Complicated doesn't cut it

Night_and_Day

Here's a really tough case for anyone kind enough to ponder. Please help if you can.

My hubby and I move to a new house (A) just over 2 years ago. Can't sell our old one (B) and therefore rent it out. Joint ownership for both houses.

I get made redundant and we decide to buy two more properties (C & D) on new mortgages, to let out. Joint ownership for both houses, but he pays all mortgages as I have no income.

Lettings have been running at a loss so far due to start up costs.

Hubby and I now separating . Split is amicable and he cares for mine and the kids' wellbeing. I am still out of work and he is paying child maintenance in accordance with CSA guidelines, arranged privately.

Hubby is moving into D and changing type back to residential ownership. I agree to transfer ownership of B, C and D over to him as I am not paying for those mortgages and have no income to absorb the losses anyway. The trade-off is that I get to stay in A with the kids and he will continue to pay my mortgage. He cannot afford to buy me out of all the properties, nor would I wish him to do so. The lettings business is to continue in his name, because to sell in this market would be too costly.

I wish to apply for means-tested income support as I'm not eligible for contribution-based Jobseekers, also I'm excused from seeking work as my youngest is aged 3.

Here's my question: Will the DWP accept my reasons for giving up my share of the lettings business or will they insist that I should receive a cash sum as settlement? If I remain as joint owner, then because of the equity in each property, my assets would be greater than £16K and I would not qualify for any income support. I just can't afford to make ends meet without income support assistance, despite receiving tax credits and child benefit. I feel like I would be missing out on benefit help purely on a technicality.

Thanks for taking the time to read this. Please, please can anyone offer advice.

Kimitatsu

I think you need to take legal advice to be honest! You may not have an income as such but in the eyes of the law the properties (all of them) are seen as joint assets and so the recommendation would be to split the proceeds.

If you sign them over to your husband (especially as you will still have to pay your oen mortgage) then you run the real risk of depriving yourself intentionally of assets which could be used to support yourself.

As amicable as it is at the moment, in my opinion you would regret signing everything over to him, as you currently suggest.

dseventy

You can't just sign over a huge asset like a house (or 2 or 3) and then plead poverty for means tested benefits. Whilst they may have no equity, its still a tangible asset.

As above seek advice.

D70

MissMoneypenny

dseventy wrote: »

You can't just sign over a huge asset like a house (or 2 or 3) and then plead poverty for means tested benefits. Whilst they may have no equity, its still a tangible asset.

Plus they do have equity of over 16k.

Night_and_Day wrote: »

If I remain as joint owner, then because of the equity in each property, my assets would be greater than £16K and I would not qualify for any income support.

You do need legal advice; but I can't see how giving away property so that you can claim income based welfare, will be allowed.

Why not sell two of the properties to release your money (equity) and use that money to live on?

Idiophreak

Night_and_Day wrote: »

I feel like I would be missing out on benefit help purely on a technicality.

It's hardly a "technicality" - you own 4 homes and are trying to claim you've no way of supporting yourself...

Night_and_Day

Thanks for your replies. I contacted the Income Support helpline again this morning for advice and the lady listened to all my circumstances. She is of the view that because the properties have made a loss, then I have no personal income. They cannot force my ex to sell up, therefore despite equity remaining in these properties, I am unable to access them. Also they seem to allow the division of property as part of marital separation without too much scrutiny from what she was saying.

She seemed very positive about the situation, stating that even if the claim was turned down now, I could reapply again once the Transfers were completed.

I have an appointment tomorrow with the solicitor who did the conveyancing for our properties, so will see what he has to say and report back.

The buy-to-lets were established with the intention of providing an income now and long-term future capital growth. Selling them in this market would not be wise after such a short period of ownership, as values have come down in my area since they were purchased. All mortgages, including the homes we will live in, are interest-only and outright ownership is only remotely possible with funding from the sale of rental properties many years from now (a gamble, I realise, but failing this I would downsize).

Oldernotwiser

You do know that these helplines are staffed by generic call centre operators who often get even the simplest cases wrong, don't you? You would be very foolish to base your plans on advice like this when your situations is so complicated and many important factors (like equity) don't even seem to have been touched on.

nannytone_2

also youre unlikely to get really good advice from the solicitor that was used when you were buying properties.

benefits law is a very specialist area, and you would be wise to make sure to see the right person for advice.

bobajob_1966

Night_and_Day wrote: »

They cannot force my ex to sell up, therefore despite equity remaining in these properties, I am unable to access them. Also they seem to allow the division of property as part of marital separation without too much scrutiny from what she was saying.

Whilst the DWP cannot force a sale, you can - if you have an interest in a property that is capable of being realised, they will count it as capital. Furthermore the key word in your second sentence is division - and handing over the rights to three of your properties is not a reasonable division.

Night_and_Day

nannytone wrote: »

also youre unlikely to get really good advice from the solicitor that was used when you were buying properties.

benefits law is a very specialist area, and you would be wise to make sure to see the right person for advice.

Thank you for that advice. Any suggestions who I should talk to?

[QUOTE\]
Whilst the DWP cannot force a sale, you can - if you have an interest in a property that is capable of being realised, they will count it as capital. Furthermore the key word in your second sentence is division - and handing over the rights to three of your properties is not a reasonable division.
[/QUOTE]
But if I have made no financial contribution to the properties I'm handing over, and if I have no personal income to pay my own substantial mortgage which ex-hubby is agreeing to pay on my behalf, I think that sounds a pretty fair deal.

eeeeeee

i would be very careful about this ;