Grandson to inherit house - implications of living in it in the meantime

Literally no idea how I've managed to ever become a landlord, hold down a job, live in a different city in my twenties and end up in later life managing property from abroad in two different cities without ever having an agent. One of my young adult children is planning to move to Ireland to renovate a property for me. Has zero experience. I told them all I want is not to be bothered about it. Because I want them to make the decisions and learn by making their own mistakes. They won't have to paint like I did, or haul rock like I did, but they will be expected to use a mallot and load a skip. And if they do it well and get a taste for it, it might be the beginning of a career as they are showing scant interest in the one they got educated in.

Maybe my faith in the young of today is misplaced. I once had to lie to Ulster bank to get a mortgage, they got wind that the property I was buying might be a bit off from their valuation guy. Bank rang me up to ask if I'd done an engineers report, I had but there was no way I was giving them sight of that - it was the worst one I'd ever read. So I ran them a tale about how my brother in the business and my sister's boyfriend has assessed the property and it was grand. We were all fairly young then, in our twenties. But we had nerve and gumption. That particular property I sold for a massive profit, six figures, to a well known builder and he went bust.
 
Bronte said:
Literally no idea how I've managed to ever become a landlord, hold down a job, live in a different city in my twenties and end up in later life managing property from abroad in two different cities without ever having an agent.
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That was eminently possible decades ago. Now much less so.
 
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My mistake, sorry - I thought Grandson wanted to move into property. Hence caretaker suggestion.

I wouldn't do a caretaker agreement outside that.
 
Azurerat said:
He is in college and would love to rent it, as he is in college in another city and needs to pay for his accommodation.
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Can you clarify what exactly you mean.

1) He moves into the house now and rents it from his Granny (which is what some people are answering)

or

2) He stays where he is but lets the house to a tenant and collects rent from the tenant. (Which is what others are answering)

Brendan
 
Bronte said:
He just rents it out himself and tells Granny he is taking care of everything. As long as she is happy with this of course.
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Thk u, but he needs some legal basis to rent? Access utilities etc etc?
DannyBoyD said:
My mistake, sorry - I thought Grandson wanted to move into property. Hence caretaker suggestion.

I wouldn't do a caretaker agreement outside that.
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No bother, thks for ideas anyway......, he is a mature student 24 and studying in Cork and the property is in Dublin.
The reality is, I may be doing the donkey work on his behalf, though he does have a keen interest in business. I just need a legal mechanism to enable him it manage/rent it, with as little trouble to Granny
Brendan Burgess said:
Can you clarify what exactly you mean.

1) He moves into the house now and rents it from his Granny (which is what some people are answering)

or

2) He stays where he is but lets the house to a tenant and collects rent from the tenant. (Which is what others are answering)

Brendan
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Azurerat said:
Hi, my son has just been told he is being left a house in a will by his granny, who is now in a nursing home. She is giving him the keys and says he can have the house now as she will no longer be living in it. He is in college and would love to rent it, as he is in college in another city and needs to pay for his accommodation.


any tips/advice please
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Just to clarify........see above for the original post.....
So basically...his Granny has written a will and is leaving him her house in the will,
Legally now the house is still his grannys
Legally now he has no rights re the house, re utilities etc
She is in a nursing home/Fair Deal and is not returning to the house
She however is giving him the keys now, and says the house is his to do whatever he wants with it.
The house is in Dublin
He is studying in Cork

As he cannot live in the house, (he is in Cork) the best solution would appear to be, to rent it out.
but he has no legal basis to do this, although he has the keys.....


A solicitor has just told me the simplest would be for him to lease from his granny and then sublease
Chatgpt has told me u can set up a "peppercorn lease" ie one in which he pays his granny nothing (means she wont have to pay tax/gift tax etc)
but he will have to register with RTB etc and declare taxes on income)

I am looking for a legal mechanism to enable him to rent/manage the house (probably via a rental agency), with minium disturbance to his granny

Thk u in advance for all idea/thoughts
 
Have Gran appoint an agency & pay rent to her account. Get accountant to do tax returns for Gran.

Gran can gift 3k per year to grandson.

Anything else seems too complicated; and without wishing to upset, its a set up that isn't going to last more than a couple of years.
 
Will the house not have to be sold to pay fair deal loans? Or can that be covered by other cash from the eventual estate? Otherwise the will is offering an asset that will no longer be 100% owned by the Granny?

And in any case, given the category for inheritance, won't whatever the inheritance is involve a large chunk of inheritance tax for the grandson? Would it be worth seeing if the residue of the house proceeds can be given to a child of the Granny and then eventually it can move to the child of the child of the Granny as a gift?

And won't the rental income belong to the Granny, not the grandson? Of course she can gift it to him but beware of exceeding the 3k threshold or eating into the inheritance threshold which is low enough.
 
Bronte said:
Don't see anything stopping him renting it out. This is what needs to be considered:

- the rent would surely belong to granny
- income tax would have to be paid by her
- he could rent it out and pay house insurance and repairs out of it
- the income from rent is -happily- no longer assessed for Fair Deal.

The Good News:

- Granny can gift her grandson 3K annually without any tax implications for either party.

The reason the Fair Deal was changed was to encourage houses left vacant while people spent years in nursing homes. This case is perfect for that. And your son will learn to manage property.

In addition, Granny ought to pay him for managing the property. It is an actual task. So I would suggest 10% of rent. He'll have to declare that as income, but presumably he'll be earning little to no other money and so no issues on that score either.

Be careful about pre letting expenses. Come back to us on that if you decide on this route.

The benefits

- property is minded
- income received
- grandson learns how to manage as a landlord
- he gets paid for so doing
- house insurance is paid out of rental income
- house is maintained to a good standard out of rent
- somebody gets housed
- he should also complete the income tax returns for granny.
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Thks for advice, what legal doc would be best for him to do this, lease? Mangement contracts?
 
Azurerat said:
Thks for advice, what legal doc would be best for him to do this, lease? Mangement contracts?
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I've never used a lease. Because all the rules that landlords have to abide by already exist. Clean the house, put an ad in, get deposit and one month upfront, agree on what the tenant will pay (cut grass, esb, gas, bins). Take meter readings. Register with RTB. Annually. Inform the house insurance people the house is rented. Collect rent. Inspect property regularly. Organise repairs as necessary. Do the tax returns.

Is the property in good condition.
 
I would do a lease as the tenants might not know the rules they have to abide by.
 
Premos said:
I would do a lease as the tenants might not know the rules they have to abide by.
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LOL. Like put out the bins, cut the grass, keep the place clean, don't destroy the top of the cooker, don't put a hot iron down on the mdf kitchen worksurface, don't let food rot in the fridge, open the bathroom windows after a shower, don't take the batteries out of the smoke alarm, air the house regularly, don't wait 3 weeks to report a leak, clean the dryer lint, don't put runners in the washing machine, clean out the dishwasher exit section, don't keep a puppy, don't accumulate household waste in the shed for weeks, keep the communal areas clean, wash windows regularly (annually will do), don't get locked out at midnight of a Friday night coz you can't see the keyhole ............ . Them kind of rules. I've a new one today. Don't forget to open bedroom windows regularly or damp will build up and the windows will rust shut.

Those kind of rules? My current lease runs to many pages. I didn't read it other than the main details (rent, date, charges, names, deposit) because here I will be liable if I don't treat a place properly. In Ireland, forget it.

I always paid for the bins as it was one sure fire way of getting them to put them out and not try and dump rubbish elsewhere.
 
Bronte said:
I've never used a lease. Because all the rules that landlords have to abide by already exist. Clean the house, put an ad in, get deposit and one month upfront, agree on what the tenant will pay (cut grass, esb, gas, bins). Take meter readings. Register with RTB. Annually. Inform the house insurance people the house is rented. Collect rent. Inspect property regularly. Organise repairs as necessary. Do the tax returns.

Is the property in good condition.
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Thks for advice again, yeah the house is grand nothin fancy but clean etc. Does my son not need some legal formality signed by his granny in order for him to do this (rent). Ps he will prob use an agency as he is studying in Cork and house is in Dublin
 
No idea what an agency would want as I've never used one as I didn't really trust them. But I'm changing for future purchase. I was quoted 8% plus VAT last week. They also send out a plumber/electrician etc. And anything under a cost of +/-€200 they don't bother me for they said. (which suits me but I'm experienced and relaxed, and I'd keep on top of it myself anyway)

I assume your son could do with picking up the phone, or walking into an auctioneer in Cork and putting in the leg work and asking instead of you doing all the running around. You're making a rod for your own back if you don't let him sort it out. There is generally a cost to getting tenants too. The agencies are supposed to 'vet' the clients. That gives you no guarantees as to quality of tenant I believe, in an Irish context. Horror stories are real, but rare if you take care. Everyone who begins makes mistakes. But if you have a good place and are careful and kind of your tenants it should work out ok. Good tenants are the way to a happy life. So keep them happy too.

It is a landlords market currently as there is hardly any property to rent. Take time in picking the tenant. Good steady job, for example, ask why they are leaving current place, references are generally worth nothing as you could have a landlord wanting to get rid of a tenant and willing to write anything to do so. Personally I've no issue with HAP tenants. Never done anything wrong really. But they do tend to come from poorer sections of society, in general, and take the less salubrious properties. The benefit is the state pays the rent, and tenant will stay put once it's set up. It's the law that you cannot deny having a HAP tenancy, but I'm sure that's easy to figure out if a landlord wants to.

Fancy doesn't matter, but everything working does.
 
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