Bought mum's house, ex local authority.

Leanne1812

Hello forum,

I am looking for some advice. My husband and I used our savings to buy my mother's flat from the local authority. We informed our solicitor during the buying process of what we had done and he said the easiest thing to do is after 3 years of ownership( she loses discount if before) my mother signs the house over to us.Over 3 years have passed and we are a bit unsure how to proceed. We still don't know for sure if this is the best way forward. Please bear in mind our savings purchased the house outright and we did buy as a long term investment as i'm sure many others have.

The situation will be in a few years, or maybe sooner, my mother will need to move to a ground floor house due to her worsening arthritis. My worries are that we'd need to take on another mortgage for around £30,000 over and above the profit made from the sale of the flat. We didn't mind using our savings to purchase the house but will be unable to fund an additional mortgage without some income. The grey area is, if we were to purchase another house would my mother be entitled to claim housing benefit as a private tenant. The problem being her daughter would be her landlord. I'm not sure if this is allowed or not.

Any advice most welcome.

theartfullodger

Suggest you look here...

http://england.shelter.org.uk/get_advice/paying_for_a_home/housing_benefit_and_local_housing_allowance/what_is_local_housing_allowance

Specifically here...
http://england.shelter.org.uk/get_advice/paying_for_a_home/housing_benefit_and_local_housing_allowance/housing_benefit_if_renting_from_a_family_member

which states..

I live in a property owned by a family member - can I claim housing benefit?

If you live in a property owned by a family member and pay them rent, you may be entitled to housing benefit. However, this will not be the case if you (or your partner) are responsible for a child and are renting from the other parent of that child.
The council will also want to check:

• that you're paying rent on a commercial basis. In other words, that it's a proper tenancy, not just an informal arrangement between family.
• that the arrangement has not been set up in order to take advantage of the housing benefit system - this is called a 'contrived tenancy'. For example, if your landlord only asks you to pay rent when you are not working (and so eligible for housing benefit), but not when you are working (and earning too much to claim housing benefit), this would be a contrived tenancy.

Tricky area & often local council won't understand the rules & may just say no...

suggest you get advice from CaB
http://www.citizensadvice.org.uk/
or Shelter...
http://england.shelter.org.uk/

0808 800 444

Both CaB & Shelter are charities & have too many demands & you may need to be very patient...

Cheers!

Lodger

Fire_Fox

As far as the government is concerned, you have used your savings to buy your mother a house NOT as a long term investment as you had no 'right to buy' that council house. If your mother signs the house over to you now, this may well be deemed 'deprivation of capital' when she needs full time care or needs to claim any form of benefits including LHA. If your mother needs to move to a ground floor flat it may be best to sell the existing house and for her to use the equity to rent somewhere in sheltered accommodation. I strongly suspect the daughter being the landlord arrangement would be deemed a 'contrived tenancy' since the deposit for the house would be the mother's anyway. I don't think you need Shelter's advice, you need to pay for legal advice as what you have done and what you hope to do are not strictly legal.

blckbrd

Do you not have a couple of btls you could sell to raise some funds instead of trying to make more money out of your mum??

leveller2911

Jeez, some people, If the "Thanks" count wasn't relatively high I would have thought an "under the bridge" dweller was at work.;)

Leanne1812

Thanks Artful & Firefox for your helpful replies. I forgot to mention I am in Scotland where I know the law is different.

Firefox, I agree and understand your points completely. I am just trying to plan for the future and hopefully help make life a bit easier for mum. I will seek advice from CAB, I just wanted to have an idea if what I am proposing would be an option.

Thanks again to both of you.

Running_Horse

Was you buying it her idea, or yours?

Leanne1812

Buying it was both our ideas. It suited mum as she worked at the time so instead of having to pay rent she paid nothing.

Leanne1812

blckbrd wrote: »

Do you not have a couple of btls you could sell to raise some funds instead of trying to make more money out of your mum??

I didn't realise it was a crime to plan for our retirement. Would you rather I sold what will be our pension and just claim benefits when I retire?

not_tonight_josephine_2

Leanne1812 wrote: »

I didn't realise it was a crime to plan for our retirement. Would you rather I sold what will be our pension and just claim benefits when I retire?

Your "pension" is an asset which belonged to the taxpayer and was sold to you at a knock down price. So either way the state is funding your retirement I'm afraid........

Batchy

why dont you rent it out to someone else, get your mom to rent it off someone else, and give her the money... ie income to pay the rent on the new place.

then you are sorted. Plus if she is out of work due to age or disability anyway, she will get rent paid regardless by the council i would have thought.

Nothing sinister there...