Housing Benefit - Contrived Tenancy?

Hamuhu

Hi,

Please can you let me know your thoughts.

I have lived with my parents most of my life and when I graduated and started work, Me and My father decided to buy our council house under the right to buy scheme (this was in 2004). As I was the only person working and earning a living I was paying for the mortgage in full and my father had NO financial input whatsoever.

I got married in July 2005 and my mother and father decided it was best for them to move out and so they did. They lived in a privately rented house in which they got HB to pay for the rent.

My wife fell pregnant around June 2006 and we decided to look for a bigger house as we were living in a bungalow at that time. We had also paid the mortgage off at this point as it was very small. We went house hunting and found a terraced house and moved in around october 2006. AT this point, my father who has passed retirement age is not in the best of health and is struggling to live in a property with stairs. We decide to rent our old house to him. HB at this point refuse to award him benefits as he had an interest in this house and confirmed via email that he could claim HB in OCT 2011.

My father wanted to reside in the bungalow anyway as this was suitable for his needs and I decided to rent the bungalow to him privately at market rates. He struggled to pay rents but never fell seriously behind and has maintained rental payments since moving in OCT 2006. I have had conducted regular GAS Safety checks, Electrical checks, EPC provided, AST in place regular property checks etc. My father even has a rent book which he can use to track payments.

ANyway, we applied for HB again in OCT 2011 to which they first rejected the claim suggesting it was contrived. We then sought legal help who took on our case and eventually they found a loophole stating that 5 years has to pass since the day the tenant 'no longer holds an interest in the property'. Therefore we would have to wait until SEPT 2012 before the 5 years have passed and claim again. They also said that even if we did claim at this time, they were still likely to refuse the claim as they see it as a contrived tenancy.

Their main reasons for their view on this being a contrived tenancy are:

- The bank statements provided by my father do not show regular payments being made to the landlord
- The landlord is using an agent for two of his other let properties and in this case is deciding to manage himself.

My arguements against the points above are :-
- My father has suffered a heart attack and has had his driving license revoked as he can no longer drive. This means he is reliant on getting lifts to the bank which he does. On the occasions which he goes to the bank he withdraws a £1000 approx and uses this pay rent for the next few week and also shopping etc. He is surely not going to go the bank to withdraw £100 every week just for the rent?!? Thats absurd.

-Secondly, they have assumed 2 of my other let properties are run by an agent where as a matter of fact only one is and the other one that is not let to my dad is also managed by me The only reason one property is managed my an agent is because I have had some tenants from hell in the past and need more robust procedures to vet tenants as the area isn't the best and attracts likewise tenants!

We have resubmitted the claim and they have asked for ALL SORTS of evidence from me as a landlord and from my father the tenant. I am under the impression that they will use the above two excuse again to say that the tenancy is contrived.

WHAT MORE COULD WE POSSIBLY DO TO PROVE OTHERWISE?? IT SEEMS THE LA ARE HELL BENT ON NOT GIVING MY DAD HB.

What are your thoughts on the above??

I would love to hear your views.

Thanks

Frustrated Landlord/Son

krisskross

Surely you owe your father at least the discount received to buy the bungalow.

He appears to have made nothing from giving up his home except grief. Had he stayed there as a tenant he would be paying no rent and have security.

you appear to be the only one to benefit from the arrangement.

Hamuhu

krisskross wrote: »

Surely you owe your father at least the discount received to buy the bungalow.

He appears to have made nothing from giving up his home except grief. Had he stayed there as a tenant he would be paying no rent and have security.

you appear to be the only one to benefit from the arrangement.

Yes you are right. Maybe I do. But, this is a completely different topic?

What I am discussing here is whether or not my father should get HB?

How is THIS tenancy contrived? From a business perspective, the tenancy is commercial…isn't it? It is no different to how i rent any other property, and how many other landlords let other properties...

McKneff

Couldnt have put it better my self Kriss kross.

Look after your parents yourself, instead of expecting the tax payer to do it, they looked after you, wiping your tears and your ars e for a lot of years. They won't be there with you for all of your life, remember that

krisskross

Hamuhu wrote: »

Yes you are right. Maybe I do. But, this is a completely different topic?

What I am discussing here is whether or not my father should get HB?

How is THIS tenancy contrived? From a business perspective, the tenancy is commercial…isn't it? It is no different to how i rent any other property, and how many other landlords let other properties...

Whose name(s) are on the deeds? Surely the HB people will expect him to have some sort of capital if he bought a property just 8 years ago. Or at least a financial interest in a property.

Sounds very iffy if he bought a house 8 years ago and now wants to claim LHA to live in the same property.

You're all heart aren't you?

pickpocketlocket

Me and My father decided to buy our council house under the right to buy scheme

Were/ are his name on the deeds? If so, when were they removed, and why?

Do you allow all your tenants to pay you in cash? Why was a standing order not set up? Have you declared his rent as income for tax purposes?

If your father was on such a low income that he would have been entitled to benefits, how could he afford to pay you the full market rate for so long?

Your reason for using an agent to initially vet the tenants seems fair, however why did you not then self manage, once the tenants were in place?

McKneff

I'm quite surprised that you parents after moving out of the bungalow were allowed to claim HB when your father owned half a bungalow.

corbyboy

Hamuhu wrote: »

Their main reasons for their view on this being a contrived tenancy are:

- The bank statements provided by my father do not show regular payments being made to the landlord
- The landlord is using an agent for two of his other let properties and in this case is deciding to manage himself.

My arguements against the points above are :-
- My father has suffered a heart attack and has had his driving license revoked as he can no longer drive. This means he is reliant on getting lifts to the bank which he does. On the occasions which he goes to the bank he withdraws a £1000 approx and uses this pay rent for the next few week and also shopping etc. He is surely not going to go the bank to withdraw £100 every week just for the rent?!? Thats absurd.

-Secondly, they have assumed 2 of my other let properties are run by an agent where as a matter of fact only one is and the other one that is not let to my dad is also managed by me The only reason one property is managed my an agent is because I have had some tenants from hell in the past and need more robust procedures to vet tenants as the area isn't the best and attracts likewise tenants!

How he withdraws his money is not particularly relevant. It's how you are paid that's more important.

Are you saying he actually gives you the money in cash on a weekly basis?
Do you give him a receipt?
Do you have a separate bank account that all your rental money goes in? Does that show regular deposits from your father?
Do your other tenants pay in cash?
Does you father have a tenancy agreement?
Did he pay a deposit?
Is he paying rent at market rate?

Having two other rental properties should make this process easier. If you treat your father's tenancy differently to the others then it is clear that something is wrong. But if you can show that you manage all three tenancies the same then it will work in your favour.

McKneff

Very little is mentioned of your mother, why is that please

faerie~spangles

You have profiteered from the right to buy scheme via your parent's tenancy.

Had your father not bought the property with you he'd be entitled to benefits.


Now you expect the gov't to pick up the tab for your father's rent payable to you.


Seems you want to milk the system.

krisskross

I thought only the actual tenants on the rent agreement could purchase under the right to buy scheme. So it matters not who paid the mortgage, your parents actually bought the house/bungalow.