Rent from family and on partial housing benefit - considering purchasing share

Poppie68

It very could be a contrived tenancy, you obviously purposely neglected to inform HB your landlord is a family member which could lead to a fraud investigation and end up with a criminal record and have to pay back the HB. They will eventually find out so better you tell them first.

Poppie68

snowdown wrote: »

Yes I know about such things. However a contrived tenancy would take advantage of the housing benefit system by claiming excessive rent. As our rent is considerably less than other private rentals in the street this is not the case. Were we to have notified HB in the first place that we were renting from family I am confident it wouldn't have been problem due to the low rent. The only way it is an issue is when excessive rent is charged. I do wish we had been upfront with them in the first place but there is little we can do about that now.

You really need to look up and understand contrived tenancys. Paying lower than market rate is a sure way of seeing you and your family member being investigated.

stokesley

Helvetica_Van_Buren wrote: »

No.



You had a roof over your head.

Presumably a maintained one, to boot:)

FBaby

Your aunt is treating you differently than she would a tenant she didn't know, therefore it is contrived from the perspective of claiming HB.

Kynthia

HappyMJ wrote: »

It doesn't matter what the rent is. If you're gaining a beneficial interest in the property by paying rent to a family member then you can't claim HB.

There are lots of people renting from family who are allowed to claim housing benefit. It's fine as long as it's not a tenancy contrived to take advantage of the benefits system. Either way you can't claim a beneficial interest in a property you rent no matter who owns it.

I don't think the rent being lower than similar properties is enough to say it's not being let on a commercial basis. Shelter say that it must be a commercial basis and not an informal arrangement so a proper tenancy agreement would count towards this. Being able to evidence regular rent payments that are more that the HB amounts would also show that it was commercial and not a free property used to get HB while they are eligible. It would also be strong evidence if the owner had previously let that property to other tenants whereas buying that property just to let to the family members would count against them.

HappyMJ

Kynthia wrote: »

There are lots of people renting from family who are allowed to claim housing benefit. It's fine as long as it's not a tenancy contrived to take advantage of the benefits system. Either way you can't claim a beneficial interest in a property you rent no matter who owns it.

OP is buying the property at a significant discount therefore gaining a beneficial interest. OP is having the taxpayer effectively pay the mortgage of a property including the capital element to which he/she will get transferred into his own name at some point at the future. If the OP owned this property in their own name they wouldn't get anything and if they were unemployed the DWP would only pay the interest charged on the mortgage. HB pays not only the interest but a small portion of the capital of the LL's mortgage and covers all repairs and maintenance.

The OP has admitted in the post at 2.13PM that they carry out all repairs and maintenance on the property which is something a landlord would normally do.

I would put money on the amount paid by the OP in rent to the aunt is not being declared to HMRC.

The post at 2.32PM even states the aunt does not hold a Gas Safety Certificate which implies to me the aunt doesn't care about the property and her legal obligations which really makes me think the HMRC does not know about the property. The aunt would be entering the invoice for the GSC into their records and putting that to the HMRC. If she isn't getting a certificate she won't have an invoice and then not declaring she's spent any money on one it's quite clear the aunt has bought the property in her name to get HB to pay it off for the OP.

xylophone

Perhaps auntie would agree to be your mortgagee....

She sells you the house against a charge and loan on the property ... of course you would not be able to claim housing benefit.

NYM

Is is allowable to rent from family, but clearly the Local Authority need to be informed of it so they can make the necessary additional checks.
The agreement would need to be enforceable in law in order to show that it was a commercial agreement.
The Mortgage provider also needs to be aware that the property is being let to family.
The 'Landlord' also needs to meet their legal obligations regarding Gas Safety Certification and repairs/maintenance
HMRC need to be advised of income from the tenancy.

All in all, this 'tenancy' sounds as if it's on dodgy grounds.

HappyMJ has said it so much better...:rotfl:

Kynthia

HappyMJ wrote: »

OP is buying the property at a significant discount therefore gaining a beneficial interest. OP is having the taxpayer effectively pay the mortgage of a property including the capital element to which he/she will get transferred into his own name at some point at the future. If the OP owned this property in their own name they wouldn't get anything and if they were unemployed the DWP would only pay the interest charged on the mortgage. HB pays not only the interest but a small portion of the capital of the LL's mortgage and covers all repairs and maintenance.

The OP has admitted in the post at 2.13PM that they carry out all repairs and maintenance on the property which is something a landlord would normally do.

I would put money on the amount paid by the OP in rent to the aunt is not being declared to HMRC.

The post at 2.32PM even states the aunt does not hold a Gas Safety Certificate which implies to me the aunt doesn't care about the property and her legal obligations which really makes me think the HMRC does not know about the property. The aunt would be entering the invoice for the GSC into their records and putting that to the HMRC. If she isn't getting a certificate she won't have an invoice and then not declaring she's spent any money on one it's quite clear the aunt has bought the property in her name to get HB to pay it off for the OP.

Your post I quoted said nothing about buying or owning the property in order to gain a beneficial interest it said that renting to family would gain a beneficial interest and that's what I disagreed with because it's not the case. The OP has no chance of buying half the property and claiming HB on the rest so that seems a mute point and I don't believe they mentioned buying it at a discount but I could be wrong.

My point was that a lower rent alone isn't enough to say whether the tenancy is commercial and that many factors are looked at. The fact there is no gas safety cert is definitely a sign that the landlord isn't treating this let as commercial. The repair and maintenance would depend on what type of things the OP means as they do also say that if it's major the landlord pays. So what is or isn't major and could the non-major stuff come under acting in a 'tenant - like' manner? The council would look into all of this before making a decision.

marksoton

It's Friday evening, i can't even be bothered to tear this obvious !!!!! apart.

If it's reality i hope they get everything they deserve.