karl

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9:22 AM, 24th January 2024, About 9 months ago

I’ve rented to my Son before whilst he was claiming UC & PIP. It wasn’t an issue but he did have to provide copy of AST to prove it was a legit rental.

Martin Roberts

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9:35 AM, 24th January 2024, About 9 months ago

Living with someone is very different to dating.

There is just a chance the relationship might not work out, so something to consider.

Liz Bullock

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10:20 AM, 24th January 2024, About 9 months ago

can't see a problem if you get an agent to carry out usual checks and do a tenancy agreement.

Freda Blogs

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11:13 AM, 24th January 2024, About 9 months ago

Possible issues re benefits - I know of a situation where LL let to elderly mother (in days of HB rather then UC), which Council knew about.

Suddenly Council declared that it was not an arm's length tenancy and a 'scheme' to get benefits. The question was asked whether that LL would actually evict the mother if required. Answer - no, which proved the Council's point.

No matter how well intended your actions, the authorities will invariably assume you are up to something nefarious and your action could end up biting you where you'd rather not be bitten. Be careful.

matthew pinnock

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20:15 PM, 24th January 2024, About 9 months ago

If the relationship goes wrong you will never get her out with kids that are not your sons. Call me old fashioned but if they were married I would feel more comfortable

Judith Wordsworth

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9:54 AM, 25th January 2024, About 9 months ago

Any reason why your son has not moved in with his girlfriend?

Tell it would be a good idea while you look for possible properties. As someone else has said living together, especially with a ready made family, is different to get going out with someone and having fun with them and their children

Michael Booth

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12:08 PM, 25th January 2024, About 9 months ago

Some councils have different requirements to renting to family , but a general rule s if itsa business its OK, however it usually a bad idea with the usual results when rent ain't paid causing friction been there done it .

DPT

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12:14 PM, 25th January 2024, About 9 months ago

Rent it to someone else and give him some of the profit toward his rent elsewhere. This scenario has the potential to destroy your relationship with your Son.

Silver Flier

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15:36 PM, 25th January 2024, About 9 months ago

I would strongly recommend you read this Q&A before you go any further:
"How do I remove a person who has no tenancy agreement?"
https://www.property118.com/how-do-i-remove-a-person-who-has-no-tenancy-agreement/#comments

David Houghton

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20:36 PM, 25th January 2024, About 9 months ago

We rented a flat to our son. You can't claim rent if you live in the same property but that's not the case here.

The only problem is if the rent isnt paid. You can claim the uc once 8 weeks in arrears.

Problems are the relationship should they default on rent. None can advise you on that risk

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