DH being taken advantage of by brother

Oh my goodness you have been way too kind, he should never have had 8 years rent free unless he is returning your kindness in some other way and it doesn’t sound as if he is I think you should put the rent to where you want it to be and stop being so helpful and if the nephew moves in he must pay too

As BlueBelle says, otherwise sell the property and he will have to find some other arrangement.

It's all very well giving a reduced rate of rent but if this is an investment property that is not what should be happening. You need to cover costs and make some money or the angst is not worth the effort. Your BIL is taking advantage of the family connection and is obviously banking on that connection to continue as suits him.

In your situation I would give BIL an ultimation, pay market rent or very close to or you sell the property.

Wondering who legally owns the house if it was bought by you for your mother?

Am I correct in understanding that the house belongs to the OP and her DH?
If that is the case and there has been no rent paid by the BIL in all the time he has lived there it is clear that boundaries were not set from the outcome and little wonder that he is digging his heels in now - he's got a roof over his head and no inclination to pay towards maintenance of the property.
Who is paying the council tax on the house?
I think it is time for a full and frank discussion with your BIL, he either starts paying proper rent - draw up a tenancy agreement asap - or he buggers of and finds someone else to leach off - good luck with that too!
It might be worth seeing a solicitor too.

What a difficult situation. Section 21 came to my mind. I’m sure germanshepherd’smum will be able to give you valuable advice.

What a mess. You should have had this arrangement properly documented at the outset. I assume you don’t have a written tenancy agreement. You say you don’t want to evict him, but without that threat what do you think will happen? By the sound of things he’s a layabout relying on benefits to pay the rent. The only advice I can give is to harden your hearts and see a solicitor. He’s taking the proverbial.

Go and speak to Citizen's Advice, they have lawyers who can advise you what you should do - and how you get him out of the house if he refuses to go.

Here are links to two government websites that will give you a guide to setting up a legal tenancy agreement with your BiL
www.gov.uk/tenancy-agreements-a-guide-for-landlords www.gov.uk/renting-out-a-property

The first link ends where the second set of 'www' start. I thought I had keyed in a lot of spacees between them.

This happened with distant relations of mine. They bought the house for the DH mother's peace of mind and let the younger brother stay on rent-free just like you. They had also furnished it with all-new white goods and a lot of furniture.
When legal action had to be taken to get him out of the house because he was not paying rent or looking after the property.
He moved out without informing them when they eventually got access it was completely empty he had taken all the furniture and white goods. The rift has never been mended.

It does seem like a call to a solicitor is a good idea first, to find out what you can and can't do legally, but agree with all above - you can't go on this way.

8 years seems a very long time for the finances to be sorted.
Why on earth did it take so long and why couldn’t you charge him rent in the meantime?

If you and your husband own the house, it seems to me that your BIL has a choice. Either pay the rent or you decide who lives there and let your nephew move in.

I appreciate your husband doesn't want to kick his brother out, but if he's not a rent paying tenant, it seems to me that he doesn't have the choice of who else lives there.

But I agree with the others. He's got used to living rent free, knows you don't have a mortgage on the property and doesn't see why he should pay rent to his brother.

That’s what I thought at first Sago, but I think it’s 8 years since the house was bought.

Right to Buy opportunities were for the named tenants only, regardless of who paid for the purchase.
Maybe OPs BIL felt that he has a right to stay, if he was a tenant before the purchase.

He started paying £400 a month in September (literally half the going rate to rent in our area)

Apart from the 8 years free rent, who set the £400? Presumably your husband?

Or are things set in a will?

You and your husband are being far too generous by the sounds of things.
Your DH does not have to be "taken advantage of" if he chooses not to be? Presumably?

If the nephew is moving in I'd make sure, that as a new tenant, he has a proper contract. Good advice on how to move forward with legal protection has been given and I would follow it. If all else fails, just sell it and remove the stress.

If he is getting his rent paid by benefits then you could usefully find out how much they will pay locally? Ie if its an ex council house then it should be possible to find out what neighbours who are still renting pay?

In terms of benefits, is he in the protected "cannot work/illness" category, or the "has to be looking for work" category. If the former, its a more stable situation. if he is in and out of work then gets more complex as the benefits situation is, to paraphrase, "a right mess".

If all else fails, just sell it and remove the stress

My thoughts too but you’d have to be quick to beat the April 50% reduction in the CGT allowance ☹️

You can’t sell it until you get him out!

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'.

If you come to evict him you will find that regardless of the fact that there is no paper contract a tenancy has been created, and the BIL has some legal protection. In that case you would have to take the eviction route which can be very lengthy.

To be valid a section 21 means you need all your ducks in a row in respect of certain documents that you have to have provided to the tenant before you issue it. You can make a minor clerical error, the tenant can sit tight and then mount that as a defence when you apply to the court for possession. That may well result in the section 21 being declared invalid and the LL having to pay all the court fees. Then you have to begin again with all the legal fees to pay.

You can obtain excellent advice on Landlord Zone website.

I would take some legal advice from a solicitor who specialises in housing law. There are rules about council tenancies, which might apply to your BIL if he lived long term in the house before you purchased it at a reduced rate.
Also receiving housing benefit and having a relative as the landlord receiving that benefit, also has implications.
Not an easy situation for you all.

Precisely biglouis. There is a tenancy, but its terms are anyone’s guess.

The first mistake was buying the house and the reasons why

Honestly, the writing was on the wall.
BIL's behaviour is predictable and expected.
He was enabled by his mother
You and dh enabled his mother
Now you continue the cycle

You need to decide when this ends and I am afraid you need to talk to a lawyer about tenancy rights and eviction process so you are informed

Would your dh and you evict his brother, after all these years? That's the question here