Letting a flat

southwell · 14-01-2009, 10:36

Hi,

My friend has been offered by his sister to let her flat out as she can no longer afford to live there. She has a mortgage and shared ownership i believe.

As i have never looked into this (i bought my house) what should he be paying for? Would his sister need to change her mortgage type as she would no longer be there? Wouldn't he be renting, not letting, or does she need to own it outright for that? If he was letting wouldn't he be responsible for all bills, including council tax or would she be responsible for that?

Thanks for any help, ill put my hat on now.

Ian

Aragorn · 14-01-2009, 10:50

So she is the mortgage holder and part owner and wants her brother to rent the flat from her?
First up, I would suggest they think hard about this - having a financial obligation with friends or family rarely ends up with smiles all round

Second, she needs to examine her deeds and shared ownership agreement as there may well be clauses in there forbiding letting.
If not, she would be the landlord letting the flat to the brother and they need a 'Short Term Tenancy' agreement - samples can be found at www.rla.org.uk
Who pays for what is up to them, but it needs to be in writing, eg Rent includes electric, service charge and council tax.
They need to compare local rents for similar properties to set a suitable level.
But - my advice - don't let your flat to a relative if you want to continue getting Christmas and Birthday presents!

southwell · 14-01-2009, 10:53

Quote:

Originally Posted by Aragorn

So she is the mortgage holder and part owner and wants her brother to rent the flat from her?
First up, I would suggest they think hard about this - having a financial obligation with friends or family rarely ends up with smiles all round

Second, she needs to examine her deeds and shared ownership agreement as there may well be clauses in there forbiding letting.
If not, she would be the landlord letting the flat to the brother and they need a 'Short Term Tenancy' agreement - samples can be found at www.rla.org.uk
Who pays for what is up to them, but it needs to be in writing, eg Rent includes electric, service charge and council tax.
They need to compare local rents for similar properties to set a suitable level.
But - my advice - don't let your flat to a relative if you want to continue getting Christmas and Birthday presents!

Thank you very much, this is very helpful. You have pretty much confirmed what i was thinking.

**Rob** · 14-01-2009, 10:55

letting renting effectively it's the same thing.

Firstly the owner, the sister, as the landlord, needs to be sure she can sublet. Here own leasehold agreement from the block of flat's freeholder may stipulate conditions, The shared ownership agreement may state conditions too. Indeed the latter is likely to be the bigger issue. You cannot just sublet a flat, or indeed any property, albeit that many do. There are a whole raft of regulations to be considered, including deposit holdings, gas safety, furniture safety and so on. The mortgagee may need to be notified, and insurance covers may need to change.

As for the tenant, they need a proper tenancy agreement. It's irrelevant if the landlord is family, without a tenancy agreement neither tenand or landlord know where they stand if one or other messes up. Amongst other things the tenancy will define liability for bills and suchlike costs.

AndyCambs · 14-01-2009, 15:20

I let my place some years ago when I had problems selling it.
You need to inform the mortgage company - and you also need to inform the insurance company.
Take my advice and do the letting through a reputable letting agency. Mine wasn't that brilliant and I ended up pursuing the tenant through the courts for over a grand.
You'll also need to declare the income earned to the inland revenue, but you can allow expenses such as mortgage, insurance, wear and tear etc against the income. If you don't declare the income and keep no records then HMRC will assess what they think you have earned.

LSainsbury · 15-01-2009, 18:54

Quote:

Originally Posted by Aragorn

Second, she needs to examine her deeds and shared ownership agreement as there may well be clauses in there forbiding letting.

Spot on Aragorn. If she it not permanently living at the address or even just having another tenant breaks the SO contract and they could start proceedings.

BTW - I'm in a part buy / part so - I know how it all works!

wwe · 15-01-2009, 19:06

how much does it cost say to buy a flat couse i know a mate who wants to buy one then rent it out

LSainsbury · 15-01-2009, 20:31

Quote:

Originally Posted by wwe

how much does it cost say to buy a flat couse i know a mate who wants to buy one then rent it out

Is that same mate who wants to start his own business??

Depends on the area - check your local rag for the going rates...

rogerdraig · 15-01-2009, 20:48

http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/LettingYourHome/DG_4001391

http://www.landlordexpert.co.uk/

two very good sites

is there enough rooms to let out ?

if so then you can make some tax free money though you may well still need to tell your mortgage holder etc

http://www.direct.gov.uk/en/MoneyTax...ome/DG_4017804