Lodger - council say new tenancy agreement needed

timbstoke

I've recently moved into a friends spare room. I work full time, she's unemployed. She discussed the situation with the housing benefit people before I moved in, who said that as long as my share of the rent goes directly to the landlord rather than through her, it won't be counted as income for the purposes of her benefits, and all they need is a letter from the landlord confirming the situation, which she asked for.

At the same time as I moved in, the landlord has increased her rent by £20/month, and they confirmed this in the same letter where they confirmed that I was moving in. Because of this, the council have said that we need to set up a new tenancy agreement in both our names.

We are both very much against doing this - the landlords agent wants £120 to draw up a new tenancy agreement, and besides which, we don't want to be financially linked as joint tenants, because that's not the situation. The landlord is quite happy with the current tenancy agreement as long as he gets his rent, so I don't see how the names on the tenancy agreement has any bearing on the housing benefit situation.

Can anyone offer any advice about how we can sort this to the council's satisfaction?

coffeelover65

They need a new tenancy agreement because at present you have no rental liability, only your friend does. Without this you are a non-dependent adult, and your income will be taken into account when calculation her HB and Council Tax Support (if she claims this). Depending on your earnings, she could lose upto £87.75 of her Housing Benefit dependent upon your gross wages should you not provide proof that you are now equal joint tenants.

If I was dealing with your claim I would give you 1 month from moving in to provide a joint tenancy agreement and if not provided I would add you as a non-dependent to her claim taking the maximum deductions allowed under the regulations.

fluffymovie

I would not agree that the OP is a Non Dep as a Non Dep is someone living with a customer on a non commercial basis. If the customer has to pay rent to live there, then they are a sub tenant of the original tenant.

A joint tenant would be liable for part of the Ctax but if you are the claimant's sub tenant, this would not be the case.

I would suggest that you explain that you are a sub tenant but that rent is paid directly to the landlord and see what they say.

timbstoke

coffeelover65 wrote: »

They need a new tenancy agreement because at present you have no rental liability, only your friend does. Without this you are a non-dependent adult, and your income will be taken into account when calculation her HB and Council Tax Support (if she claims this). Depending on your earnings, she could lose upto £87.75 of her Housing Benefit dependent upon your gross wages should you not provide proof that you are now equal joint tenants.

If I was dealing with your claim I would give you 1 month from moving in to provide a joint tenancy agreement and if not provided I would add you as a non-dependent to her claim taking the maximum deductions allowed under the regulations.

Thanks coffeelover. Is that £87.75 per week, fortnight or month? To be honest, if its per month then that situation suits us fine, since it would take us to more or less where we want to be in the first place. She does claim CTB, but that's already sorted - the revised bill has been received and paid in full for the year.

coffeelover65

£87.75/wk, the exact figure depends on your gross income, following link has exact rates for HB, if your friend claims council tax support there would be a deduction their too but I couldn't see this info on the Stoke Council website.

http://www.york.gov.uk/info/200642/welfare_benefit_changes/721/welfare_benefit_changes/3

Re what fluffymovie has said about you been a subtenant, this could apply if you have a real commercial arrangement in place with your friend to the extent that if for example you didn't pay rent she would evict you. Subtenants are not common, most people are either a non dependents, just rent a room in a house, or share a house.

There will be a deduction to your friends benefits too if you declare yourself as a sub-tenant. If your friend charged you say £50 a week, the first £20 is disregarded, and then the remaining amount would be treated as unearned income which she would need to declare to the DWP which could reduce the JSA she receives by the same amount - the effect on HB is dependent upon what the DWP do with her JSA.

Have a play with the Stoke benefits calculator and try different scenarios

timbstoke

Thanks again coffeelover. We've avoided the subtenancy approach precisely because of the impact on her benefits, which is also partly the reason we wanted to avoid a joint tenancy - we don't want to create a financial link between us which may affect her benefits.

She was initially told that all she would need is a letter from the landlord outlining the changes to the tenancy, and that would be fine. This has been the case with everyone she's spoken to for the last month when she's been trying to sort everything before I move in. Now I'm there, suddenly a letter from the landlord is no longer good enough. It's very frustrating given that the end result we're looking for is for the council to pay less CTB and HB!

I'm on holiday next week so we're both going to go down together and sort it out one way or another.

Caz3121

post 12 and 14 in this similar themed thread may help understand what info is used
https://forums.moneysavingexpert.com/discussion/4623361