Need advice: Renting to family and them claiming benefits

steviebr24

I am in the forces and my brother rents my house off me, as I am based away and not there all the time its easier to rent to a trusted family member. He as just been redundent and is looking at claiming housing benefits, would there be any implications, as the house is still my postal address for my bank statements, would this be a problem also:

• Would I have declare to anyone that the house is now rented, currently we have a verbal agreement would i need a written one.
• Would I have to transfer my postal address.
• Is there anything my brother needs to do.
• Do the housing benefit agency have any rules in renting to family

Any help would be most appreciated

Steve

scrummy_mummy_2

Firstly we need to define whether you have actually let it to him or if he is just 'sharing' it with you......

How did you originally set this agreement up? Was it an informal one? If it was he won't be able to get housing benefits because they'll want to see a written tenancy agreement.

If it was/is a written rental agreement, you must have your mortgage lender's permission to let the property so if you let it without this, your insurances will be invalid and the lender can ask you to repay your mortgage for breach of contract.

If he is living in your home, effectively as a permitted occupier/sharer, whilst you are overseas/posted/on detachment and has no verbal/written tenancy agreement in place, then he isn't homeless....but I don't know if benefits are payable for sharers??????

Best thing to do would be to approach your local benefits office and ask them directly. They can be very helpful but be careful because money is tight right now and lenders are not too understandiing when it comes to what they percieve to be 'risks' currently! so consider how you handle that one carefully!

steviebr24

I have had the permission of the morgage company to rent the house, changed over the insurance so everything is ok there, as yet there is no written agreement which I understand there will be a problem.
Would the benefits agency see a problem with me using the address as my postal address even tho I am the land lord and not living there?

bazzais

I think the benifit agency would have a problem as your not supposed to rent to family. The good thing is that they have more pressing problems than genuine people like yourself.

tbs624

The general rules on HB/LHA (Local Housing Allowance) say that you can’t claim if you live, or have lived with a close family member, even if they now charge you rent.

Your brother should be able to claim HB if you as the owner/LL don’t live there and it can be proved that the tenancy is a valid one on a commercial basis, ie, not one which is ”contrived” simply to take advantage of the HB system.

However, you say that you are in the forces so presumably you are back staying at home at the property from time to time, plus you say that it is the address for all your own UK mail: this is likely to affect how the tenancy would be viewed for HB purposes as you would not be able to do either of these things if the property was let on a bonafide tenancy to a non-relative. No HB could be paid for any time at which you also lived in the property.

You would also need to keep records of rental income & expenditure for HMRC, have a gas safety certificate, and it is a requirement under S48 of the LL and T Act 1987 that a LL provides a UK address/agent for “the Service of Notices” whilst out of the country.

Some HB offices have put forward the argument that because there is no rent liability until such an address is given then HB will not be paid out where S48 has not been complied with.

You would also need to make appropriate arrangements for C/Tax, and gas /elec/water bills. Even with family/friends ( some would say especially with f&f) all these sorts of things should be formalised. Who would be responsible for dealing with any repair issues whilst you were out of the country?

Additionally if you have your mortgagor’s consent they will usually have stipulations on the specifics of the AST.
Is there a welfare adviser within the forces who can help you with any of this, as many armed forces members must look at the option of renting out their homes whilst on service?

Or , as your brother has been made redundant, could he seek some advice of his own on the situation from one of the CABs, or housing advice centres?

Edit: You may also want to post part of your query over on UK Armed Forces MoneySaving and/or Benefits, Tax Credits & Jobseeking