Renting out house-need to draw up contract with ex

[daisydotty]

Well I had posted on here last summer about the situation I found myself in-Marriage ended, I left the house, He stayed and agreed to pay mortgage. He lost his job and defaulted on mortgage but wouldn't vacate it so we could rent it.

I left it go into arrears (even though it killed me to do so and they are at €4500 at the moment). Entered into MARP with the bank (BOI) myself. Ex ignored requests to put in the SFS. I always stayed in touch with bank etc and ex apparently met with them once. Anyway last week they wrote to us offering 6 months interest only which ex claims he can't pay. I am willing to pay this. But anyway he's finally agreed to move out and have it rented (I had proceedings in progress to force a sale but we are in negative equity + arrears approx. €40000).

I am meeting him tomorrow to sort out the finer details but I want to draw up a legal agreement between us about renting out the house. my solicitor will draw it up. Bu just wondering what kind of things to include in this contract: heres what im thinking myself
-Company to be used for letting & management
-Where rent is to be paid into
- the rent will be about 200 more than the mortgage so what to do with the excess (I know theres property mgt fees, tax liability, PRTB registration, Repairs etc for landlords so I think it should be kept for that)
-at what point to we relook at selling in terms of time
If theres a loss on the years income etc what way is it divided?

Would appreciate any other ideas
thanks
daisy!

 

[Bronte]

Would appreciate any other ideas
!

Hello Daisy, you had some specific quesitions on renting.

I don't recommend an agent, they are costly and useless.

You should set up a current account for the rent to go into, from that all bills including mortgage should be paid. It can be a joint account, but I assume only one of you will manage it. Rent can be paid in directly by DD or else lodged monthly. Deposit can also be lodged here, but don't dip into the deposit.

For other ideas, not sure yet as you haven't told us any real details. Mortgage, arrears, amount of full repayment, term, amount of interest only, what is bank going to do about arrears, your income, who can subsidise the property, the negative equity (NE). I want to work out whether renting it or handing it back is a better idea.

Would also like you to list the rent amount, the expenses you anticipate so we can calculate a vague idea of tax. 200 Euro rent over mortgage amount might seem a lot, but if you're paying low interest, and are a higher rate taxpayer it might be not worthwhile.

And will your ex really go along with this.

Answer on when to sell, I'd say, based on your history, the minute you're out of NE.

 

[Lucuma]

daisydotty is he only willing to move out if you set up this joint agreement about renting? That's unfortunate. Given his track record it would be far better if you and you alone handled the rent of the property. Given his behaviour up to now don't you think it's possible or even likely that if he has access to the current account with deposit and rent in it, that he may start taking money out of it for himself? I know there's no way I'd trust my ex with any of that. I'm in same position as you, I manage and handle the tenant and rent 100% and my ex has nothing to do with it. Rent from tenant comes into my account, goes out to pay mortgage, I pay property tax, PRTB, mortgage protection, house insurance and maintain the house for the tenants. It's not a very good idea to let a hostile unemployed ex with no source of income to have access to such matters imho.
Also why are you getting a management agency? For one house? That seems mad considering ye are on interest only but yet can afford a management agency!? Don't forget that after 6 months the premium will go up to full and then you won't have an excess anymore.

 

[Lucuma]

daisydotty just 2 other things i forgot to mention-
TRS - once your ex moves out of the house you need to cancel the TRS on the mortgage (you should have already cancelled your half when you moved out)
Locks- i strongly advise that you get the locks changed the day after your ex moves out of the house (front & back door) then you can manage and handle the tenant and the renting out of the house. There is a bit to being a landlord and a few things that need to be in order when renting out a house (already mentioned) and these need a reliable person to organise them. Might i respectfully suggest that a hostile, unemployed, non co-operating ex that is broke and possibly bitter, might not be the best person to be involved in organising or handling those things.