parents want to buy a house for brother on benefits

here_for_advise

Hi,i am here asking for some advise for my parents.
My brother who is currently without a job lives in a flat that could only be described as horrible.
My parents hate him being there and are in the position of being able buy a small house/flat for him to live in,they also own a couple of other propertys that they currently rent out.
They would like to know if it is possible to buy it as an investment for themselves but be able to rent it to him as he gets his rent paid from his benefits.
Has anyone else done something like this + what are the pros and cons.
Thanks for any advise

seven-day-weekend

I think this would be seen as a 'contrived tenancy', i.e the parents only bought the flat for the brother to live in, it would not be available to rent to anyone else if he wasn't living in it, and they would not chuck him out if he could not pay. Therefore he would not be able to get help with his rent.

He could however apply for Council tax Benefit.

LittleMax

It will be very difficult as the Benefits Officers are likely to consider it a contrived tenancy. It would be easier to prove 'commerciality' if he were to rent one of their existing properties, as there is a history of rents set etc. But even then it wouldn't be a given, and he would face lots of questions.

Tancred

I suppose a good solicitor would be able to set up a corporate structure that would hide the ownership of the flat. It would be worth talking to one.

g_attrill

Tancred wrote: »

I suppose a good solicitor would be able to set up a corporate structure that would hide the ownership of the flat. It would be worth talking to one.

I think that would count as fraud - you are doing something to obtain money which would not be paid to you if the other party had the knowledge which has been hidden.