Property Owner But Rent Goes Elsewhere

[Cotton]

I am the legal owner of a BTL and pay the mortgage

However, my family member is the 'landlord' as she manages the place (e.g. arranges repairs, certificates, liaising with tenant etc).

What I want to know is if it is okay for her to collect the rent to keep for herself? or is this illegal

[ash72]

If she is working as agent, and taking the commission then it would not be illegal, if however she is taking all the money and not transferring anything back to yourself, then you would still need to declare this for tax purposes, you may also breach your insurance, and BTL mortgage terms.

[theartfullodger]

A landlord does not have to own the property. Do you have a written agreement signed by both covering the relationship between the two of you?

Is she registered with a lettings agent redress scheme?

What training bit experience has she to do this for you?

She is declaring all ( ALL ) rent income to HMRC and paying tax on it? Who has insured the property? Do terms of mortgage & insurance permit this sort of arrangement? (V unlikely for mortgage, could be repossessed if the case).

When did this scheme start, please? Does she live in UK - if so which country? Have you seen a copy of the tenancy signed by occupants? (In particular have proof who is named as landlord and at what address)

[Cotton]

theartfullodger,

It is probably not wise to disclose too much info online.

I will check my mortgage/insurance first... and yes all funds will be disclosed.

Thank you

[jpkeates]

I am the legal owner of a BTL and pay the mortgage
However, my family member is the 'landlord' as she manages the place (e.g. arranges repairs, certificates, liaising with tenant etc).
What I want to know is if it is okay for her to collect the rent to keep for herself? or is this illegal

It's not illegal, but it is complicated for tax purposes.
There's a reasonable chance you'll end up being taxed on the income without actually receiving it.

And, as noted above, if you have a mortgage on the property, the terms may not allow such an arrangement.

[theartfullodger]

theartfullodger,

It is probably not wise to disclose too much info online.

I will check my mortgage/insurance first... and yes all funds will be disclosed.

Thank you

I do hope that;s not because she;s not registered with any redress scheme and/or has little or no training or experience in this game.

Property letting is a legal minefield, never mind iffy tenants (or agents). Excuse the comment, but to save you the pain I went through, whatever you Cotton do, (if you haven't already - assuming you have done as you've been a landlord for a bit) - strongly recommend you do some basic training and reading up.

When I started I made dumb, complicated, long-drawn-out, painful mistakes: Expensive, messy. I would have saved time & money if I'd just done some basic training, but I'm assuming you are ahead on that...

For this sort of arrangement there usually needs to be a tenancy agreement between owner & "agent", granting tenancy to "agent", permitting them to rent to humans. In my 'umble, limited, experience insurers and mortgages do not usually permit these.

If you want to see an example speak to one of the big agents who offer "guaranteed rent schemes/scams" which use this approach (but theirs will favour agent)

Good luck!

[ash72]

Why don't you simply add her as an employee and pay her from the rental amount, to avoid the issues previously mentioned or alternatively she invoices you on periodic basis.