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

Red_Spider

NYM wrote: »

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:

True.
But is aunt considered family in the HB rules?
I thought aunt / uncle / cousin was ok, but siblings, parents, grandparents and "partners" / "ex-partners" was too close and so (often) not allowed...

I may be wrong though...

csgohan4

Red_Spider wrote: »

True.
But is aunt considered family in the HB rules?
I thought aunt / uncle / cousin was ok, but siblings, parents, grandparents and "partners" / "ex-partners" was too close and so (often) not allowed...

I may be wrong though...

Or we can stop speculating and see the rules: http://england.shelter.org.uk/get_advice/housing_benefit_and_local_housing_allowance/what_is_housing_benefit/housing_benefit_if_renting_from_a_family_member

HappyMJ

csgohan4 wrote: »

Or we can stop speculating and see the rules: http://england.shelter.org.uk/get_advice/housing_benefit_and_local_housing_allowance/what_is_housing_benefit/housing_benefit_if_renting_from_a_family_member

That's Shelter's opinion of the rules.

Shelter aren't always correct. The tenancy for instance must be on commercial terms.

Link http://www.legislation.gov.uk/uksi/2006/213/contents/made

You would need to look at Section 9 Subsection 1A of the The Housing Benefit Regulations 2006

Circumstances in which a person is to be treated as not liable to make payments in respect of a dwelling
- A person who is liable to make payments in respect of a dwelling shall be treated as if he were not so liable where–
- the tenancy or other agreement pursuant to which he occupies the dwelling is not on a commercial basis;

And that can be shown by the fact the landlord has not obtained a gas safety certificate and requires the occupier to undertake repairs and maintenance which is not on a commercial basis.

You would then need to look at Subsection 2 to help prove this

In determining whether a tenancy or other agreement pursuant to which a person occupies a dwelling is not on a commercial basis regard shall be had inter alia to whether the terms upon which the person occupies the dwelling include terms which are not enforceable at law.

The term not enforceable at law is transferring the responsibility of the gas safety certificate onto the tenant.

Red_Spider

csgohan4 wrote: »

Or we can stop speculating and see the rules: http://england.shelter.org.uk/get_advice/housing_benefit_and_local_housing_allowance/what_is_housing_benefit/housing_benefit_if_renting_from_a_family_member

I looked at that link and it does not list aunt / uncle - niece / nephew as being "close family".

Red_Spider

HappyMJ wrote: »

That's Shelter's opinion of the rules.

Shelter aren't always correct. The tenancy for instance must be on commercial terms.

Link http://www.legislation.gov.uk/uksi/2006/213/contents/made

You would need to look at Section 9 Subsection 1A of the The Housing Benefit Regulations 2006

Circumstances in which a person is to be treated as not liable to make payments in respect of a dwelling
- A person who is liable to make payments in respect of a dwelling shall be treated as if he were not so liable where–
- the tenancy or other agreement pursuant to which he occupies the dwelling is not on a commercial basis;

And that can be shown by the fact the landlord has not obtained a gas safety certificate and requires the occupier to undertake repairs and maintenance which is not on a commercial basis.

You would then need to look at Subsection 2 to help prove this

In determining whether a tenancy or other agreement pursuant to which a person occupies a dwelling is not on a commercial basis regard shall be had inter alia to whether the terms upon which the person occupies the dwelling include terms which are not enforceable at law.

The term not enforceable at law is transferring the responsibility of the gas safety certificate onto the tenant.

There's a lot of waffle in that legislation link.
It doesn't seem to define which family members are eligible.

HappyMJ

Red_Spider wrote: »

There's a lot of waffle in that legislation link.
It doesn't seem to define which family members are eligible.

That's why every organization translates it differently. It's a lot of waffle. It's not the closeness of the family member it's because it's not a tenancy on commercial terms.

You can rent a property from your mother and/or father on commercial terms. You can even rent a property from your ex-partner (as long as your partner and the claimant have never lived in it together). To be on commercial terms they must carry out gas safety certificates and they arrange for and pay for all repairs to the property. They must also be more than willing to evict the son/daughter if they do not pay the rent. Very few parents would actually carry through with that threat.

Red_Spider

HappyMJ wrote: »

That's why every organization translates it differently. It's a lot of waffle. It's not the closeness of the family member it's because it's not a tenancy on commercial terms.

You can rent a property from your mother and/or father on commercial terms. You can even rent a property from your ex-partner (as long as your partner and the claimant have never lived in it together). To be on commercial terms they must carry out gas safety certificates and they arrange for and pay for all repairs to the property. They must also be more than willing to evict the son/daughter if they do not pay the rent. Very few parents would actually carry through with that threat.

True.

But my understanding was that the issue of "contrived" v "commercial" tenancy only arose in the event of a "close" family link existing between landlord and tenant.

I suppose a "contrived" tenancy could exist between unrelated individuals, but I never see this mentioned...

FutureGirl

I think the issue people are having is that you intended to be a benefit cheat.

You clearly stated in your post that you didn't think you would get HB whilst renting from a family member, which is the reason you didn't tell the council that fact, as it would stop you getting HB.

fed_up_and_stressed

My comment to the op is as they are so adament they are "entitled" why not go into the council office tomorrow and tell them the truth about your accomodation ?

Red_Spider

fed_up_and_stressed wrote: »

My comment to the op is as they are so adament they are "entitled" why not go into the council office tomorrow and tell them the truth about your accomodation ?

Aunt is not classed as ''close family'' (for HB/LHA purposes).
The aunt has been accepting below market rent.

It seems to me that the OP (and her aunt/LL) have actually been dishonest (and potentially created a ''contrived'' tenancy) when in fact there was no need.

They could have set this up, being completely honest and above board and probably gained just as much HB/LHA.
Obviously the LL/aunt would have needed to account for the money, register the deposit, gas safety, etc. These are still required if renting to family. But she could have claimed all this against her rental income, to reduce tax.

Either there's more to this, or the OP and aunt have put themselves at risk of prosecution (for a number of offences) for very little - if any - financial gain...