housing benefit if related and used to own

RDB

they couldnt afford the mortgage so I helped them out instead of them losing the house.

they are currently getting LHA but the place they live is no good for health reasons.

dmg24

RDB wrote: »

they couldnt afford the mortgage so I helped them out instead of them losing the house.

they are currently getting LHA but the place they live is no good for health reasons.

You are not answering the questions that people have asked. People cannot help if you just keep repeating the same thing.

krisskross

RDB wrote: »

they couldnt afford the mortgage so I helped them out instead of them losing the house.

they are currently getting LHA but the place they live is no good for health reasons.

But they did lose the house...to you. As they are claiming LHA are we to assume they did not tell the entire truth about their financial circumstances?

real1314

Ditzy wrote: »

This will be deemed as a contrived tenancy - you cannot get LHA for relatives that own property you intend to rent.

ie your father will not get LHA for a property that YOU own!
Local Authorities are not in the interest to be paying for your mortgage to house your father.

Not true I'm afraid. Whilst renting from a close relative would require a little more scrutiny than other cases, there is no reason for it to be refused for HB on this ground alone.
The whole issue of contrived tenancies has been clarified in a number of commissioner's decisions and on the basis of these HB cannot be (semi)automatically refused just because it's between relatives.

The actual criteria are no different to any other tenancy - that it must be a valid commercial tenancy. It is perfectly acceptable to set up a property to rent to a relative and it's perfectly fine for the property to mortgaged.

If the tenant would have been eligible for HB in a non-related LL's property, and the related LL could have rented to a non-relative; then there's no reason the LL should not rent to the relative.

Ditzy_2

real1314 wrote: »

Not true I'm afraid. Whilst renting from a close relative would require a little more scrutiny than other cases, there is no reason for it to be refused for HB on this ground alone.
The whole issue of contrived tenancies has been clarified in a number of commissioner's decisions and on the basis of these HB cannot be (semi)automatically refused just because it's between relatives.

The actual criteria are no different to any other tenancy - that it must be a valid commercial tenancy. It is perfectly acceptable to set up a property to rent to a relative and it's perfectly fine for the property to mortgaged.

If the tenant would have been eligible for HB in a non-related LL's property, and the related LL could have rented to a non-relative; then there's no reason the LL should not rent to the relative.

Was intrigued by this response so therefore looked into the commercial tenancy and found this report which may give some insight into what a contrived tenancy may or may not be

http://www.osscsc.gov.uk/aspx/view.aspx?id=1975

http://www.osscsc.gov.uk/aspx/view.aspx?id=1942


But please rephrase your reply to not ENTIRELY true as this could be mislead people into thinking they can just rent to family members and receive HB/LHA for the property.

But the report gave interesting reading and further educated me on HB/LHA legislation!!!

But on the understanding of the original query

''RDB I have bought a house off my father that he was renting to tenants for over 10yrs, they have given notice to move out now.

My parents do qualify for Housing allowance and would like to now rent it off me and claim housing allowance.

I know there are 2 problems that we are related and that they used to own it until a few months ago.

I dont mind paying for professional help if there is any way that they would be able to get LHA to live there.''

The LA may assume that as the son purchased the house and rented to father that it may be deemed as contrived on the basis:-

“Under Housing Benefit Regulation 7(a)(i) a person who is a ‘Close Relative’ of his/her landlord and is treated as not liable to make payments of rent, and subsequently cannot be paid Housing Benefit. This tenancy can be conduced as being ‘contrived’ so as to take advantage of the Housing Benefit system.”

http://www.dwp.gov.uk/advisers/rr2/housingbenefit/

http://www.adviceguide.org.uk/index/life/benefits/help_with_your_rent_-_housing_benefit.htm#restrictions_on_how_much_rent_housing_benefit_will_cover

Further legal advice may be the best way forward. Surely there must be some capital from the sale of the house?

hotblu

Hello Guys and Girls,

Just thought I would put my tuppence in. I currently own my own property and my sister lives their with her two children. She is currently claiming LHA (albeit a small amount). We told the local authority that we were related and they advised us they would have to look into it further before payments were made, they said they were looking to see if the tenancy was for financial gain... which is fair enough. After quite along wait everything was sorted. So basically, best thing to do is make the claim BUT be honest and open about everything.
The only thing that is puzzling me about the OP is how did your parents manage to claim LHA if they already owned a property? Or did they sell the property first and then make the claim?

Hotblu

Oldernotwiser

RDB wrote: »

they couldnt afford the mortgage so I helped them out instead of them losing the house.

they are currently getting LHA but the place they live is no good for health reasons.

But your first post says that your parents weren't living in the house you've bought, but renting it out to tenants. They were also claiming LHA for the property they actually lived in! Helping them from losing their home hardly covers this situation.

real1314

Ditzy wrote: »

Was intrigued by this response so therefore looked into the commercial tenancy and found this report which may give some insight into what a contrived tenancy may or may not be

http://www.osscsc.gov.uk/aspx/view.aspx?id=1975

http://www.osscsc.gov.uk/aspx/view.aspx?id=1942


But please rephrase your reply to not ENTIRELY true as this could be mislead people into thinking they can just rent to family members and receive HB/LHA for the property.

But the report gave interesting reading and further educated me on HB/LHA legislation!!!

But on the understanding of the original query

''RDB I have bought a house off my father that he was renting to tenants for over 10yrs, they have given notice to move out now.

My parents do qualify for Housing allowance and would like to now rent it off me and claim housing allowance.

I know there are 2 problems that we are related and that they used to own it until a few months ago.

I dont mind paying for professional help if there is any way that they would be able to get LHA to live there.''

The LA may assume that as the son purchased the house and rented to father that it may be deemed as contrived on the basis:-

“Under Housing Benefit Regulation 7(a)(i) a person who is a ‘Close Relative’ of his/her landlord and is treated as not liable to make payments of rent, and subsequently cannot be paid Housing Benefit. This tenancy can be conduced as being ‘contrived’ so as to take advantage of the Housing Benefit system.”

http://www.dwp.gov.uk/advisers/rr2/housingbenefit/

http://www.adviceguide.org.uk/index/life/benefits/help_with_your_rent_-_housing_benefit.htm#restrictions_on_how_much_rent_housing_benefit_will_cover

Further legal advice may be the best way forward. Surely there must be some capital from the sale of the house?

There's no need to amend my post, but your first post on this issue is far more misleading ("you cannot get LHA for relatives that own property you intend to rent"), possibly perpetuating the myth that you can never receive HB /LHA when rentng from a relative. Your post was not entirely true, mine was.

One of the commissioner's decisions relates to rent paid to a sister whilst living in the same home - so that's irrelevant.
The other relates to a "tenancy for life", and resulted in HB being awarded.
Furthermore, the quote you have pulled from that commissioner's decision, to support your view, is then trashed by the commissioner as:-

"an unsatisfactory explanation of the local authority’s reasons for its decision. Not only is it very poorly expressed, so that in my view it requires a knowledge of the housing benefit system to make an informed guess at what the local authority were attempting to say, but also it refers to a regulation which had ceased to apply some years previously."

The adviceorg link has nothing specific on this issue, the dwp link is just general advice too.

Just to be clear: HB regs state specifically that you cannot get HB whilst paying rent to a close relative who lives in the same home.
They do not say anything specifically about renting from a relaitive who does not live in the home that is rented. That is covered by the "contrived liability" areas, and is not specific to relatives in any way.

This is what the commissioner said:- "the “close relative” provision still applies only where the landlord and the tenant are living in the same property"

Perhaps you should amend your post to align with the wording that the commissioner used?

shjo558

There are 3 points in the regulations that would probably stop any entitlement to Housing Benefit:-

Housing Benefit Regulations 2006 -

Regulation 9. Circumstances in which a person is to be treated as not liable to make payments in respect of a dwelling

(1) A person who is liable to make payments in respect of a dwelling shall be treated as if he were not so liable where—

(a) the tenancy or other agreement pursuant to which he occupies the dwelling is not on a commercial basis;

(h) he previously owned, or his partner previously owned, the dwelling in respect of which the liability arises and less than five years have elapsed since he or, as the case may be, his partner, ceased to own the property, save that this sub-paragraph shall not apply where he satisfies the appropriate authority that he or his partner could not have continued to occupy that dwelling without relinquishing ownership;

(l) in a case to which the preceding sub-paragraphs do not apply, the appropriate authority is satisfied that the liability was created to take advantage of the housing benefit system.

real1314

The real problem with the OPs scenario is that he bought the property for what may have been a discounted price.
If he lets it to his parents on a proper tenancy agreement, then the point above will probably fall.
1. The "relative" thing - doesn't matter
Then the reg 9 stuff:
1. Non commercial - the agreement defeats this issue
2. Previous ownership - well if what the OP says is true, then this will fall also, although the parents will have to be able to show that they had no alternative but to sell.
3. Contrived - well, it can't be contrived to get HB/LHA as they are entitled to HB/LHA at the moment (according to OP), so that falls too. There has been a commissioner's decision on this point that is quoted in the Guide to HB/CTB by Zebedee Ward and Lister iirc.

The one thing the OPs actions may bring to light is the sale of the property and the financial basis of that sale to a relative. The LA would want to see evidence of the price being a fair market price. If the OP has paid a low price then a deprivation issue may well be highlighted by his choice of action.