Renting to Family on DSS?

ConfusedUK_2

Hi to all. Hope someone can help, My Wife was left a property which is in need of some upgrade, which we hope to do early next year.When this is done she wants to rent out as a form of income for us[ i do not work / ill health] , The problem is she wants to rent it to her Son / Partner both are on dss, they also have kids. I am not sure it is a good idea, even if we get the rent paid direct into our bank, However are we aloud to rent the property to them in the first place being family? I am sure some people would think we were giving them there rent money back to them every month, [can't afford to do that].
Any info much appreciated. We will of course check this out fully with the DSS nearer the time. Many Thanks . Happy New Year to all.
Many Thanks to all. Think i have enough info now...

dmg24

You cannot have the rent paid directly to you (except in limited circumstances, such as mental incapacity), it is paid to the claimant.

The LA will look at whether the tenancy is contrived or not i.e. set up with the main intent of claiming benefit. If you do a search on the Benefits board for 'contrived tenancy' you will find lots of information on the topic.

Oldernotwiser

Also need to consider how much you trust son and partner to pay the rent regularly; could be a source of friction if money's tight.

Fred1_2

I'm sure the LHA claim form asks if the landlord is a family member. I don't know what, if any, affect this has on LHA.

I wonder if setting up as a limited company would be a way round this.

Also heed Oldernotwoser's words. renting to friends and family can be a very rocky road when money gets tight. Are you really going to be abke to resist the "we can't pay rent this month, we need to feed your grandchildren" approach?

dmg24

Oldernotwiser wrote: »

Also need to consider how much you trust son and partner to pay the rent regularly; could be a source of friction if money's tight.

I don't think I'd do it, whether they were claiming benefits or not. There is always that expectation with family, that things are fixed immediately, things are replaced more frequently etc. Whilst I am sure that ConfusedUK would be a very fair landlord to anyone, it is much easier to say no to a stranger!

Oldernotwiser

dmg24 wrote: »

I don't think I'd do it, whether they were claiming benefits or not. There is always that expectation with family, that things are fixed immediately, things are replaced more frequently etc. Whilst I am sure that ConfusedUK would be a very fair landlord to anyone, it is much easier to say no to a stranger!

Quite agree. Also, you can charge strangers more than you can charge family!

50plusabit

As long as the owner does not live in the property it is fine, you are allowed to rent to family on DHSS. They will now pay to the tenant not the landlord.
You can charge the family the going rate according to the council in your area, all are different.
Letting to family is fraught with problems, fine when all is ok, but when a problem happens, it can cause major problems within the family. I would think a better thing would be to rent the house to non family member, as the dhss are paying the rent so they can fine alternative property.

dmg24

50plusabit wrote: »

As long as the owner does not live in the property it is fine, you are allowed to rent to family on DHSS. They will now pay to the tenant not the landlord.

You are allowed to, but it is certainly not as simple as saying 'I am renting to my son'. Questions will be asked by the LA as to the agreement between the two parties.

On a sidenote, the DSS and DHSS no longer exist!

SailorSam

I did this for my sister, the dhss asked lots of questions, but she had to rent from somewhere so when it was seen to be all above board we were allowed to do it.

As already pointed out, fine while everything is fine but never do it again. I lost a lot of money on the deal, the rent did'nt cover my loans, which was ok, but when i tried to sell the house had gone down in value.

ConfusedUK_2

Many Thanks for all the help. Yes i am aware of the pitfall's, [can't pay this month]. And if we do go ahead it will be alll legally done. One reason for doing this is so they have a better chance of getting out of their current situation [jobless]. The other is we know they will look after the property. We will give it a lot more further thought. Again Thanks, and here's to a better New Year for us all.

Gorgeous_George

Check this site to get the rent right.

I let a 4 bedroom house to a woman who is (I think) entitled to a 2 bedroom house according to the LHA website. The LHA for my area is;

2 Bed = £450
3 Bed = £475
4 Bed = £695!

I charge £420 but I think I might be robbing myself. The AST is due for renewal in April 2009 and a small review of the rent might be in order.

GG