Shared house ownership, room rent dispute – What’s the logical solution?

[philmaximus]

I hope you can help me understand the below dispute.

Here's the scenario:

A 4 bedroom house has joint-ownership between two friends who needed to buy together to get onto the property ladder.

Of the 4 rooms, each owner/landlord obliviously lives in what you could call their agreed/chosen room. The two spare rooms are rented out to tenants and the rent is split 50/50.

Both landloards/owners keep up monthly payments to cover all bills, this is split 50/50.

The twist:

One landloard/owner wants to move out ( retain ½ ownership in the property by continuing the mortgagee/bill payments+split all repair maintenence) but needs to rent the room that they've lived in from the beginning out to a tenant, in order to financially cover the cost of renting/living elsewhere. For example – they want to rent the room they've lived in for £300/month.

Assuming that the remaining landlord/owner who remains in his/her own chosen room (who continues to benefit from this room entirely) accepts this change in 'occupancy' (absolute consideration and agreement by both parties is essentual here) the big question is:

Who should receive the rent from this room?

Really interested in people's opinions here!

Many Thanks

[Carryon Regardless]

My view.

If new T's are considered by 'the partnership' and there is no disadvantage to the remaining partner then the ins / outs (financially) of the departing partners room should be his.

As you have agreed to split the pros and cons of the rest of the house 50 / 50 and you both have a benefit from the areas 'allocated' to each individual partner then each of the individuals areas surely must be the benefit / responsibility of that individual.

The individual should enjoy any benefit of his area, but any downside (repairs, repossession cost for example) should be born by the individual.

Where that areas T causes issue it should be managed or paid for by the departing partner.

[Grampa]

I think also think the departing owner should be entitled to the rent from "his" room but if any extra costs incur due to the 3rd tenant that should be down to the departing owner.

[Richlist]

I agree with the two answers you have already received BUT there is a further twist.

Tax is payable on rental income and HMRC will assume all income/ expenditure is split 50:50 by the joint owners unless you take action to alter that.

It will cost a few hundred pounds to arrange the necessary documents. See a solicitor.