DH being taken advantage of by brother

The arrangement was that ultimately on [MiL’s] death my BIL would rent the house from us at a reduced rate ...

but you haven’t said what you agreed that reduced rate would be. Not a set amount presumably but a percentage of market rate. You argue that BiL is only paying half the market rent for your area but what did you agree on and how much is BiL’s £400 short percentage-wise for the area where the house is?

Buying up social housing and then expecting to rent it out at a rate equal to homes which have always been in the private sector is a matter for debate. The right to buy is responsible for a good deal of the current housing crisis. Ex local authority homes hereabouts (in one of the least affordable cities in the UK) rent for considerably less than those on private developments.

Was this a situation where MiL had never asked him and his wife - (where is his wife?) to pay a fair share towards household costs. Why did you need to buy the house to make MiL last few years more financially comfortable? Taking a house out of local authority ownership automatically incurs more costs with regard to maintenance and a potential loss of income support for the occupant.

I’m not defending BiL for being a lazy but you have said yourself that MiL was worried about what would happen to him after she was gone. Why was she? Has he never been capable of fending for himself?

You have admitted you saw this as a long term investment and have said that you need his rent to pay for the improvements you want to make to the house. BiL may see that as you seeking to make substantial capital profits from the rent he pays you. Presumably you took advantage of the length of your MiL's tenancy to get a substantial discount on the purchase price.

Did BiL have any say in whether you bought the house in the first place? Why did you not buy it for MiL in her name and let her will the asset between her children?

I’m playing Devil’s advocate here but there are always two sides to a story and I would like to hear the other side.

You bought the house to give your MIL peace of mind re her son having somewhere to live, which was very nice for her and for the son living there, however, you would have bought it very cheaply from the council and stand to make a very good profit from selling.

Instead of you buying it at that time, the son could have been made a joint tenant and continued to live in it after the mothers' death at a low rent.

I think you have got more out of this deal than the son has.

If there is no formal agreement then there is no formal agreement on upkeep etc.

You could consider an agreement with the low rental continuing if benefits will not pay more ..

but tenant must undertake costs and trouble maintenance/repairs.

Then it's up to him - keep it viable or move out and vacate when it gets tough and he actually has do do something. And if after this formal agreement he doesn't pay you have recourse to the law.

Whichever way you tackle it its going to cause facility difficulties, I dont think there is any option that doesn't.

Sorry, last sentence = family difficulties.

I’m afraid that if there’s a tenancy - which there is, regardless of whether there’s a written agreement - the law imposes certain maintenance obligations on landlords Wyllow, and you can’t exclude them in an agreement.

Can they write a bespoke agreement to that effect tho, GSM? Ie legally that the rent is fixed plus % rise pa as proper but the tenant be responsible for maintenance? As in some kind of family trust agreement?

No, a landlord cannot contract out of their statutory maintenance and repair responsibilities. Any attempt to do so is invalid.

Theexwife Council rents are no longer cheap. I believe they have to be set at the market rent and te tenants can apply for housing benefit.

As to your judgment on the family for not just getting the son made a joint tenant. You have no idea what was happening at the time and I doubt if capital gain featured high in the OP's decision to buy the property. They could not possibly have known how house prices would, or would not have risen.

Decisions such as these are made for many complex reasons and you cannot second guess people's decisions, well after the event and with very importfect knowledge.

Thank you for that GSM.

Can however a purely family deed be drawn up with terms and conditions of a family member staying in the O/P's house and "paying towards it"?

No.

We own the house. We gave MIL the money to buy the house outright and in return she left it to us in her will. It was all done properly through Solicitors and there was a lien on the house so that it the house had to be sold to meet her care costs then we would get back the money we had paid. The arrangement was that my BIL and his wife would live there rent free whilst she was alive as they were her main carers. We wanted to lessen her financial burden and give her some additional disposable income. It didn’t quite work out like that, but that’s a different story. We have sorted out a tenancy agreement, but had to wait for probate etc to go through. The plan is to do everything properly for all our sakes. I should have sent them the tenancy agreement a couple of weeks ago but have been unwel as there is some uncertainty as to who is going on. Sister-in-Law keeps threatening to leave (understandably enough) unless the idle lump of a BIL sorts his act out. I think we are going to have to consult with a solicitor again and find out what our options are. I can’t believe BIL though, we have offered him exactly what he said he wanted and he is too idle to meet his end of the deal. Sadly, we may end up selling in the longer term.

Another case of not hearing the whole story at the outset.

In response to other questions. The rent was agreed at £400 a month. In the local area the starting price for property is £750 for a two bed, this is a three bed semi. Yes, we could have bought the house and it could have been shared between my husband his siblings, and yes we will ultimately benefit if the property is sold, but we did not buy it to sell it. Furthermore, we bought it by making huge sacrifices, we are not rolling in it. We all (the whole family) had lengthy conversations before we did anything and everyone agreed. We felt it was a win win, my MIL would no longer be paying rent, we met all repair costs, MIL desperately wanted to carry on living there an not be at risk of having to move and for her youngest son to continue living in the home he had always lived in. He knew he would not be able to afford to live in a comparable house without this arrangement. Yes, we bought what had been council housing stock, as have many others.

Oh I forgot to mention, the tenancy could not be transferred to the son as it had already been moved from late FIL to MIL and only one transfer is allowed, which is why my MIL was worried in the first place that her youngest son would be forced to move on her death.

Germanshepherdsmum

Another case of not hearing the whole story at the outset.

Didn’t want to bore people to death… 😂

You would have saved a lot of supposition and questions by giving the full picture. I hope the tenancy agreement has been prepared by a solicitor.
A lot of people disapprove of property being taken out of the council housing stock in this way. The fact that many have done it doesn’t make it right. Your brother in law is living in a house which would have provided a home for a family who are currently homeless or living in substandard accommodation.

I dont think you're allowed to take housing benefits from a relative ,its assumed as family you'll make other arrangements with them for rent .The benefits agency ,ight want their money back when they find out its been rented and claimed for by your OH's brother

I totally agree with GSM here. Why was the fact that the money for the house purchase was given to the mother to buy it not declared in the original post?? Yes, a tenancy exists whether you have documentary proof or not; it sounds to me that the OP did not have good financial advice in the first place. It's a mess and one that could have been avoided.

Despite my disapproval of the whole business I will give you a word of advice - assuming that you insure the building rather than leaving it to your unreliable brother in law, make sure you have a landlord’s insurance policy, not an owner occupier’s, or you will have no cover if the building is damaged by the usual ‘insured risks’.

Dee1012

Have you checked locally that Housing Benefit will / are paying the housing costs?
Perhaps worth looking into....I do know someone who wanted to rent a property to her sister and there was quite a struggle as her local council wanted to view it as a 'contrived tenancy'.

Yes, we were aware of this which is why we set the rent so low as we knew he would not likely get housing benefit. This was all discussed between the whole family at the time of purchase. The deal was he could live there rent free whilst ever MIL was alive as he (or rather his wife) was her carer. MIL willed the house to us and we said once probate went through he would have to start paying rent but that we would keep it affordable for him and he could live there as long as he wanted. The plan was that we personally would not benefit, but eventually the house would be sold on our deaths and our beneficiaries would maintain the same arrangement with BIL and only sell the house on his death or if he went into a care home. We kept our end of the arrangement as did MIL We naively assumed BIL would keep his end of the deal as he would be the biggest loser if we were forced to evict him and sell. We honestly thought that he would recognise what we were doing for him and keep his side of the agreement.

This is sounding horribly as though you have given him a lifetime tenancy.

I question your motives in buying this house. Pensioners are entitled to housing benefit, plus if their mobility changes they can be rehoused in something more suitable. I had a friend who did this, it meant that his dying eighty year old mother had to climb stairs until the end of her life. But when they died, hey presto he had a house. Bought with all the discount they had accumulated over the tenancy. Presumably you will have gained the equity accumulated over the eight years and benefitted hugely from the discount. I am not even sure it is legal to buy a council house that you yourself don’t live in, but even if it is, it’s morally wrong, and from a moral standpoint I don’t think you should be charging rent and should sell it back to the council.

The purpose, the execution of the plan..... set up to fail from the very beginning

Nobody, other than of over state retirement age, can claim housing benefit anymore. It is a legacy benefit. Housing costs are now claimed as part of Universal credit as part of the efforts to roll all benefits into one, wage like payment for claimants. I am sorry your BiL is being difficult, but I really do not approve of taking social housing out of the stock, and your claims of not being wealthy, and not planning on selling, and just trying to calm your late MiL's fears just do not ring true with me, sorry. I used to work with a woman who suddenly decided to 'calm her parents' worries about their rent' by buying their council house for them....when they were in their late 80s. Hmm. Yet another desperately needed home taken out of stock.

Hithere

The purpose, the execution of the plan..... set up to fail from the very beginning

Perfect summary.