What is a contrived tenancy

swampydrill

My relation and his girlfriend are living in a 1 bed flat with 2 young children, they have tried house swapping without success. I have some spare savings and was thinking of buying a 2 bed house, mortgage free and rent it to them. Is this allowed? or should i rent to someone else first and then give them the opportunity.

Horseunderwater

If you do this you have to draw up a proper rental agreement and be prepared to evict them in the same way that you would any other tenant. Rent must be similar to those of other properties and not vastly lower than others nearby.

richard9991

swampydrill wrote: »

My relation and his girlfriend are living in a 1 bed flat with 2 young children, they have tried house swapping without success. I have some spare savings and was thinking of buying a 2 bed house, mortgage free and rent it to them. Is this allowed? or should i rent to someone else first and then give them the opportunity.

AFAIK as long as they have a tenancy agreement and you would also be willing to rent to other people who are not relatives then this is allowed

HappyMJ

swampydrill wrote: »

My relation and his girlfriend are living in a 1 bed flat with 2 young children, they have tried house swapping without success. I have some spare savings and was thinking of buying a 2 bed house, mortgage free and rent it to them. Is this allowed? or should i rent to someone else first and then give them the opportunity.

Awkward one really as you want to help them out....but to avoid being contrived you really should collect a deposit and the first months rent...without lending or giving it to them. Do they have that sort of cash? Then once the rent is not paid you really should give them notice and be prepared to take them to court. Hard to prove that you would or would not do that though.

You also have to be careful of insurance as your tenants don't earn enough at the beginning of the tenancy you won't be able to claim on your rent guarantee insurance.

BigAunty

Google 'contrived tenancy' to understand why the council scrutinise it more and what they look for in terms of seeing if it complies with or fails this condition. There is reams of sensible info out there about this rule whereas I find the information given on here a bit partial or muddled.

By 'house swapping' do you mean that they are in social housing and are looking for a mutual exchange? And they are going to give up the security of tenure and cheap rent of this property, albeit overcrowded, to move into the private sector and depend on a relative's goodwill as to whether their tenancy continues?

BurnleyBob

OP needs to jump through some hoops and use finesse to keep the council snoops satisfied.

A proper commercial tenancy is a must. Also when asked - and he will be asked - an unswerving "yes" to questions about whether they'd be treated exactly the same as tenants who are strangers is vital (even if not actually true) because the said snoops need good cause to deny an LHA/Housing Benefit claim.

As the proposed house and first tenants would be the OP's initial stab at being a landlord, he would be well advised to advertise the property for all-comers (perhaps through an EA) then find all respondents unsuitable for the purpose of providing evidence that the family members weren't the only prospective tenants from the outset.

swampydrill

Yes they are in social housing but nobody wanting to swap a house for a flat. Maybe i should just go to the council and ask them. I may buy it out of limited company funds so all would be above board for sure

BigAunty wrote: »

Google 'contrived tenancy' to understand why the council scrutinise it more and what they look for in terms of seeing if it complies with or fails this condition. There is reams of sensible info out there about this rule whereas I find the information given on here a bit partial or muddled.

By 'house swapping' do you mean that they are in social housing and are looking for a mutual exchange? And they are going to give up the security of tenure and cheap rent of this property, albeit overcrowded, to move into the private sector and depend on a relative's goodwill as to whether their tenancy continues?

BigAunty

swampydrill wrote: »

Yes they are in social housing but nobody wanting to swap a house for a flat. Maybe i should just go to the council and ask them. I may buy it out of limited company funds so all would be above board for sure

Well, what is wrong with moving to a larger flat, then - nobody is entitled to a garden!? Many tenants on HB in social housing properties with spare bedrooms are looking to downsize to 1 bed properties. I've seen some of the mutual exchange scheme wish lists and they seem like total fantasies and a mismatch - everyone in a flat looking for a larger house with a garden while those in larger houses with gardens are just looking for smaller houses!

You can't ask the council on their behalf - it's nothing to do with you and all councils should operate schemes based on points and priorities - if they aren't getting a larger property its either because they are fussy and won't consider unpopular areas or unpopular types of properties or because the local council doesn't have the stock to offer over occupied tenants.

Why are you buying this property via a limited company? Ask on the housing forum if this is necessary. My understanding is that there is no advantage in having a few buy to lets via the Ltd co route and that its better for those with an extensive portfolio - but ask the experts on the housing forum. I doubt the Limited Co ownership will influence any matters relating to a contrived tenancy.