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renting from a friend


Dollydoo
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Hi, i get help with my mortgage interest (£20 pw). I am currently selling

my house though and after paying off various bills etc, will be putting the remainder into another property with a family friend. They will be paying

majority share but will allow me to live solely in the house and charge me

a nominal rent. Can I get help with the rental costs? This friend is not

officially a landlord, the property is in their name only but all the bills etc

are in my name. The rental costs to me will be the equivalent of what the

local council would say I was entitled to. I receive IS, Incap. DLA

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Things to be aware of:

 

If the benefits agencies know that you own a property they will want to know what has happened to it and if you sell it where the money has gone. If you then say it's gone towards the house you are renting then I'm sure that's going to cause problems.

 

If the property is solely in your family friend's name and there is a falling out between you/your family and them what rights are you going to have to remain in the property? I know things are fine at the moment but you have to think about what would happen if there was a falling out or their situation changed and it no longer suited them that you were living in the property paying a nominal rent.

 

If your friend is renting out to you and you want to claim HB/LHA then they will have to officially be the landlord. You will need a proper tenancy agreement in place, etc.

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  • 4 weeks later...

I will look into having rights if we ever fall out. I'm sure benefits agency will want to know where the money has gone and will have a letter confirm who & what was owed. However, with regards to proper

tenancy agreement, how do you get this if you're not legally a landlord?

and is there then going to be tax implications?

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Your friend needs to take a look at the landlord associations/groups and forums on the web. They will have information on Tenancy Agreements and some let you download templates for free if you are a member.

 

However, these are for a straight landlord/tenant arrangement and you are saying that you would also be a part owner of the house. I don't know if you can sign one of these tenancy agreements and be a part owner.

 

If I were you I would seek some legal advice on this matter and also check with the Housing Benefit dept of your local Council to check whether they would pay HB in this situation as they may feel that it is a contrived tenancy.

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You also need to be aware that DWP have very strict rules on what you are allowed to do with any capital you have, and that may not include paying debts. I would strongly urge you to get proper advice on all aspects of this situation.

RMW

"If you want my parking space, please take my disability" Common car park sign in France.

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