Pensioner Housing Benifit When renting from child

G_M

Pensioner Housing Benifit When renting from child

Children cannot let out property or sign legal contracts.

Pixie5740

JSH333 wrote: »

1. Ive worked all my calculations on it being a BTL mortgage anyway so thats fine.

It's not a BTL mortgage you need though, it's a regulated BTL mortgage. If you haven't already spoken with a mortgage broker you should.

JSH333 wrote: »

2. This is the area I was wondering, what constitutes a contrived tenancy?

As housing benefit is paid by the local council you'd need to check with them.

JSH333 wrote: »

3. the simple reason is I want my own space. she could rent from a non-relative but given her income she would only be able to afford a dive as she has no investments or private pension, she gets state pension and pension credit only.

Understandable that you want your own space. However, beggars can't be choosers so if your mother can't live with you and if the council won't pay out HB for a property you own then she'll just need to cut her cloth accordingly.

BigAunty

The definition of a contrived tenancy is one that has been set up to take advantage of the HB system. It's considered on a case by case basis, there's no set rules. One often cited example, is when a tenant doesn't pay rent when they are working but does when they claim HB, which won't apply in your case.

There is a poster called Housing Benefit Officer on the benefit forum who can confirm the best way to set up your tenancy to gain consent for HB from the local council. For example, it should be commercially run, and this generally means that a tenancy agreement must be in place and the landlord would evict the tenant if they get into arrears.

Pop over to the benefits forum.

I can't see any reason why your proposal shouldn't succeed. There's general hostility to the concept of landlords personally gaining via the benefits system by letting out their properties to their relatives but this doesn't mean it's not legal and legitimate...

pmlindyloo

In order for it not to be a contrived tenancy you would need to set up a proper tenancy agreement and fulfil all your obligations as a landlord including evicting your mother if she broke the contract. It might help if you use a letting agent so a proper commercial tenancy agreement was put in place.

The onus is on the council to prove that the tenancy has been set up to obtain housing benefit.

It is easier to prove that it is not a contrived tenancy if you have previously let out the property and then rent it to your mum.

Some councils appear to have a very strict policy about this and automatically say 'no'. However, such a decision can be appealed.

As regards the rent, you can set it up as being the same as the one bedroomed housing allowance for your area. If it is less than this your mum would only receive the rent and not the full housing allowance.

As your mum is on Guarantee Pension Credit she would be entitled to the full local housing allowance for your area with the above proviso.

Posters get very miffed about this scenario that you are proposing but personally I see this as no different to some other landlord getting public money to pay their mortgage.

I understand your desire to find your mum somewhere nice where she would not be subject to being moved every 6 months or so.

Speak to your local council.

The more difficult aspect is getting a regulated buy to let mortgage.

JSH333

Grumpelstiltskin wrote: »

Ok so your mother would need housing benefit?


So you would need the money your mother pays as rent to cover the mortgage?


So eventually you will have a property that has been fully paid for by the taxpayer?


Nice one.


Sorry if I have got this wrong but it looks like this to me.

I fail to see how this differs from any land lord who lets to tenants on benefits? She would get this if she rented elsewhere anyway and hence go to that landlord?

JSH333

G_M wrote: »

Children cannot let out property or sign legal contracts.

Sorry for the confusion, I only mentioned that as shes my Mum, I'm 27

JSH333

Pixie5740 wrote: »

It's not a BTL mortgage you need though, it's a regulated BTL mortgage. If you haven't already spoken with a mortgage broker you should.



As housing benefit is paid by the local council you'd need to check with them.



Understandable that you want your own space. However, beggars can't be choosers so if your mother can't live with you and if the council won't pay out HB for a property you own then she'll just need to cut her cloth accordingly.

I'll look into regulated BTL, thanks for that.

Most of this will need confirming with the council it seems

And yes, if it comes to that, then that's life I guess

Grumpelstiltskin

JSH333 wrote: »

I fail to see how this differs from any land lord who lets to tenants on benefits? She would get this if she rented elsewhere anyway and hence go to that landlord?

So if something happened to your mother you would be quite happy to rent to any other benefit claimant?


Don't forget as you will need to prove it is a 'commercial' tenancy you will need to act as a 'proper' landlord gas safety certificate etc. etc. and report earnings to HM tax man.


I think you need to check out your responsibilities as a landlord.

JSH333

Grumpelstiltskin wrote: »

So if something happened to your mother you would be quite happy to rent to any other benefit claimant?


Don't forget as you will need to prove it is a 'commercial' tenancy you will need to act as a 'proper' landlord gas safety certificate etc. etc. and report earnings to HM tax man.


I think you need to check out your responsibilities as a landlord.

If something happened to my mum I would advertise to the general market. I wouldn't want to pay for a mortgage with no return.

I would of course for fill all responsibility's required of me as a landlord, I of course want to do this completely legally.

Rambosmum

The housing benefit office may consider this a 'contrived tenancy' e.g. not a tenancy agreement made in your interest to get money off the council rather than your mother having a genuine reason to need to live in it. Unfortunately you won't know whether they will or not until you apply though!