Provide House in Lieu of Maintenance

Madilla

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A father is considering buying a house so that his baby and the child's mother(not married) can live there with only nominal rent being paid but the balance to be in lieu of maintenance.
I wonder what pitfalls there might be to this arrangement?
 
I can't say much that is authoritative. But I know enough to be worth listening to.

But I see no reason in principle why there is anything wrong with this arrangement. Your father is offering a discount on rent in lieu of maintenance.

If I were the mother, unless I was particularly happy with the place, I would certainly prefer, say, 600 Euro cash every month to 600 euro discount on rent; because with the former, I get to choose where I live. With the latter, I am pinned to one place. In such a case I would need a discount of more than 600 in the place of maintenance of 600, if you know what I mean. So you need to find an arrangement that BOTH are happy with.

The only upside I know of is that this arrangement is potentially tax-efficient for your father; if your dad rented it to someone else as opposed to this baby's mother, he would get more in rent but he would pay income tax on it first.

There are other angles to consider. Definitely require some rent, maybe something more than 'nominal' rent, and always have a lease. If the mother stops paying her rent, your father should evict her in due course, just like any other tenant.

Your father should keep evidence that she was paying her rent regularly. Maybe he should require it paid by SEPA transfer in his account, so he has proof of who paid it.

Because, if she were not paying her rent, or stopped paying her rent, and was treating the place as her own, and this lasted 12 years, she could have an adverse possession claim on the property; it would be hers. Your father obviously does not want to have his house effectively stolen legally by his baby's mother.
 
What is the relationship between the mother and father like at the moment? If it is, or gets poor, how will she like having to deal with him as a landlord as well as the father of her child? Is she likely to want to move for family or work reasons? What happens to maintainance than?

The more I think about it, the problem is that he is completely in her business. What if he doesn't like how she's keeping the house? What if he doesn't want to deal with replacing things like washing machines, or says that she broke something and won't pay for it? What if the value of the house goes up and he can get much more rent on the open marked? It just seems that there are too many things that could go wrong.

What if he bought a place, rented it out to a third party, and used the rental income to pay mantainence?
 
Hi, First of all we don't know the relationship between the parents .

It could be that the father is being responsible and wants to provide a home for his child and the mother but not without some financial input from the mother.

It appears that he agrees he needs to pay maintenance so in lieu he is providing a home.

Perhaps the paying of cash maintenance would impact on the mother's Single Parent allowance.?

If as suggested above ,600e were paid to the mother and she provide accommodation herself ,her choice of a home would be very limited indeed so maybe this is the thinking behind the proposed arrangement

It may be that the father or indeed the mother do not want to be on a social housing list or live in social housing.

A problem may arise in the future if the mother enters a relationship with another man who might want to move in, or the mother move out, in which case she would be beholden to father who may declare he has provided a home for his child and it could turn nasty.

But if the parties are amicable, the mother may be happy with the provision and the father is acting responsibly. He o.obviously wants an input into his child's life .....so many who walk away.
 
I suppose there are a number of reasons why the father would like to do it this way. First he is not working at the minute but has the cash to buy the house. There would be a rental agreement drawn up & the point made about having proof of rent paid is very valid. The mother is working part time but is on a low income. He is anxious that the child will have a home and the mother will be able to afford it into the future. This would give at least some measure of security and comfort to that end. He has of course to give consideration to what will happen if rent is not paid or if a partner moves in with her. While relations are OK now they may deteriorate into the future. It seemed as if this would be a good solution which might also be tax efficient for him. He would still have an asset which he envisages would be passed to his child in the future & in the meantime his child would have the certainty of an affordable home.
 
A message to the mother in this situation - reject the house and get the money!!!

So, the father is pulling a fast one on a number of levels that i'm surprised no one has commented on.

He is so good he's going to pay his maintenance (for the CHILD not the mother remember) as rent - that he ultimately pays back to himself as he owns the house.

So, he looks like a good guy but at the end of the day he is paying the money back to himself - and there is NO guarantee that the house will be left to the child. Nothing stopping him selling if he perceives a rise in house prices at any time in the future or needs the money.

Also, he has the cash to buy the house but not a job to pay maintenance!

THIS makes absolutely NO SENSE. He would either be buying the house outright with cash - and so could pay maintenence easily for a few years before he got a job - or - if he uses a cash deposit he has to buy a house with a mortgage, how is he going to make up the €600 a month shortfall on the mortgage payments that he is allowing the mother of his child? - since he has no job... (and he has to have the full price of the house doesn't he? Someone out of work is not going to be given a mortgage).

Let the mother and child live their life, pay your maintenance and if you want a a house to leave the child - buy the house, put tenants in and take €600 from their rent and give it to your child.

I'm not even going to go into the amount of control this man would have over the woman's life and depending on his personality the ability to crucifiy her (and consequently the child) for life.
 
Ladybird, I think your two last paragraphs are a bit harsh.

Taking another view, this man may be trying to do right by his child by providing a home and also benefit the child's mother who finds herself in this position with, it sounds like, little hope of providing a home of her own.

The relationship seems ok between the parents so perhaps the mother sees this as a practical solution for both. Unmarried parents have to be pragmatic and in most cases are not enemies. Unmarried fathers' legal rights are so dismal that on the rare occasion when one proposes to provide a home for his child it is viewed with scepticism.

Would it really be more favourable if this man bought, rented to a different party and handed 600e to the mother from which, along with her low pay she would have to first find suitable accommodation and then pay a probable unaffordable rent while providing for herself and her child.?

There is probably more to this story and it is odd that there is enough cash to buy a house but no job.
 
That's no problem, 110quests, i stick by my view but i thank you for the politeness when you disagreed :)

I'm in my 40s, have loads of divorced friends, single parents with ex, etc and, unfortunately, not one of them is amicable. And quite a few of the children have been damaged by the smallest and stupidest of disputes and recriminations between the adults - i call them adults but i wonder sometimes...

So, i admit my bias but it can and does happen so i thought i'd give my two cents.

I wonder will the OP come back and answer my questions about the money...
 
Ladybird, it's always interesting to hear different points of view.

Without knowing the whole story we are shooting in the wind.

The mother and father could try get professional advice from "One Family" or some such organisation, where the situation would be fully heard and advised upon.

Maybe the OP will return here with further information.
 
The father is not working now but has worked all his life and been a regular saver so that is why he has money which surely is not that unusual. He would be putting most of his savings into buying the house outright. He had plans to build his own house in the future but this would not be a viable option if he were to go down this route. He has no house of his own. He is in his forties and has no other family. It is difficult for both of them.He is not working & her income has dropped considerably since she has had the baby & their expenses have of course increased substantially. She often struggles to pay bills and while I know it is not up to him to manage her money he felt that this option would provide security for the family into the future. He has not actually discussed the option with her yet. He is more than happy to pay maintenance for his child but for him this is all about his child and trying to do the right thing for her and the future. Personally I think there are so many potential pitfalls that it is not a good route to go down but I put it out there as he had asked me my opinion. It has been very useful to read all your comments. Thanks all for your valuable input.
 
Hi, your last post clarifies the situation somewhat. It does seem that the father is trying to do right by his child and her mother.

But he does need to put the proposal to her and be prepared for her reaction.

She may be entirely delighted to get a home of her own.....on the other hand she might feel she would end up beholden to him and would certainly need to speak with someone professionally before deciding.

But the child in the middle of all this is the important consideration. If this father is going to be a part of his child's life (i think fathers should be) there needs to be a civil accommodation between parents. If she rejects this I'd hope she would not reject his role as father and the child's right to the love of its father.

Would he over exert his 'rights' because he owns the house? Would he 'demand' to live there later also as he has no house of his own? Maybe. Or maybe he is unselfish and entirely noble. As he has asked you for your opinion you can probably answer those questions. This and similar situations are very difficult for both parties and for those around them.
 
Ladybird said >> that he ultimately pays back to himself as he owns the house.

Ladybird, I find your attitude to the father's business idea to be somewhat irrational. Whatever is the discount that he is offering over market rent, that is what he is paying to the baby's mother. He is not paying that amount 'to himself'. This should be clear and obvious.

The fact that he is left with a house in the end is fine -- the same thing would be true in any sustainable business investment. It would be true for example if he bought a house, rented it out, and paid her cash.

Are you falling into zero-sum thinking, confusing what is good for the man as being therefore bad for the others? There is nothing wrong with the man looking for a business arrangement that satisfies his interests.

>> there is NO guarantee that the house will be left to the child.

Yes. And what on earth is wrong with that? What ever house would be guaranteed to be left to the child if follows the arrangement you are proposing?

>> Nothing stopping him selling if he perceives a rise in house prices at any time in the future or needs the money.

Yes, but he'd then have to pay the baby's mother cold, hard cash in maintenance then, which is the situation that you are proposing now as the superior one. If she rents anywhere from anyone, she is exposed to that possibility of having to move out because the landlord wants to sell. Why is it worse if the landlord is her baby's father? Do you somehow think it is more likely if the landlord is her baby's father? I think it is less likely all told, because it upsets the landlord's maintenance arrangement, which is another consideration for him.

>> I'm not even going to go into the amount of control this man would have over the woman's life and depending on his personality the ability to crucifiy her (and consequently the child) for life.

Can you explain what these are? I have no idea what you're talking about here. Do you mean by being a bad landlord?

Having said that I find some of your objections somewhat irrational, they are not entirely so. There are valid reasons why either party might dislike the situation.

However, I don't see much problem provided all of these conditions are satisfied:

(i) the baby's mother has evaluated the situation from all angles with good understanding, having been well-informed, and finds it favorable
(ii) if the arrangement proves to be unsatisfactory for her, she can change it; she is not effectively locked in for life. (In practice, I don't think a court would uphold an arrangement that locked her in permanently.)
(iii) the man follows the few points of advice I gave above to ensure that an adverse possession claim cannot be successful against him on the property
(iv) the man is a good landlord, following diligently the required duties of landlordship
 
Ladybird said >> that he ultimately pays back to himself as he owns the house.

Ladybird, I find your attitude to the father's business idea to be somewhat irrational. Whatever is the discount that he is offering over market rent, that is what he is paying to the baby's mother. He is not paying that amount 'to himself'. This should be clear and obvious.

The fact that he is left with a house in the end is fine -- the same thing would be true in any sustainable business investment. It would be true for example if he bought a house, rented it out, and paid her cash.

Are you falling into zero-sum thinking, confusing what is good for the man as being therefore bad for the others? There is nothing wrong with the man looking for a business arrangement that satisfies his interests.

>> there is NO guarantee that the house will be left to the child.

Yes. And what on earth is wrong with that? What ever house would be guaranteed to be left to the child if follows the arrangement you are proposing?

>> Nothing stopping him selling if he perceives a rise in house prices at any time in the future or needs the money.

Yes, but he'd then have to pay the baby's mother cold, hard cash in maintenance then, which is the situation that you are proposing now as the superior one. If she rents anywhere from anyone, she is exposed to that possibility of having to move out because the landlord wants to sell. Why is it worse if the landlord is her baby's father? Do you somehow think it is more likely if the landlord is her baby's father? I think it is less likely all told, because it upsets the landlord's maintenance arrangement, which is another consideration for him.

>> I'm not even going to go into the amount of control this man would have over the woman's life and depending on his personality the ability to crucifiy her (and consequently the child) for life.

Can you explain what these are? I have no idea what you're talking about here. Do you mean by being a bad landlord?

Having said that I find some of your objections somewhat irrational, they are not entirely so. There are valid reasons why either party might dislike the situation.

However, I don't see much problem provided all of these conditions are satisfied:

(i) the baby's mother has evaluated the situation from all angles with good understanding, having been well-informed, and finds it favorable
(ii) if the arrangement proves to be unsatisfactory for her, she can change it; she is not effectively locked in for life. (In practice, I don't think a court would uphold an arrangement that locked her in permanently.)
(iii) the man follows the few points of advice I gave above to ensure that an adverse possession claim cannot be successful against him on the property
(iv) the man is a good landlord, following diligently the required duties of landlordship

The OP stated that the house was to be left to the child in the future.

I have no problem with him getting a house in the end but if he holds it over the mother's head as either a carrot or a stick, it is not acceptable. Have you never heard the expression about mixing business and pleasure? So, what is good for the man is not necessarily good for the woman. Or the child.

He has to be a great landlord and excellent father and a saint and so does the mother. And if she plays up, and he has to evict her like any tenant... that will cause problems - again on so many levels - can you not work out all the scenarios in your head???

Also, what if he a controlling person and makes her life a misery or visa versa?
What if the father marries and wants to move his wife and new family in?
What if she wants to set up home with someone and he interferes saying, for example, the new partner can't live in the house and i'm not paying the maintenance if you move out? Then it gets messy and ends up in court. Which costs money which neither party claims to have. Not to mention the psychological effect on the child.

I could give you millions of these scenarios... even the OP accepted the ideas given.

Human beings are involved, not investments and spreadsheets.

And his relationship with his son should be just that - with his son - it's valuable and it's very fragile and I personally in his situation would tread lightly to do the least damage and have a great relationship with the most important person in his life.

That's me done.
 
You bring up a number of valid disadvantages to the scenario. I certainly agree that if the father is a bad landlord, or the mother is a bad tenant, it's not going to work. I do see it as a long shot, sort of like the OP does -- can potentially work in special circumstances, under a lot of special conditions.
 
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