Friends And Family
Date Published 26 October 2011
It seems like the ideal solution, rather than leave your home empty or have a stranger living
there, you have a really good friend who would love to move in – the perfect partnership,
or is it?
The initial appeal to the homeowner is that their friend will look after the place ‘as if it
were their own' – one of the biggest fears for landlords is that their home will be trashed
by strangers. Another common concern is ‘What if they don't pay the rent?' Somehow
people feel that as they can trust a ‘friend', defaulting on the rent would be unthinkable.
There is a possibility that you could return to a property which has not been looked after,
needs costly repairs, the rent hasn't been paid, or the worst case scenario – a lengthy
court battle and a friendship in tatters.
and Family .........
Then there's the dilemma if you have young adults still living at home, desperate for their
own space but without the funds to buy their own place – do you offer them a leg up by
allowing them to be your tenants? Approach this one with extreme caution. As a parent
you might find yourself very low on the list of priorities if their finances hit a rocky patch.
But if nothing can persuade you against it, here's how you can minimise the risk:
It's business not pleasure– it may seem unnecessary to formalise things but a
deposit and Tenancy Agreement is essential so that both parties are aware of and agree
to their obligations. Legally, you will be a landlord receiving rental income, which is liable
for tax, and you will need to comply with legislation relating to
deposits, gas safety and energy performance certificates.
Keeping up appearances - if you're going to work abroad, it would be wise to use an
agent to manage the property. This way the property is inspected on a regular basis,
and any issues flagged up immediately. A tenant will find it easier liaise with an agent
than with you. A professional inventory, will establish the exact condition of the property
and contents at the start, avoiding disputes in the future.
Money matters – most people don't like discussing money, especially with friends and
family, so an agent will check that the rent is paid, chasing late payments should they
arise. It would be an awkward moment having to ask a friend, son or daughter to pay up.
It may seem like a good idea but it could be a recipe for disaster – think carefully. Talk to a
specialist letting agent like Honey Lettings, who will be able to advise you on market value
as well as legal and regulatory requirements.