Morning CAGgers - quick question...

If I bought a flat for my mum to rent would she be able to claim housing benefit to cover the rent? Mum only has a state pension coming in - or will have when it's due in June.

Me and my sister both moved to London years ago and my mum lives up north but wants to be closer to her family and grand-kids.

I've looked at various sites and the general opinion is that she can claim.

Any help appreciated.

TJ

I think not. It is my understanding that there is on the form asking whether your landlord is a relative of yours. You would need to ask your local council but I think this is the sort of thing they clamp down on.

AFAIAA this would be an absolute no-no if you live in the property at the same time, but if it is a vacant property with a proper tenancy agreement in place, then it might be possible subject to an examination of the case and interview. You would have to demonstrate that it is not a tenancy contrived solely to receive HB.

In the current environment - probably much harder to get around.

I'm looking into this issue for some-one else at the moment. This is what I have found so far with regards to housing benefit for family member landlords.

I live in a property owned by a family member - can I claim housing benefit?

If you live in a property owned by a family member and pay them rent, you may be entitled to housing benefit. However, this will not be the case if you (or your partner) are responsible for a child and are renting from the other parent of that child.

The council will also want to check:

• that you're paying rent on a commercial basis. In other words, that it's a proper tenancy, not just an informal arrangement between family.
  
• that the arrangement has not been set up in order to take advantage of the housing benefit system - this is called a 'contrived tenancy'. For example, if your landlord only asks you to pay rent when you are not working (and so are eligible for housing benefit), but not when you are working (and earning too much to claim housing benefit), this would be a contrived tenancy.
  

The main issue with these claims is whether or not the claim is 'contrived'.

The tenancy agreement must be a 'legally enforceable' agreement, which the local authority/rent officer will scrutinise to find anything which they can reject the claim on.

From what I can gather, the family member tenant, must be treated in the same way as an unknown tenant would be with a commercial tenancy, including eviction procedure for non payment of rent, etc.

Unfortunately, even with these regulations being adhered to, some councils/local authorities appear to be making the decision of 'contrivement' based on the fact the tenant is a family member. This fact alone is not a basis for refusal of Housing Benefit being awarded, according to guidance and regulations.

The CPAG website, has a 7 day free trial, of the online welfare benefits and tax credits handbook 2011. I would suggest you have a look at the guidance in there before attempting to procede with this. (I think it's in chapter 10).

I completely agree with sidewinder, and the current environment theory.

Thanks folks - not as clear cut then. It does seem though, mum would qualify for HB given her sole source of income is state pension, and that if she would rent elsewhere (i.e not owned by me) there would be no problem. I do understand the contrived issue, but it's an absolute no-brainer to prefer that any HB would go back into the family pot.

More research needed I reckon.

Hi folks,

I do believe that along with the contract not being contrived, if you can prove that you would invest in the flat and rent it out commercially and just prefer to do so to your mother, there would be little to argue about? You are a landlord, who is renting to a family member under the exact same contract, rather than a stranger!

Good luck.

JQ

Is it just me that would love to know why you are charging your own mother rent? When you were a child, did she charge you rent? I wish my mother was still alive - she would have been welcome to live in a flat of mine free for as long as she lived.

Is it just me that would love to know why you are charging your own mother rent? When you were a child, did she charge you rent? I wish my mother was still alive - she would have been welcome to live in a flat of mine free for as long as she lived.

Hi DD - I'm not sure if your comment deserves a reponse but you're getting one anyway. Over the last 15 years mum has been in an abusive relationship with a guy who was bankrupt. This man took mum to the cleaners and sucked away all her income, money she had made from the sale of my parents house when they divorced, forced her to take out loans on his behalf in her name etc.. you get the picture. Four years ago Mum eventually found the courage to leave this man, and buy him out of their house. At 56 she had to take a short-term mortgage to pay him off and clear debts - requiring her to take a second job. She was mentally and physically destroyed by the experience. During this time I have completely renovated her home, fitted a new kitchen, bathroom, carpets and decorated throughout to make it her home. She was made redundant in January and gets her state pension in June. Since then I have paid her £800/month mortgage as well as the £1200 rent on my own home. Mum desperately wants to move to London to be near me and my sister and my sisters kids. I have the chance to buy a flat for her, in the village where my sister lives, in doing so help my sister out at the same time as mum can support with childcare. Mum has the opportunity to rent privately and qualify for HB - why can't she therefore rent from me as the council has a legal obligation to pay her housing benefit regardless? That is all I'm asking.

I'm sorry you lost your mum - I'm doing everything I can to make my mums life easier and happier - I feel you are questioning my dedication and devotion to my mother - you can do one!

Thanks everyone else for for your comments and constructive advice - I do appreciate it. I think I now need to get some advice for a property lawyer to see what my next move is.

TJ