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Letting someone stay in your house rent free

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    #32
    Gordon Minard
    Registered Users Posts: 117 ✭✭Gordon Minard


    Hi Mick:

    I had a possibly very, very similar situation in the last 3-4 weeks.

    My step daughter, partner and two kids were had been living in the spare room of his mother's house up until a "parting of the ways" occurred at that time ( 3-4 weeks ago ).

    They arrived to me - really, really upset and I was devastated for them. I was, myself, totally upset at the situation and wanted to do what I could for them.

    I was really worried that, due to living in "each other's ear", we would have a falling out and, in anyway, living in a single room is no way to live.

    I told them that they could move into the spare room in my house provided that:

    a) it was short-term
    b) I would be directly involved in their house hunting efforts

    When I got involved in their house hunting efforts with them I discovered that they really weren't searching that hard for a place to live over the last 12-14 months and were really waiting for the council to give them a house.

    This, basically, pointed to an open ended arrangement where there was never a possibility of a good result. I had to sit with them and, ultimately, they are now living elsewhere.

    Apart from legal consequences etc. you have to think of how you are going to "book end" this. What happens if, next Summer, you want to go to your house in Clare for holidays and can't because they are still there?

    Everybody wants to help - expecially help family and loved ones - but it has to be reasonable on both sides.

    As far as I am aware the Medical Card is all about income whereas Rent Allowance etc. is about Leases etc. Ultimately, in the case where they are in receipt of Rent Allowance, it is the State that is putting your roof over their head and it is the state that would be asked to account if they were come to harm because of living in sub-standard accomaodation - I am not, in any way, saying that your Accomodation is Sub-Standard I am just speaking in general.

    Sit and talk with them. Understand what they are looking for and get them to understand your concerns and, if you only took €5.00 off them in the week, do so in the context of a duly executed lease. Do it before you ever hand them a key! Now is the time - it's too late once they have made your holiday home their Family Home.

    Gordon


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    #33
    Chucken
    Registered Users Posts: 9,459 ✭✭✭Chucken


    delthedriver wrote: »
    Respectfully, there is no housing crisis in Co. Clare ..


    http://www.clare.fm/news/mid-west-simon-welcomes-proposal-tackle-housing-crisis

    I live in East Clare and its near impossible to find anywhere to rent. I can understand the OPs friend maybe wants to try make a new start? As someone else said, if he has a 6 month lease, then he can apply for RA.(not necessararly on that house)
    It leaves the OP in a bit of a pickle though. Is he prepared to go down that road or leave the house empty? I've often wondered that actually, if holiday homes were let out for the winter on cheap rent (with a contract re utilities etc) would it help everyone out.


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    #34
    mickrourke
    Registered Users Posts: 686 ✭✭✭mickrourke


    Thanks to everyone for all the advice. This is a tricky one - like I said, I am only trying to help someone out but if I am going to end up massively out of pocket just for doing the right thing and they are not going to end up out of pocket, then it's not the right thing to do.

    I can either do it with a lease, and register a a landlord and then start charging rent, maybe nominal but just to cover my costs - then i can transfer utilities over to his name and do it that way or just let him continue as a guest and put my faith in him, the future, etc.

    I see a quick chat with a solicitor might be in my near future.


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    #35
    Mrs OBumble
    Registered Users Posts: 25,688 ✭✭✭✭Mrs OBumble


    Ring your insurance company too, and get them to quote you for the possible scenarios. I suspect that might help you decide how to approach things.

    Tell them the full truth of the situation.


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    #36
    the_syco
    Registered Users Posts: 37,295 ✭✭✭✭the_syco


    mickrourke wrote: »
    Someone wants me to stay there for quite a while and this makes sense to me to have someone in over the winter to keep the place lived in, heating on etc.
    So this person gets social welfare, medical card, etc, and wants a lease, proof they are staying there, etc.
    Lease equals tenant. And possibly a tenant that you'll never get rid of if they're living there for free.


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    #37
    delthedriver
    Closed Accounts Posts: 4,958 ✭✭✭delthedriver


    Op, irrespective of how well you know this person, you must do the right think for yourself.

    Buy a dehumidifier and control the heat & light via time clocks. I think it will save you a lot of hassle.

    This way you will still have unhindered access and use of your holiday home for weekends, Christmas, New Year etc.

    Your holiday home is an extension of your home albeit at a different location, personally I would not consider renting my holiday home to anyone!!!

    Of course we have friends and family who stay as invited guests. Your holiday home is your holiday home , not an investment property.

    I appreciate you are trying to help a friend, however if you wish to remain friends long term, do not consider what you are proposing any further. Kill it now !:)


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    #38
    pc7
    Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 13,984 Mod ✭✭✭✭pc7


    mickrourke wrote: »
    And who'd have thought doing someone a favour could be such a pain, I may need to do this properly and even charge a small rent as this is going to cost me when it shouldn't. At least it will be all above board when completed and I can do a 6 month lease or something for minimal rent.

    No good deed goes unpunished!


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    #39
    the_syco
    Registered Users Posts: 37,295 ✭✭✭✭the_syco


    delthedriver wrote: »
    I appreciate you are trying to help a friend, however if you wish to remain friends long term, do not consider what you are proposing any further. Kill it now !:)
    This. Also, the friend sees you as a rent-free house. If they had offered money from the start it would've been a lot different, but they didn't.


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    #40
    Ficheall
    Registered Users Posts: 9,018 ✭✭✭Ficheall


    the_syco wrote: »
    If they had offered money from the start it would've been a lot different, but they didn't.
    Where did you glean this bit of info from?


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    #41
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    Wouldnt be arsed with that messing jour already on boards worrying about it. Next up would be they refuse to move and think its their place.


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    #42
    the_syco
    Registered Users Posts: 37,295 ✭✭✭✭the_syco


    Ficheall wrote: »
    Where did you glean this bit of info from?
    User implied it, but I do note what you are saying.

    =-=

    The friend perhaps want a lease as proof that they are staying there to get the medical card for that area, and social welfare. Note that the person may be there 24/7 and thus cause a lot of wear and tear, unless there is something in that area that is of interest to him (a certain sport, for example), other than a rent-free house.


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    #43
    El_Duderino 09
    Registered Users Posts: 19,966 ✭✭✭✭El_Duderino 09


    It sounds like you can see the benefit you could offer your friend by allowing him to stay there for the winter and that is commendable. When exactly will he move out? If he has nowhere to live now, what makes you think he will have anywhere to live then?

    Imagine he agrees to move out in April. April comes and he is faced with packing up and becoming homeless or refusing to move. Shelter is one of the basic needs and I imagine most people would do almost anything to keep a roof over their head. He might be your friend and you don't have the heart to say no to him now, imagine how hard it would be to tell him to leave and sleep on the street then.


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    #44
    delthedriver
    Closed Accounts Posts: 4,958 ✭✭✭delthedriver


    It can be challenging enough dealing with tenants when everything is straight forward. Op, what you are proposing could change your life forever! Sadly I don't mean for the better.:)


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    #45
    Spanish Eyes
    Registered Users Posts: 15,872 ✭✭✭✭Spanish Eyes


    I wonder if a Caretaker's Agreement would work here? Kind of like a "house sitter" arrangement?

    No lease, no PRTB etc. and a start date and end date for the agreement.

    I'm just throwing it out there for rebuttal as I'm interested myself.

    I found this, and I know it is not an Irish site, but gives some ideas.

    Not sure how enforceable it would be though!

    http://www.mindmyhouse.com/advice/advice_legal


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    #46
    Nomis21
    Registered Users Posts: 1,409 ✭✭✭Nomis21


    I think he is taking a liberty. I would be asking him to leave.

    No friend of mine would be asking for a lease if I gave them a free place to live.


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    #47
    Crumbs868
    Closed Accounts Posts: 438 ✭✭Crumbs868


    Mrs OBumble wrote: »
    If your friend is rented a house at less than market rate, then s/he is potentially liable for tax on the "benefit in kind" - that's not the right name for it, but the principle applies.

    Now, depending on what allowance / benefit s/he is getting this may not be an issue. But if the welfare amount is taxable, it will be using up most or all of their tax-credits, so it may be an issue.

    Of course the market rate for a house in West Clare in the winter is probably very low. But still it will be more than E1 per month.

    You are mixing all your taxes up, CAT (gifts of which you can receive €3k tax free every year) and Income Tax are taxed independently.

    Think boards has a policy of not allowing advice on taxes for this very reason as people who don't know what they are talking about give advice at the risk of someone following it assuming the advice is good.


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    #48
    madmaggie
    Registered Users Posts: 2,827 ✭✭✭madmaggie


    Two words, squatters rights.


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    #49
    endacl
    Registered Users Posts: 22,233 ✭✭✭✭endacl


    Cabaal wrote: »
    Sounds dodgy and certainly sounds like they may be trying to claim rent allowance on the free house

    If you do provide a lease (baaaaaaad idea), make sure that it states that rent is set at a euro per calendar month. I'd like to see the reaction when/if rent allowance is applied for.

    :D


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    #50
    shreddedloops
    Registered Users Posts: 539 ✭✭✭shreddedloops


    I'm in a similar problem to OP, however I'd imagine there's much less room for serious issues arising.

    My parents recently bought a house with the plan to rent it out. However, since myself and my girlfriend are currently in a position to move in they would be happy for us to do so but would only want to charge us about half of the 'going rate' for rent.

    We're unsure at the moment whether the property would have to be registered with PTRB or not?

    And in which cases would we have to pay gift tax/they have to pay income tax etc.?

    Seems like a minefield of an area so any tips would be welcome.


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    #51
    ceecee14
    Banned (with Prison Access) Posts: 215 ✭✭ceecee14


    Your friend needs a lease for the social welfare to continue claiming his benefits as he will be changing address he needs proof of new address from landlord. Anyway if he was trying to claim rent allowance he would need you to fill up some of his rent allowance form.


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    #52
    delthedriver
    Closed Accounts Posts: 4,958 ✭✭✭delthedriver


    shreddedloops wrote: »
    I'm in a similar problem to OP, however I'd imagine there's much less room for serious issues arising.

    My parents recently bought a house with the plan to rent it out. However, since myself and my girlfriend are currently in a position to move in they would be happy for us to do so but would only want to charge us about half of the 'going rate' for rent.

    We're unsure at the moment whether the property would have to be registered with PTRB or not?

    And in which cases would we have to pay gift tax/they have to pay income tax etc.?

    Seems like a minefield of an area so any tips would be welcome.

    If your parents are renting a property to you or anyone else it needs to be registered with the PRTB.

    Yes they are liable for tax on incomes earned from renting out bthe property.

    Your parents are not gifting you the property, so gift tax is irrelevant.

    :)


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