Housing benefit renting to family

gillip

I am confused by the previous thread on this that seems to have gone off topic, so can i ask for help here please,

I have a property i have been renting out commercially for 10 yrs my tenants have vacated and my sons ex girlfriend ..who also has his child, my grandchild, wants to move from her 2 bed flat to this 2 bed house (owned by me) she is currently receiving housing benefit and the rent is the same amount...will this be a problem (her son being my grandson) and will she still be entitled to claim housing benefit...we are anxious to know as she needs to give notice and I need to relet to pay the mortgage. My grandson has my surname (my sons surname) so they will see there is some connection I imagine, and we wonder if this will be create a problem.. if not but should her and my son ever get back together, could it then become a problem if they needed to put in a new claim for H Benefit...I am trying to cover every angle to prevent problems all round for her and me
Any help advice would be much appreciated thanks a lot

SomeBozo

They will do a "contrived" check on whats going on.

Is the house available to anyone to rent?

If they found a more "in need" family would you rent it to them on HB? Lets say they found someone who could afford to pay more, would you rent it to them? Could I rent it off you etc.

Bozo

zzzLazyDaisy

It is possible to claim LHA to cover rent even where the LL is a relative, provided it is a commercial arrangement, and provided the LL is not the parent of a dependent child who is living in the rented house.

I know of a couple of people who rent to their adult children who are claiming HB/LHA

Some councils are better than others - have you checked your council's website? Depending on where you live, some have very helpful info about this on their website. Otherwise, I'd suggest going in and speaking to someone.

One other thing - if you have a mortgage, some lenders do not allow renting to relatives, so you may wish to clear it with your lender, if you have one.

But I agree with the above poster, in the circumstances you describe, it should be fine

Oldernotwiser

zzzLazyDaisy wrote: »

One other thing - if you have a mortgage, some lenders do not allow renting to relatives, so you may wish to clear it with your lender, if you have one.

Also, some lenders, insurers as well, won't let you rent to someone on benefits, so you need to check this out before signing an agreement.

real1314

SomeBozo wrote: »

They will do a "contrived" check on whats going on.

Is the house available to anyone to rent? He's rented it up to now, so presumably "yes"

If they found a more "in need" family would you rent it to them on HB? Lets say they found someone who could afford to pay more, would you rent it to them? Could I rent it off you etc. - I don't think they actually check that sort of thing.

Bozo

Imnsho, it should be fine. They may ask a few questions (One council had a standard set) mainly about what you would do if they didn't award HB and the tenant couldn't pay their rent.

zzzLazyDaisy

You are right, the local authority doesn't check whether there are more needy people when considering whether to award LHA (formerly HB)

The only things they are concerned with are

1 does the tenant meet the financial eligibility requirements, and

2 is it a commercial arrangement, and there is no element of fraud.

So if, for example, your son were to buy a house for his girlfriend and child to live in, but you agreed to be the landlord to avoid the ban on parent lamdlords receiving LHA to house their child, that would be an intention to defraud.

But really the only way to find out is to speak to your own local authority, because although the same rules apply across the board, some make it easier than others. Presumably What you dont want to do is grant a 6 month AST to someone who then is refused LHA and so cannot afford to pay any rent.

Oldernotwiser

zzzLazyDaisy wrote: »

Presumably What you dont want to do is grant a 6 month AST to someone who then is refused LHA and so cannot afford to pay any rent.

BECAISE THEN YOU'D HAVE TO EVICT THEM AND, IF YOU DIDN'T, THAT WOULD PROVE THAT IT WASN'T A GENUINE COMMERCIAL TENANCY! (Bloody caps lock!)

EdInvestor

Presumably you're already aware that the council sets max LHA/HB limits for tenants based on family size etc.

Make sure it's a commercial arms length deal with AST in place and you should be fine.

gillip

Thank you all, and yes the rent for my house is exactly the same as she is paying now for her flat .... and i have neither decreased or increased it, the only thing i will do is cut out the estate agent (who is currently advertising it... i have had them run the tenancy for the last 2 yrs, a waste of good money as they did a hopeless job not communicating with me abroad etc!!) ........... prior to going abroad i did it myself, without an agent, as had good tenants for 8 yrs.

Thanks I havent really got time to discuss it with the HB people as she has to give her notice tomorrow (her rent due date) or wait another mth and I need the rent for the mortgage, so would have to reconsider, which i dont want to do, but 2 mths without rent is to long. I would have had more time to consider all this, if the letting agent had thought to email me that my tenants were leaving!! £70 a mth for old rope it seems!!! but having just returned to the UK i am in a rush hence my post
thanks again, I think by what most of you have said here it should be ok and she is not technically related to me in any way, her and my son were not married.