housing benefit if related and used to own

Oldernotwiser

real1314 wrote: »

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.

I don't quite follow why you're saying that someone can claim LHA for a property they owned within the last 5 years, could you clarify?

real1314

You can claim if you can show that the reason you sold the property is that you would otherwise have lost it anyway.

"(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;"

So, if an owner got into financial trouble and sold their property on a rent back scheme, they can then claim HB/LHA, subject to the normal rules. However whilst a low value sale on a rent-back might be accepted, on a sale to a relative there is a greater question about the value of the sale and whether it was a market price.

Oldernotwiser

real1314 wrote: »

You can claim if you can show that the reason you sold the property is that you would otherwise have lost it anyway.

"(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;"

So, if an owner got into financial trouble and sold their property on a rent back scheme, they can then claim HB/LHA, subject to the normal rules. However whilst a low value sale on a rent-back might be accepted, on a sale to a relative there is a greater question about the value of the sale and whether it was a market price.

Thanks for the explanation but does that apply to a property that's been let out to tenants rather than occupied by the claimants themselves?

real1314

Good point. I forgot about that bit!

I guess that there's a bit of a conflict in the regs (assuming shj0558 copied and pasted accurately) as they refer to previously owned and then continued to occupy.

I think that this HB/LHA case would be more about capital/sale price issues than contrived tenancies.