Would We Be Entitled To LHA?

LadyMorticia

Heya guys.

Just wondering if you could help me with something. Thanks.

I'm on income support due to incapacity and lower mobility and high rate care of DLA. OH gets carers allowance for looking after me.

We currently live with his parents.

His parents have been thinking about taking out a second mortgage to buy another home and then renting it to us?

The rent pcm would be circa £400 - £495.

I know that there are rules about renting from family members but just wanted to know if we would be eligible for LHA if OH's parents can prove that the rent they are charging would be the same as the other private landlords would charge in our area?

I'm 23, OH is 20 and we have no dependents and no savings.

Obviously, if we aren't eligible for LHA then we will try to look down other avenues r.e. renting etc.

LHA was something that was mentioned to me the other day so I thought I would ask anyway.

Thanks in advance.

x

karenx

A proper contract needs to be drawn up which would also state you would have to move out if you could no longer afford the rent, you need to be treated the same as any other tenant would. The rent would also need to be same as other similar properties in the area.

KxMx

Special rules aside, you'd likely only get LHA rate for a one room property, and even getting Carers Allowance doesn't help, in fact, a friend of mine and hubby who get CA now have to pay quite alot of rent even though their income is just her disability benefits and his carers allowance (was JSA), and they sleep in seperate rooms.
Welfare state eh?

fluffymovie

TBH, if parents buy a property specifically for you to live in as suggested, then I don't think that I would consider it a commercial tenancy and so would probably make the decision not to pay LHA.

The decision would also not be helped by the fact that you live with them at present anyway and then they would be your landlords. Might also be classed as contrived so I would you to think very carefully about it before signing a tenancy

fiendishly

fluffymovie wrote: »

TBH, if parents buy a property specifically for you to live in as suggested, then I don't think that I would consider it a commercial tenancy and so would probably make the decision not to pay LHA.

This is true. Usually LHA would not be paid in these circumstances unless the property had been rented commercially for five years prior to the family member's application for LHA.

real1314

fiendishly wrote: »

This is true. Usually LHA would not be paid in these circumstances unless the property had been rented commercially for five years prior to the family member's application for LHA.

There is no "5 year" rule anywhere in the HB regs. In fact there are no rules about renting from a relative (unless you live with them).

What counts is that the tenancy is on a commercial basis and that the tenancy has not been set up to take advantage of the HB scheme.

OP & Ptnr have stated they are looking at getting a tenancy privately anyway, so they would get HB(/LHA) on that basis anyway, so the "taking advantage" bit shouldn't apply. The "commercial basis" bit is up to the landlord to sort out.

Jowo_2

As per the previous poster, I do not believe there is any regulation in existence which insists a property must be let to tenants in the past before relatives of the landlord can then move in and claim LHA.

The Landlordzone forum for HB/LHA has good info on posts there how to avoid a 'contrived tenancy' or google the term, plus the Shelter website has some info in their HB section.

The main thing is to be able to demonstrate that the tenancy hasn't been set up to take advantage of the HB system. For example, charging rent when they receive LHA but none or lower rent when the tenants are in employment, for example.

Oldernotwiser

KxMx wrote: »

Special rules aside, you'd likely only get LHA rate for a one room property, and even getting Carers Allowance doesn't help, in fact, a friend of mine and hubby who get CA now have to pay quite alot of rent even though their income is just her disability benefits and his carers allowance (was JSA), and they sleep in seperate rooms.
Welfare state eh?

A one bedroom property; not the same thing at all!

Oldernotwiser

The LHA rate for one bedroom accommodation in Bristol is £115 per week; was this the sort of thing his parents are thinking of buying?

LadyMorticia

Thanks everyone for your replies.

The situation is that OH and I want our own space. It's not necessarily a need as OH's parents would never throw us out and make us homeless. OH's sister also makes living here a bit difficult for us at times.

OH's parents said that they could either go down two routes. The first is a buy to let mortgage and the second is the second home mortgage.

OH's parent's are thinking of buying a £100,000 property for us to live in and then we pay them the rent which would cover the mortgage interest which would be approximately £450 a month or so.

I'm a bit wary, personally to be honest, as what happens if we either don't get granted LHA or one month something goes tits up and we can't afford the rent? Being in debt is one of my biggest fears.

ONW - Yep. That's the sort of thing they were thinking of.

Vixie_Pixie

HB regs state you can rent from a family member providing they are not a resident landlord. As long as you have a commerical tenancy agreement the Council cannot refuse you under HBReg 9(1)(a). However if the LA arent happy they tend to try to refuse you under Reg 9(1)(l) This reg states that you will not be entitled to HB if the tenancy was created to take advantage of the benefit scheme... if your relatives are buying the property to make your quality of living easier..the council will have difficulty proving your tenancy is contrived. The following case law would be on your side here R v Solihull Metropolitan Borough Council HB Review Board ex-parte Simpson (1994)

As it is only the 2 of you you will only be entitled to the LHA rate for 1 bedroom. Also from April 2010 the LA will no longer give the £15 cap if your rent is lower than your LHA. I hope this info helps!