Renting to family and housing benefit

ThumbsUpBoy

Someone sent me a private message informing that you actually can rent from a family member as long as tenancy agreement is in place.


So that's clarified.

elsien

Fact or speculation? If it's for the sole purpose of fraud, someone's being very silly in telling it to the world and his wife.
Renting to family can be done in some circumstances.
If it worries you enough to report it then do so. Otherwise let it go.

specialboy

As above, if you think fraud is being committed then you should report it and let the authorities decide.

BigAunty

Yes, its possible for a tenant to claim housing benefit when renting from a close family member as long as they don't live in the same property and it's not a 'contrived tenancy', set up to take advantage of HB. The Shelter website has basic info on this.

It is recommended that the parties have a tenancy agreement in order for it to fulfill its commercial requirement but there's a bit more to the rules than just having an AST in place.

Google 'contrived tenancy' to understand what the council expect and why they place these arrangements under greater scrutiny.

New_User

BigAunty wrote: »

Yes, its possible for a tenant to claim housing benefit when renting from a close family member as long as they don't live in the same property and it's not a 'contrived tenancy', set up to take advantage of HB. The Shelter website has basic info on this.

It is recommended that the parties have a tenancy agreement in order for it to fulfill its commercial requirement but there's a bit more to the rules than just having an AST in place.

Google 'contrived tenancy' to understand what the council expect and why they place these arrangements under greater scrutiny.

Is there such a thing as a ''contrived tenancy'' - where the tenant is NOT on LHA (ie paying rent purely out of wages etc)..?


ie could I buy a house specifically to let to someone, or would that be illegal?

BigAunty

New_User wrote: »

Is there such a thing as a ''contrived tenancy'' - where the tenant is NOT on LHA (ie paying rent purely out of wages etc)..?


ie could I buy a house specifically to let to someone, or would that be illegal?

An example of a contrived tenancy is where, for example, the tenant pays rent to their close family member who is their landlord when they are on benefits but don't when they are working, for example. Investigations by local councils are done on a case by case basis, there's no easy guidance on this.

Contrived tenancy is a term that applies to HB claiming tenants (and where tenant/landlord is related, I believe), it applies specifically to the abuse of benefits and is used by the council and DWP as a term.

People are free to purchase properties to let out to anyone they wish, including relatives who pay them rent. If there is no HB involved, there is no possibility of it being judged as contrived. A landlord, whether or not they are related to their tenants, have the usual housing and taxation laws to follow and their tenants, even if close family members, will have the same rights as any other tenant with the same type of tenancy.

There is a poster called Housing Benefit Officer on the benefits forum that could answer a specific question like yours.

AFAIK, what the council want to see is that it is a commercially operated tenancy, one where the tenant would be evicted if they didn't pay despite being a family member.

As I said previously, google the term and see if you can find proper guidance on it (one aimed at landlords and tenants, perhaps from a council or housing organisation rather than from amateur posters on a forum like this).

Kynthia

I personally know someone who is renting from their parent. It was fully disclosed up front and deemed not to be contrived for a couple of reasons.


Try reading this link to see that it's perfectly possible to rent from a relative while on LHA:
http://www.tenantstips.com/Home/Housing-Benefit/Claiming-Housing-Benefit/Housing-Benefit-Entitlement-in-Relative-s-Property#.VCFZH8J0zIU