Housing Benefit - Renting from family

jasper2004

Apologies for long post, but after some advice please.

2007, following my wife's terminal illness diagnosis, i gave up work to be her full time carer and my wife and i moved into my Nan's bungalow (Nan was in Nursing home). We signed a formal tenance agreement & paid £600 rent per month. Amongst the benefits we claimed, housing benefit contributed.

August 2012 my wife dies. I notified the relevant benefits people and all benefits stopped. Instead of going back on job seeking benefits i started up small business as self employed and claim WTC

Sept 2012 my Nan dies. The bungalow was left to my mum who agreed to continue renting to me, but as was on my own, struggling with business start up, we agreed rent of £450. A formal tenancy agreement was drawn up and signed.

Present day - Due to low income, i have put in request for HB. They seem satisfied with everything but are questioning why the rent is low at £450 when it would normally be nearer £600.

The honest answer is that it was felt £450 was a fair figure, considering there is no agent costs involved, i agreed to cover/carry out any maintenance issues, and Mum (landlord) is assured the property will be kept in good repair (shown over last 5 years of me living here)

I have never hidden anything from benefits people, and i dont wish to start now, however i am a little nervous that a genuine gesture may prevent my claim. Can anyone suggest the best way of answering this question

bryanb

Isn't there something about "Market rate" where rent is concerned?

BigAunty

Google 'contrived tenancy' and you will uncover masses of relevant info about what the council is looking for and how you can challenge a rejected application.

Local councils take greater scrutiny over HB claims when landlord/tenant are related. Signs that a tenancy is contrived (i.e., set up to exploit the HB system) is when there is no rent payable when someone is in employment but full rent charged when HB is payable.

They are supposed to operate on a commercial basis. I've never seen a consensus on what this means - whether it is supposed to operate at market rent or whether it just means that the operation of the tenancy has to be formal, such as a tenancy agreement provided.

So I think this is what the council is reviewing - just do more research into contrived tenancy and the commercial requirements.

Naf

The fact that you have been paying rent all the while since 2007, with formal agreements in place will certainly be in your favour - make sure you can show this to them easily.

paddedjohn

Tell them the decreased rent is because the property is in need of modernisation.

Naf

Can you actually show that your income has dropped recently?
If it hasn't dropped significantly they may wonder how you have paid your rent up until now, and why that same source can't keep paying it.

jasper2004

paddedjohn wrote: »

Tell them the decreased rent is because the property is in need of modernisation.

That would be truthful as after my wife passed away, the place needed decorating throughout which i agreed to do and continue to do so. I also agreed to pay for the central heating contract and any general maintenance required.

Naf wrote: »

Can you actually show that your income has dropped recently?
If it hasn't dropped significantly they may wonder how you have paid your rent up until now, and why that same source can't keep paying it.

A friend paid me to look after his dog and store his belongings while he travelled for a few months .... I can easily show that, as was paid monthly into my account

Witch_Hazel

jasper2004 wrote: »

2007, my wife and i moved into my Nan's bungalow (Nan was in Nursing home). We signed a formal tenance agreement & paid £600 rent per month. Amongst the benefits we claimed, housing benefit contributed.

Sept 2012 my Nan dies. The bungalow was left to my mum who agreed to continue renting to me, but as was on my own, struggling with business start up, we agreed rent of £450. A formal tenancy agreement was drawn up and signed.

Present day - Due to low income, i have put in request for HB. They seem satisfied with everything but are questioning why the rent is low at £450 when it would normally be nearer £600.

The honest answer is that it was felt £450 was a fair figure, considering there is no agent costs involved, i agreed to cover/carry out any maintenance issues, and Mum (landlord) is assured the property will be kept in good repair (shown over last 5 years of me living here)

If your mother was to rent this property to a member of the public, would she do the same for them, part I have highlighted in red?

jasper2004

Witch_Hazel wrote: »

If your mother was to rent this property to a member of the public, would she do the same for them, part I have highlighted in red?

No, but then she would have to take into account finding new tenant, risk factor, agent overheads & maintenance overheads. What i have always had in 6 years living here is a clear commercial agreement.

I take the point you are making though

Errata

Sept 2012 my Nan dies. The bungalow was left to my mum who agreed to continue renting to me, but as was on my own, struggling with business start up, we agreed rent of £450. A formal tenancy agreement was drawn up and signed.

That looks like mates rates - a contrived tenancy.

jasper2004

Errata wrote: »

That looks like mates rates - a contrived tenancy.

Been here 6 years. Its not contrived, whatever you think it may look.
If anything ive been overly cautious to makes sure i have been up front with the benefit folks and hopefully the decision makers will see that.

Thanks for all feedback