Moving House

jamborii123

Hello, hope I'm posting this in the right place !
Basically I'm a single mother of 2 small children in receipt of income support, housing benefit etc.
What's happened is my parents separated 2 years ago, my mother moved out and my father remained in the family home (the house was built by my family and has been in the family for generations).
He asked me the other day to find out if it would be possible for him to move out and into a flat and he could then rent the house to me and my girls (he thinks it's daft that he's in the house alone when we're in a small property with no garden and 2 small children). Would I be allowed to do this ? I mean would the housing benefit department allow this ? Obviously he would become my landlord and I would sign a contract just wondering if they'd say no because he's my father. Thanks for any help

emsywoo123

http://www.dwp.gov.uk/publications/specialist-guides/technical-guidance/rr2-a-guide-to-housing-benefit/housing-benefit/

It is very difficult and highly unlikely you would receive LHA, but not impossible!

It seems very complicated and answers are not always clear.

Sorry, I know that is not alot of help.

jamborii123

hmmm this says you cannot claim hb is you LIVE IN THE SAME DWELLING AS YOUR LANDLORD
My father wouldn't be living there with me though ...

jamborii123

is this one of those confusing 'rules are not set' case by case situations ??? thanks for your help

emsywoo123

In my haste to be helpful I don't think I was as I linked you to a fairly rubbish page

If you google "contrived tenancy" you will get more info..

http://england.shelter.org.uk/get_advice/housing_benefit_and_local_housing_allowance/housing_benefit_if_renting_from_a_family_member

From Shelter:
I live in a property owned by a family member

If you live in a property owned by a family member and pay them rent, you may be entitled to housing benefit. The council will want to take a detailed look at your agreement with your landlord. You won’t get housing benefit if:

you're not paying rent on a commercial basis
the arrangement has been set up 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 are eligible for housing benefit), but not when you are working (and earning too much to qualify for housing benefit), this would be a contrived tenancy.

pmlindyloo

jamborii123 wrote: »

Hello, hope I'm posting this in the right place !
Basically I'm a single mother of 2 small children in receipt of income support, housing benefit etc.
What's happened is my parents separated 2 years ago, my mother moved out and my father remained in the family home (the house was built by my family and has been in the family for generations).
He asked me the other day to find out if it would be possible for him to move out and into a flat and he could then rent the house to me and my girls (he thinks it's daft that he's in the house alone when we're in a small property with no garden and 2 small children). Would I be allowed to do this ? I mean would the housing benefit department allow this ? Obviously he would become my landlord and I would sign a contract just wondering if they'd say no because he's my father. Thanks for any help

Several points to consider.

1. Is the property in your father's name? Does your mother have any rights to the house or has this all been sorted out legally?

2. Does the property have a mortgage on it or is it mortgage free? If there is a mortgage on it then your father would have to get permission to let it out from his lender and this may involve changing to a Buy to Let mortgage ot paying extra fees.

3. You can claim HB on a property owned by a family member but there are some hoops that you have to go through.
The property must be set up with a property tenancy agreement and your father would have to fulfil all his obligations as a landlord. He would have to charge a rent that was on par with rents for similar properties. You would need to check what your Housing Allowance is by looking up the rate for your circumstances on your local council website. If the new rent was higher than your allowance then you would be expected to make up the shortfall.

It is all possible but it will be looked at carefully. They are looking to see if you are doing this to take advantage of the benefit system. (Strange, I know since you are already receiving HB but that's how it is.)

It must be seen as a proper tenancy agreement e.g. your father would evict you if you didn't pay your rent etc etc.

The only other problem might be if your father moved to a flat and then expected to receive HB himself whilst still owning a house which is rented to his daughter.

jonliv

It is perfectly possible to claim LHA when renting from a relative as long as the relative does not stay with you, They are renting to you on a commercial basis (Means they are charging you the market rate for the property)

Also that this is not a 'contrived tenancy ' You cannot claim HB if the local council believes that your liability to pay rent has been created to take advantage of the HB scheme. For example, if you live rent-free while you are in work, but have to pay rent when you are unemployed.

If you can satisfy the local authority that the arrangement was not intended to exploit the HB system, you may be able to get benefit.

I think you ought to be able to satisyfy your LA that you meet these criteria

As long as you have a lease I can't see any problem

Mind you this will preclude your father making any claim for LHA

xposted there sorry

Jono

Caz3121

The main thing is to prove that is is a commercial tenancy.
Some areas to look at are;
Your maximum rent will be the LHA for a 2 bedroom property in the area (assuming you don't have a child over 10) If your fathers house was rented in the open market what sort of rent would it demand and how different is this? (they would expect the property to be at market rent as if it was being rented to a stranger and you would make up any difference from your benefits)
If you are charged a 'family discount' or 'rent=LHA' then it may be deemed a contrived tenancy
Father would need to take landlords insurance, gas checks, pay tax on rental income etc and be prepared to evict you if you did not pay your rent

It is not impossible as has been said but can be complex

emsywoo123

It is indeed complex.

I receive some LHA and I rent from my parents-they want to sell this house however (value tumbling due to local poor developments, plus some inheritance money has come in for mum) but my council say if they buy a house elsewhere and I rent it, I WILL NOT be eligible for any LHA.

No reason, no explanation. Clear as mud eh?!

Firefox1975

He would be paying tax on the Market rent of the size of that property.

He would be better off selling the house and purchasing a new flat for himself and a house for you to live in. That way you wouldn't need any HB from the govt and he could still retain his capital (and your future inheritance)

jamborii123

Firefox1975 wrote: »

He would be paying tax on the Market rent of the size of that property.

He would be better off selling the house and purchasing a new flat for himself and a house for you to live in. That way you wouldn't need any HB from the govt and he could still retain his capital (and your future inheritance)

He doesn't want to sell the house, like I said it's a family home and he would be heart broken to see someone else living there. Also I'm already in receipt of housing benefit (single mother of 2 under 10) so him selling the house wouldn't mean that I wouldn't need HB