Advice Renting a House Out

[Trem]

It is looking like my mum won't be coming home, she will be going into a care home which as we all know has to be paid for by my mum. Our council offers a deferred payment option which means you don't have to pay the bill until 56 days after death. This will allow us to rent mums house out and put the money into a bank account ready to pay off the debt of her car (it will be around £250 a week because she qualified for the lower amount).

She has a detached 3 bedroom house that is in need of decorating and new carpets throughout, this I know. but what other things are needed to be done legally (I have googled it and read but wanted some normal advice), she has an old style fuse box, will I need to put a new consumer unit in there (I can do that but will have to pay someone to test it)? Do you have to have all the electrics PAT tested? Again, I have that certificate as well but I would be amazed if you have to PAT test stuff for renting. I just don't know what is required my end and I will be honest I am fucking freaking out a bit.

Coming from the hospital and being asked if you want to resuscitate your mum if she needs it and saying "no" is not the best way to start a Monday.

 

[old.Tohtori]

Poke @Scouse into this thread. Probably the most experience(from what i remember).

On a sidenote; best wishes and strength to you and family.

 

[Moriath]

Best way for a novice would be to ask an agency to sort it out for you. They take a % but find the tenants and sort out all the things needed to comply with the law.

Or wait for @Scouse

 

[Scouse]

That sucks @Trem. sorry to hear it.

as we all know has to be paid for by my mum

Not necessarily.

First thing I'd do, if you've not already done it, is talk to a solicitor, today, about getting your mum's house put in a trust (in your or another person in your family's name) so it can't be sold by the government to fund her care home fees. You have to protect that home as an asset and getting it signed out of your mum's name will do that.

That way you'll have the government paying the care home fees you can put the rental income towards topping them up and/or providing for holidays that you can take your mum on.

Protect that house as an asset and don't let the government get it's hands on it to fund the care home. < Just find a solicitor on t'internet - or better still ask a family member if they know one and get that stuff sorted as quickly as possible.


After that it's a trivial matter to sort out renting a house out - an agency will talk you through it (talk to a couple and let them know you're talking to a few agencies then go with whichever agency makes you the best return).

In terms of renting, put new carpets in and paint the whole thing magnolia. There's a gas test to be done (costs about £40 for the year) and if the electrics really are dicky then a new consumer unit may be a good thing - though not a legal requirement if things aren't dangerous. If you want to replace it why not wait until you've got renters in and then replace it whilst they're there? It makes you look like a good proactive landlord.

 

[Job]

The government is pushing local authorities to register landlords in certain areas and the process is painful...Liverpool council for an example want gas check, consumer unit, smoke alarms, low E glazing and even fire evacuation instructions on the walls...basically hotel standards.
Just check with your council .
If not you only need a landlord gas cert and tell your house insurers.

 

[Scouse]

Smoke alarms are a legal requirement in all rented properties IIRC. Easy to buy and fit.

 

[~Yuckfou~]

I have a similar situation to you Trem, fortunately not with a relative though. The property owner is in fairly high quality long term care. His pensions cover most but not all of the costs, so additional rental income from his bungalow would really help so that he's not spending his savings and then having to sell his house before the council start paying up. Although he's 94 and in care he is in pretty good nick. So he could be there for a few years yet.
I was under the impression that the councils did not allow you to transfer assets so soon to care time to avoid costs. Not sure but something I'm going to be checking in the next week or so. The property we are looking to rent out needs decorating and has an old (but well maintained) hot air blower heating system, and everything else is also from the 70's. I'm going to use a letting agent, hopefully then it's their ass if it goes tits up. I also don't want the mither.
I will be asking the agent

• Do we do the property up? Will the expense be worth any additional rental income?
• Do we leave the (half) decent furniture in?
• Eventually it will be sold, will tarting it up make more money? (It will undoubtedly be bought by a developer who will tear it apart anyway)
• How much notice will we need to give tenants when we eventually want to sell?
• What sort of property insurance do we need?
• What else do we need to consider?

I think I already know the answer to most of these questions, but it would be nice to get any tips from someone who does this for a living.
Hoping to meet with an agent this week, I'll pass on any nuggets of info I get.


EDIT
Just found this....

The financial assessment will also take into account whether you own property, usually your house. Under certain circumstances it might be necessary for you to sell the house to pay the cost of the care home. If your financial resources are tied up in the house Sefton Council may be able to help you with care home costs prior to its sale. The money that the Council has spent will be recovered when the house is sold, less the first 12 weeks after you permanently moved into the home.

The value of your house will be disregarded if any of the following apply :

• the property is occupied by your spouse or partner (except where you are estranged or divorced).

• the property is occupied by a relative or person you are responsible for who is either;
  aged 60 or over;
  a child under 16;
  incapacitated.

 

[Scouse]

I was under the impression that the councils did not allow you to transfer assets so soon to care time to avoid costs

Not sure about this tbh. About to go through it all with my mother - have her sign over her flat and power of attourney to me and my sister.

 

[Trem]

Thank you lads, thank you @old.Tohtori for the kind words mate and thanks for the info @Scouse really has made me feel better actually, it honestly has, cheers chum.

Putting the house in a trust was discussed when we took out power of attorney and it is the only way of guarding the property from the care costs but we didn't do it for a couple of reasons, I think the first reason was there is a small mortgage still on the property and I think it has to be mortgage free to do it (IIRC) and yes I could of paid the mortgage off but I felt it would of been a bad move at the time, I just did. It is very hard for them to chase you if the house is in a trust but they still can.

Thing is we should cover a lot of the care costs by renting the house and that is fine, I don't mind that.

@~Yuckfou~ they have all bases covered for people like me mate, first and foremost it's about my mum but secondly I want what my dad got bought out of for a pittance when they got divorced because he wanted somewhere for me and also I want that house for my kids but the cold hard truth is I can't do anything now, 11 years ago if I had known all this I should of paid the mortgage off, put the house in my name then let mum stay there but 11 years ago it wouldn't of been an issue (they can trace back 10 years to see if you have done anything to avoid paying for care).

Edit - you replied as I was typing the above Scouse

Not sure about this tbh. About to go through it all with my mother - have her sign over her flat and power of attourney to me and my sister.

Yes they can and they will mate, 10 years back they can trace.

 

[Edmond]

Sucks dude, sorry to hear.

My brother rents a couple of places out and is just refurbing one right now, so he will be up to speed on all the current legal stuff

He's had to have a new boiler put in and some electrics done too

Let me know if you have any questions that the others can t answer and I can ask him if he knows

Chin up fella

 

[~Yuckfou~]

Are you claiming Attendance Allowance for your mum? She's entitled to it.
Also depending on where you live and your mums health etc, you "might" be able to get the local Primary Care Trust to help or pay in full, worth checking.

 

[Trem]

Are you claiming Attendance Allowance for your mum? She's entitled to it.
Also depending on where you live and your mums health etc, you "might" be able to get the local Primary Care Trust to help or pay in full, worth checking.

Yes mate, she gets every penny she is entitled to, my wife is shit hot on stuff like that. Mum actually has more going into her bank each month than I did before I quit my job to look after her.

I get £61 a week which will now stop because mum has been in hospital for two weeks.

 

[~Yuckfou~]

Good, Mrs Yuck is clued up on the benefits etc due to her profession. Your mum has paid in to the system so glad she's getting some back
Can't see there being much left in the pot by the time we need it

 

[Moriath]

@Scouse is this similar to what you used to be able to do. Ie my mum and her sister hd the house signed over to them and after their mum survived seven years no one had any claim against it.

I thought that loop hole got closed.

What's the trust thing?

 

[Scouse]

@Scouse is this similar to what you used to be able to do.

Pretty much this. The trust would be dual ownership IIRC.

Like I said, lawyer, not Freddyshouse

 

[Moriath]

Pretty much this. The trust would be dual ownership IIRC.

Like I said, lawyer, not Freddyshouse

Yeah. Just working out what to do with my mums house eventually. She's on her own and we don't really want all the value to go in fees. So transferring it with her living in it would be best. Or do they have to vacate this

 

[Scouse]

Yeah. Just working out what to do with my mums house eventually. She's on her own and we don't really want all the value to go in fees. So transferring it with her living in it would be best. Or do they have to vacate this

Nope, they can live there. Get it done sooner rather than later tbh. Especially with what's been said above.

 

[Edmond]

My dad signed his house over to my brother and I in '98 just after my nan died and the government took over £80k in care costs. 10yrs ago he decided he wanted to move, so we got a bigger house for him (thinking long term investment) and the fuckers had me for capital gains tax!!!

 

[Mabs]

That sucks @Trem.

First thing I'd do, if you've not already done it, is talk to a solicitor, today, about getting your mum's house put in a trust (in your or another person in your family's name) so it can't be sold by the government to fund her care home fees. You have to protect that home as an asset and getting it signed out of your mum's name will do that.

this, though it may be too late, BUT iirc, they cant force a sale IF someone is resident there, so if you or sibling/nephew/potato are/can live there for 6 months you can block it, afaik

 

[Scouse]

My dad signed his house over to my brother and I in '98 just after my nan died and the government took over £80k in care costs. 10yrs ago he decided he wanted to move, so we got a bigger house for him (thinking long term investment) and the fuckers had me for capital gains tax!!!

That can't be right? When did the care costs kick in? Your nan's house or your dad's house? Further more detailed explanation to be had please...

 

[Edmond]

She was my mum's mum, not my dads, so not classed as next of kin. He tried to get power of attorney but 'they' decided that dementia had set in and wasn't in a fit state to give it to my dad, so she was put in a care home and we had to sell her house. The proceeds were used to fund her care until they got down to £16k

My dad then decided to sign everything over to my brother and I so the same wouldn't happen (this was '98, the rules may be different now). When he decided to move in 2005 we had dodged the loop hole, but as I didn't live in 'his' house, but my brother did, I got a capital gains tax bill when we sold the house due to the profit we made on it

 

[Scouse]

Ah, makes sense.

CGT is the one thing that'll piss me off about selling rental properties (for sell I shall eventually unless I'm monumentally unfortunate and have kids). I could, of course, kick renters out and stay there for a couple of years, depending on how big the corp. tax bill would be and the loss of rental income. You don't pay CGT on your primary residence so there's tax to be legally avoided there if you're prepared to sacrifice...

 

[Moriath]

My dad signed his house over to my brother and I in '98 just after my nan died and the government took over £80k in care costs. 10yrs ago he decided he wanted to move, so we got a bigger house for him (thinking long term investment) and the fuckers had me for capital gains tax!!!

Yeah if you sell it you pay capital gains.

 

[Trem]

There are no tricks or loop holes to speak of to avoid care costs. If someone is living in the house in question they will check, it won't just be a nice chat telling someone on the phone that they can't have their money because cousin Cletus is staying there. They will want lots of proof going back a long time.

What you are thinking of to get out of paying for care they have already got it covered and yes (after speaking to the wife) a house put into a trust is much harder for them to get at but they still can if it seems obvious why you did it.

 

[Moriath]

There are no tricks or loop holes to speak of to avoid care costs. If someone is living in the house in question they will check, it won't just be a nice chat telling someone on the phone that they can't have their money because cousin Cletus is staying there. They will want lots of proof going back a long time.

What you are thinking of to get out of paying for care they have already got it covered and yes (after speaking to the wife) a house put into a trust is much harder for them to get at but they still can if it seems obvious why you did it.

I thought they closed that loop hole ages ago.

 

[Hawkwind]

Smoke alarms are a legal requirement in all rented properties IIRC. Easy to buy and fit.

So is the "GAS Safety Check", have to have that certificate redone every year on our properties.

 

[Trem]

Spoke to a mate and the gas and electric checks are legal requirements and yearly for the gas, electric I don't know.

I also have to get permission from the mortgage lenders to rent the house, then there's the insurance to sort.......

Edit -

I had a mini melt down last night, I need to calm down otherwise I will be in the bed next to my mum or worse It just all seems so much fucking work and hassle and it isn't helping because my wife is working and can't do any of the complicated stuff for me. I can do it but I forget everything or my brain goes to somewhere else when they start talking, like yesterday when the doctor was having the very serious talk with me about letting my mum die if it came to it and all I could do is look at his massive ear hair and think "whatever reply I give the fucker won't hear me with those bastards stuck in there". I am really useless at theory but ok at practical

 

[Ch3tan]

The government is pushing local authorities to register landlords in certain areas and the process is painful...Liverpool council for an example want gas check, consumer unit, smoke alarms, low E glazing and even fire evacuation instructions on the walls...basically hotel standards.
Just check with your council .
If not you only need a landlord gas cert and tell your house insurers.

That's not strictly true, the government introduced legislation that would allow councils to use licensing where it could fix issues with bad landlords. The councils turned it into a stealth tax, croydon just pushed it through and enfield failed due to a legal challenge. The government have raised concerns I've the way councils have used the legislation and are changing it from 1st April to require central gov review should local councils wish to use it.

 

[Job]

Funnily enough I saw my mate today and he said the exact same thing...here's the link questioning the legality...bearing in mind this has cost him 26 grand so far...yes 26 grand.



http://www.landlords.org.uk/sites/default/files/15-03-11 BL to LAs re Selective licensing.pdf

 

[TdC]

sorry to hear Tremlar old chum. don't feel bad for being on edge mate. when it comes to be my mum's turn I'm probably going to go stark raving mad for a while. don't really have anything to contribute, other than the remark that it could be worth it to pay some expert some cash to have a clear list made of your options. it would be a right shame if you set down a course of action, and you miss out some little thing and get shafted by the man.