Retired parents renting their house from me and cannot afford to pay

Pixie5740

I'm not sure what Alice Walker posted is nonsense. There's this Age Concern Housing Benefit Factsheet which says:

"If you deprive yourself of capital in order to qualify for HB or to increase the amount you get, the local authority can treat you as still having that capital. This is known as notional capital."

Then there's this Shelter guide to housing benefit and local housing allowance. It has this to say about renting from family and claiming LHA:

"In some circumstances, if the family member does not live in the same property, you may be able to claim, but there are two things the council will want to check first:
1) That the tenancy is a commercial arrangement (in other words, it’s a proper tenancy, not just an informal agreement between family members)
2) that it has not been set up to take advantage of the system.
This is called a contrived tenancy. An example might be, if you
only have to pay the rent when you’re not working (and therefore eligible for benefits)."

1) definitely applies to the OP from what he has told us on this thread. Furthermore, if you have £6k of savings then you're not eligible for LHA and the OP's parents would have had a lot more than £6k in savings if they hadn't given away the equity in their home. Plus they would probably be assessed as only requiring a 1 bedroom property.

If thesaint has any sources which contradict Alice Walker it would be great if he could share them because at the moment the parents poor financial planning is going to make the OP's household worse off each month (yes he has £75k but it's in a very illiquid asset).

Edit: I was typing my post while thesaint was posting his.

paddy's_mum

I should think that if this muddle goes on for much longer, there won't be a wife in the picture in any case. T

Then OP can move in with his parents - problem solved.

mchale

OP, your parents will be able to claim HB for the property, you need to sort out your legal requirements as a LL first, then draft a TA for the rental I would suggest a rent of 10% below local market rents and then get your parents to make the claim.


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

GwylimT

mchale wrote: »

OP, your parents will be able to claim HB for the property, you need to sort out your legal requirements as a LL first, then draft a TA for the rental I would suggest a rent of 10% below local market rents and then get your parents to make the claim.

That wont work as they previously owned the property, as they also sold so below the market value it would also likely count as deprivation of an asset.

bris

This is the very definition of a contrived tenancy, housing benefit is never going to be an option here.


They should seek a private let where they will get help with the rent. it's only bricks and mortar, wake up now before it's to late.


Sit them down, explain the situation and tell them you will need to give them notice, do it properly so they can take it to the council for help.


Send them to CAB who will work out what all their benefits will be so they can find a house they can afford.

mchale

GwylimT wrote: »

That wont work as they previously owned the property, as they also sold so below the market value it would also likely count as deprivation of an asset.

Council will not ask about that.

GwylimT

mchale wrote: »

Council will not ask about that.

The HB form does, it also asks how long you have lived in the property. So if OPs parents lie on any of those they will be committing benefit fraud, which they have already done once and are now learning that the money has to be paid back.

thesaint

I bought my parents house for the value of the mortgage(substantially less than the real value), and have been renting it out to my pensioner father for several years who claims housing benefit.

People can quote what they like as to what they heard/believe. I know they are talking nonsense.

GwylimT wrote: »

The HB form does, it also asks how long you have lived in the property. .<snip>

So you decided that if they have lived in it longer than they are not entitled.
You have added 2 + 2 and coming up with 5.

GwylimT

thesaint wrote: »

I bought my parents house for the value of the mortgage(substantially less than the real value), and have been renting it out to my pensioner father for several years who claims housing benefit.

People can quote what they like as to what they heard/believe. I know they are talking nonsense.

Clearly the online version of the HB claim form and information booklet to fill it in are talking nonsense too.

GwylimT

thesaint wrote: »

I bought my parents house for the value of the mortgage(substantially less than the real value), and have been renting it out to my pensioner father for several years who claims housing benefit.

People can quote what they like as to what they heard/believe. I know they are talking nonsense.



So you decided that if they have lived in it longer than they are not entitled.
You have added 2 + 2 and coming up with 5.

The question asks how long they have lived in the property, the length of time doesn't impact on claiming HB, unless they have owned the property during any time in the last five years. Unless they lie again when claiming benefits, the correct answer to this question would mean they are unable to claim housing benefit. Their notional savings would also prevent a claim well before this question appears. Which is the same for your parents, unless they live in a property worth less than £6k at the time of sale.

I have decided nothing, I have simply read what is clearly stated on the information book which comes with the application form.