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Claiming housing benefit where house owned by relative


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I am new to this site and hope someone can help me. I am in the process of buying a house. My daughter is expecting a baby and she wants to move out of our house and rent a property of her own with her boyfriend. She is claiming income support and he is about to be made redundant. I have spoken to our local council who advise me that she will not be able to claim HB if they believe we are buying the house for her to rent and therefore to claim housing benefit. Quite ridiculous in my humble opinion but I do not want to proceed with the purchase if there is no way round it and we find ourselves saddled with a mortgage and my daughter gets no help. Is there any way around this? If we already owned the house then they said they would exercise their discretion and maybe allow a claim. I cannot see how it maes sense to allow her to claim HB for a grotty flat from a third party when we will be charging a commercial rent to her as a thrid party would??? Any advice/ tips etc would be hugely welcome..... baby due in 6 weeks! Thanks

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So far as I know, the restriction only applies if the claimant is renting from a close relative who also lives in the property. You could try asking Citizen's Advice.

RMW

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Hiya Claire,

 

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I have moved your thread over to the renting forum. You will get the advice you need in here.

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So far as I know, the restriction only applies if the claimant is renting from a close relative who also lives in the property. You could try asking Citizen's Advice.

 

That is certainly not the case.

 

If you are renting from a close relative, then the local authority may well reject any claim for HB. The argument for this (entirely valid) is that the landlord may not have claimed rent, or may be charging under market rent, in this kind of scenario.

 

The rules vary from authority to authority, and so you are basically tied with what your authority says.

7 years in retail customer service

 

Expertise in letting and rental law for 6 years

 

By trade - I'm an IT engineer working in the housing sector.

 

Please note that any posts made by myself are for information only and should not and must not be taken as correct or factual. If in doubt, consult with a solicitor or other person of equal legal standing.

 

Please click the star if I have helped!!

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There are some people who will be treated as though they are not responsible for paying rent even though they are paying it, for example, if you are renting from a close relative who also lives in the home.
From Advice Guide (CAB)

 

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.

From Shelter

RMW

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

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As mentioned it depends on local authority.

7 years in retail customer service

 

Expertise in letting and rental law for 6 years

 

By trade - I'm an IT engineer working in the housing sector.

 

Please note that any posts made by myself are for information only and should not and must not be taken as correct or factual. If in doubt, consult with a solicitor or other person of equal legal standing.

 

Please click the star if I have helped!!

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MrShed is right. If the local Council think that it is a contrived tenancy i.e. a tenancy set up just to get LHA (private HB) then they will not pay. The things they will usually look for are:

 

does the family member who owns the house have a history of being a private landlord

is the claimant already living in the house and have they been paying rent

does the rent charged match the market rent for the area

has a proper tenancy agreement been drawn up and signed by both parties

does the landlord know what their responsibilities/rights are especially around non-payment of rent

was a deposit paid

 

The best thing to do would be to have a chat with the HB dept of your local Council but this will only be a guideline as a definite answer will only be available after you have bought the property and your daughter has signed a tenancy agreement, etc.

 

If you are not able to let your daughter live in the property rent free while she is on a low income or evict your daughter if the LHA is not paid and she cannot pay the rent or be a private landlord to someone other than your daughter then my advice is do not buy the property.

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Thanks for the replies most helpful! The house will certainly NOT be occupied by anyone other than my daughter and her baby and partner. There will be a formal assured shorthold tenancy agreement in place prior to occupation at a commercial rent. Unfortunately our council seem to think that this is still purchasing a house solely for the purpose of claiming HB!!! I already own a flat in Bristol which is rented out to students so I could argue that I have a history of being a private landlord. As you say, however, it looks very much as if we will have to take the risk of the council refusing to pay or choosing to rent the house commercially first before saying that it is impossible for our daughter to live at home anymore and that she and her partner need to move into the available accomodation that we have ready and waiting. It would be great to talk to the relevant department but, of course, they are constantly engaged!!!! Does anyone think it would work if we rented the house to her boyfriend for 6 months and then decided to rent it to our daughter after that. she could then live at home for a bit?

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Does anyone think it would work if we rented the house to her boyfriend for 6 months and then decided to rent it to our daughter after that. she could then live at home for a bit?

 

Bad idea.

 

Not only will the same HB rules apply when your daughter moves in, it will look as if you are actively attempting to circumvent their policies.

7 years in retail customer service

 

Expertise in letting and rental law for 6 years

 

By trade - I'm an IT engineer working in the housing sector.

 

Please note that any posts made by myself are for information only and should not and must not be taken as correct or factual. If in doubt, consult with a solicitor or other person of equal legal standing.

 

Please click the star if I have helped!!

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Just to clarify, it is not down to the council's policy. The law is the same nationwide.

 

Housing benefit can be claimed where the agreement is legally enforceable, and not contrived to take advantage of the HB scheme (plus a few other fixed excluded situations).

 

Refusal carries a right of appeal to a tribunal.

Post by me are intended as a discussion of the issues involved, as these are of general interest to me and others on the forum. Although it is hoped such discussion will be of use to readers, before exposing yourself to risk of loss you should not rely on any principles discussed without confirming the situation with a qualified person.

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I was in a similar situation last year.

I moved back to the UK in July 2009 and lived at my mothers property without paying rent (she was also living there). In October she moved overseas with work for 3 years and we started paying rent/claiming Housing benefit at that time.

The council initially refused to pay as they found it to be a contrived tennancy, it was only after she used an agent to manage the property that they agreed to pay housing benefit on the property, she lost a % of the rent but better that nothing!

Also if they ask you cannot say that it will only be avaliable for your daughters use, you must say that it will be avaliable to rent to anyone, even if you are only going to rent it to her because she already agreed before it went on the market as it were, hope that makes sense!

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  • 10 months later...

Hi

Welcome to The Consumer Action Group.

 

 

I am just letting you know that as you haven't had any replies to your post yet, it might be better if you post your message again in an appropriate sub-forum. You will get lots of help there.

 

Also take some time to read around the forum and get used to the layout. It is a big forum and takes a lot of getting used to.

 

 

Once you start to find your way, you will soon realise that it is fairly easy to get round and to get the help you need.

 

It can be bit confusing at first.

Please be advised that my time will be limited for the next few weeks.Thanks for your understanding.

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