Help with Renting from Family

film_gal

Hi All,

This is my first post, so please be gentle. I own 3 bed terraced house in the village I grew up and used to rent the house to my mum when she was working, she used to pay rent etc and I live and work in London, renting a flat. However due to long term sickness and issues with depression she had to give up her job about 5 years ago which meant she couldn't pay the rent any longer and due to me not wanting to add to her woes by also making her homeless, my husband and I struggled to cover the cost of the mortgage with no rental income.

We have tried previously to apply for housing benefit to cover the rental on the property, however the council have declined it because I own the property and have been covering her rental up to now.

Unfortunately my husband has now lost his job and I am tearing my hair out about what to do. I cannot afford to cover my own rent never mind the mortgage on the property my mum lives in unless she gets some kind of benefit to cover her rent.

My mum is 70 and not in good health. What can I do?

She has applied for a council property however I fear the move will be too much for her and also the council have taken over a month and have still not even looked at her application. Even private properties will be about the same as what she was paying me in rent.

Please, can anyone help or offer advice?

pmlindyloo

The first thing to do is check that both you and your mum are receiving your benefits entitlements.

You can do this by putting details into the benefit calculator on https://www.entitledto.co.uk

Much depends on the value of the property and the equity in it.

A few suggestions:

Your mum rents privately and then would be able to receive HB if she meets the eligibility requirements.

You sell the house or rent it out privately.

I think it is unlikely that your mum will get HB based on the reasons they have already given. So, if you are concerned that a move will be detrimental then the only alternative I can think of so your mum can remain in the house is for her to take in lodger(s). Is this a possibility.

If you sold the house could your mum move in with you or could you build an extension with any money you get from the sale?

BlueEyedGirl

I am going back many years so apologies if I am wrong. When I wanted to rent my parents old home which I did for a short time when working, I lost my job and one of the reasons I could not get HB was because my parents did not give me a proper 'tenancy agreement' and they were not declaring the rental income for tax purposes. I recall a friend once moving into their son-in-laws home (which they bought solely to rent out to their mother-in-law) having no problems claiming HB because they had a proper tenancy agreement and declared the income to the tax authorities.

tomtontom

BlueEyedGirl wrote: »

I am going back many years so apologies if I am wrong. When I wanted to rent my parents old home which I did for a short time when working, I lost my job and one of the reasons I could not get HB was because my parents did not give me a proper 'tenancy agreement' and they were not declaring the rental income for tax purposes. I recall a friend once moving into their son-in-laws home (which they bought solely to rent out to their mother-in-law) having no problems claiming HB because they had a proper tenancy agreement and declared the income to the tax authorities.

A tenancy agreement can be evidence of a commercial arrangement, but is unlikely to make any difference after years of paying no rent. In fact the sudden production of such a document would strongly point to a contrived tenancy.

bloolagoon

You should have evicted your mum the second she failed to pay rent. That's what commercial tenancies are yours is not commercial that's why you let her stay therefore she cannot claim HB.

film_gal

Thanks guys. Unfortunately the property is £15,000 in negative equity so I couldn't sell it even if I wanted to. I looked at this as an option first off.

The only other thing is looking on the open market, knowing that council properties are few and far between, even one bedroom properties are a good £100-200 per month more than her housing benefit would be.

If I try and find her somewhere privately how do I make up the shortfall in the rent and can you secure housing benefit without having the property yet? Does that make sense? Do you apply for the property before getting housing benefit or do you apply for housing benefit and then try and find a property. I have no hope of finding her somewhere as I mentioned the rent on (not particularly nice) properties exceeds her allowance.

Her housing benefit 'would' be £103.02 per week (£446 p/c/m) and most one bedroom properties are £550-650 per month.

Any advice?

film_gal

I agree booting her out would have been the most sensible option but evicting a suicidal pensioner is not in my nature sadly.

bloolagoon

film_gal wrote: »

I agree booting her out would have been the most sensible option but evicting a suicidal pensioner is not in my nature sadly.

Problem is - and there is no way I would have booted my own mother out either, is that by not doing so you made it impossible to claim HB. You would have booted out my mother if she was your tenant. you would never have allowed a tenant to stay rent free if you only relationship was landlord/tenant.

The best thing to do is help her move to either rented or council and sell or rent to a paying tenant.

rogerblack

film_gal wrote: »

Thanks guys. Unfortunately the property is £15,000 in negative equity so I couldn't sell it even if I wanted to. I looked at this as an option first off.

You could in principle rent out the existing property, and use the rent to cover the shortfall in the HB at another property.

If it is in negative equity however - does your lender know you are actually not living in it?

I would wonder what the legal position would be if you were to transfer the ownership over to her - if this would be possible and then support for mortgage interest might be payable.

(I have no idea if this is or isn't possible or not.)
I suspect at the least it would be difficult from the mortgage providers POV.

Many of the other options that might be possible are closed down due to the negative equity.

bloolagoon

film_gal wrote: »

Thanks guys. Unfortunately the property is £15,000 in negative equity so I couldn't sell it even if I wanted to. I looked at this as an option first off.

The only other thing is looking on the open market, knowing that council properties are few and far between, even one bedroom properties are a good £100-200 per month more than her housing benefit would be.

If I try and find her somewhere privately how do I make up the shortfall in the rent and can you secure housing benefit without having the property yet? Does that make sense? Do you apply for the property before getting housing benefit or do you apply for housing benefit and then try and find a property. I have no hope of finding her somewhere as I mentioned the rent on (not particularly nice) properties exceeds her allowance.

Her housing benefit 'would' be £103.02 per week (£446 p/c/m) and most one bedroom properties are £550-650 per month.

Any advice?[/QUOT

Look on your mums area for CBL - see what bids have been recently, the banding and see if any are suitable and apply.

Given her age and health council properties are best for her for security.

Until the council see her as homeless she's not a priority. There may be sheltered accommodation going now so register and look, then sadly send her a the letter with notice to quit.

Mojisola

film_gal wrote: »

My mum is 70 and not in good health. What can I do?

Is she getting all the benefits that she's entitled to? If so, she should be able to contribute something towards the mortgage.