Renting to daughter can she claim housing benefit

Grumpysally

My partner is planning to buy a house to rent. My daughter also needs a place to live. She is living with us at the moment.

She is currently living with us and on job seekers, though will soon be starting to work as a casual staff member with a local care home.

I know she can only get housing benefit for a room in a shared house as she's under thirty five.

Would she still be able to do this if the landlord was my partner? We were thinking of buying a two bedroomed house and having two tenants anyway.

The house would be in his name, owned outright by him. ( he's selling an inherited property )

This is what it says on our local council website;

You may not qualify if:

- you live with a member of your immediate family and pay them rent or board.
-we suspect you have created an arrangement to take advantage of the scheme.

We are not planning on taking advantage of the scheme except in so far as she needs somewhere to live, we need tenants. Her terms would be the same as any other tenant we had. ( the only difference would be she wouldn't pay a deposit, I would have to provide that for her anyway if she was renting elsewhere)


Thanks

browneyedbazzi

As she currently lives with you rent free, and would move into the partner's house in order to claim benefit which would be paid to your partner, that sounds an awful lot like taking advantage to me and I suspect it would to the council as well.

BitterAndTwisted

The council could decide that it's a "contrived tenancy" if it's easy to discover that the property-owner is connected to her by being your partner. As she currently shares a home with you both I suspect that's not going to be terribly difficult.

tom9980

http://www.landlordzone.co.uk/forums/showthread.php?34022-Renting-to-a-relative-contrived-tenancy&p=273258#post273258

this may help, nobody here can answer your question only the decision maker will on application. If you can i would avoid renting to your daughter it will only cause stress for you all.

somethingcorporate

As per the above posts it looks from the outside highly suspicious given she'd be going from free rent to rent being paid by HB.

BigAunty

Google the term 'contrived tenancy' to understand why the council may undertake a closer scrutiny of the tenancy in order to check that it hasn't been set up to deliberately to exploit the housing benefit system.

I doubt the fact that she is currently rent free has any bearing on a decision made at a new property where she is charged rent from the outset. Yes, it is considered an abuse if, for example, if a closely related landlord doesn't charge rent when their family member/tenant is in employment but does when they are on benefits - the Shelter website cites this as a probable reason for a HB claim to be rejected.

I cannot see why the status of a previous tenancy has a bearing on a new one in a new property. However, you could PM the poster called 'Housing Benefit Officer' or post on the benefits forum to get their attention as they are experts on the matter.

Grumpysally

Thank you to those of you who have left constructive advice so quickly.

To others, please could you point out where I have said she lives rent free?

Why do some people always assume that there is a scam? Or have I just badly worded the question? I can see how some people would try but this is a genuine request for advice, not judgment.

If she is in a position where she does not need to claim HB she will pay full rent. If her income level entitles her to claim it she would be claiming it whoever her landlord is.
We hope she gets a job that pays enough for full rent wherever she ends up living.

As I said we are buying a house to rent anyway so letting a room to her would be convenient all round.

We live in a semi rural area with inconsistent public transport so she needs somewhere more town centred which is where we are looking to buy anyway as there is a university and hospital in the town so potentially a good rental catchment.
I will look on the landlord zone site and the benefits forum. Should have thought of that one first, thank you Big Aunty.

RAS

Alison

The essential are going to be that you know what the Local Housing Allowance for your area is for a single person in shared accomodation and that you can make the rental viable on double that amount for a two room property.

The other thing that the Council may well look at is whether the two tenants are paying the same amount of rent.

If she is under 25, then she really needs to think very very hard about the financial situation; trying to live independently on the under 25 rate for benefits is really hard. Even more so if you are sharing utilities with someone who can afford to turn the heat up.

And you will need to issue a S8 notice if she is in arrears by 2 rent payments and you want this to not be considered contrived; even if the reason is the HB department's slow processing.

silvercar

To others, please could you point out where I have said she lives rent free?

Rent paid to relatives that you share a home with is board rather than rent. She never would be eligible for housing benefit whilst living in your home with you. So moving her into another property would be seen as contrived.

Grumpysally

silvercar wrote: »

Rent paid to relatives that you share a home with is board rather than rent. She never would be eligible for housing benefit whilst living in your home with you. So moving her into another property would be seen as contrived.

Yes you are right, board not rent. I'd got confused there.
Thank you.

Grumpysally

Well it does seem not to be a viable option. Or at least too complicated to go through the rigmarole. Especially as her wage will be erratic with the potential to be eligible one week but not the next.
At least if she's renting elsewhere I can help her out if any benefits due are late, rather than having to evict her.
My partner would prefer her not to be living with us.