Am I a landlord?

[albo2002]

I know this will sound like a very naive and stupid question, so sorry.

I own two properties, and the second is occupied by a friend of mine (in Wales). She doesn't pay any rent (but does pay all her bills (bar buildings insurance)) and we don't have any signed agreement in place, and it's been like this for a while now. The property is not worth very much and I'm pleased to help her, as she's had a bit of a tough life.

There's no mortgage on it and I dont have a buy to let insurance policy, as I've never viewed it as a tenancy.

But it's just dawned on me that if there was a fire or something at the place, the insurance company might not pay out as they could view me as a landlord.

Would this be right? Am I a landlord in this scenario? According to the legal websites, landlord definitions all seem to revolve around money exchanging hands.

[Melboy]

I know this will sound like a very naive and stupid question, so sorry.

I own two properties, and the second is occupied by a friend of mine (in Wales). She doesn't pay any rent (but does pay all her bills (bar buildings insurance)) and we don't have any signed agreement in place, and it's been like this for a while now. The property is not worth very much and I'm pleased to help her, as she's had a bit of a tough life.

There's no mortgage on it and I dont have a buy to let insurance policy, as I've never viewed it as a tenancy.

But it's just dawned on me that if there was a fire or something at the place, the insurance company might not pay out as they could view me as a landlord.

Would this be right? Am I a landlord in this scenario? According to the legal websites, landlord definitions all seem to revolve around money exchanging hands.

Absolutely correct. You are a landlord and your insurance company would not pay out in the event of a fire or anything else. Why? "Failure to disclose important information that would affect your policy terms and conditions"

Insurance companies spend a lot of time and legal chatter as to why they should not pay claims......your scenario fits their bill not to pay out!

Mel.

[albo2002]

Absolutely correct. You are a landlord and your insurance company would not pay out in the event of a fire or anything else. Why? "Failure to disclose important information that would affect your policy terms and conditions"

Insurance companies spend a lot of time and legal chatter as to why they should not pay claims......your scenario fits their bill not to pay out!

Mel.

Thanks Mel - this is what I feared. I will call my insurance company today.

Do I therefore need to register myself as a company? And do I need to be on a landlords' register?

[Melboy]

Thanks Mel - this is what I feared. I will call my insurance company today.

Do I therefore need to register myself as a company? And do I need to be on a landlords' register?

No to both of those questions.

Just give all the details to the person you are phoning and let them guide you. Go for the best quote though with the best cover. Buildings only is fairly reasonable in price but you may want to consider a limited contents cover for landlords as well.

Mel.

[Carryon Regardless]

Your doing a nice and honourable thing, good on you.

I would view that to protect yourself in some unlikely event a contract would clarify the situation.

If questioned I could see an assumption that there is some form of payment in kind therefore the situation would be viewed as a tenancy, or worse.

An AST contract detailing no rent due (or maybe a minimal rent for the purposes of it being an actual AST) and no deposit taken should serve purpose.

No registration is required, but you may opt to to do a Self Assessment tax return at the end of the year showing no profit. In fact if you have revenues from elsewhere you could even offset losses.

You've already covered insurance,

but EPC (energy performance certificate),

and an annual gas certificate should be considered,

and maybe electrical safety, not a legal requirement for a LL but very often considered intelligent.

It may be that others with better legal knowledge may have contribution here, for example maybe a licence could be granted and could save you some admin ??

[albo2002]

thanks so much for your help and advice Mel and Cor - I would have appreciated just not being called stupid, but this is perfect! Thanks

[LLAW96]

This sounds like a tenancy at will to me, there is no term, no rent and no intention to create legal relations. These are all required elements in order for a tenancy to exist. Speak to your insurer and point this out, there is a licence to occupy at best and in my view you cross the threshold for a tenancy by entering into a contractual relationship with the occupier. But good on you in any event.