HB - Moving to a shared accom

Zudecke_2

Hi,

A close friend who is currently renting a private studio flat (with HB) has secured new accommodation in a friend's spare room as the landlord has chosen not to renew the lease (they're converting the property).

He currently has the full LHA allocation (or whatever it's now called) but he is wondering how it will be affected should he move into his friend's spare room?

What would the LA / Council require in order to base their assessment and any other advice on how this works?

Many thanks and much appreciated (as always),

Z

Caz3121

Is he over 35 and currently receiving the one-bedroom rate? If so then it will reduce to the shred accommodation rate.
Will he have a lease/lodgers agreement that he can take to council? (to prove he has a liability to pay rent)
LHA would cover the shared rate or the actual rent whichever is lower

Zudecke_2

Hiya - yes he is over 35. Funnily enough the rate for the shared is actually roughly the same amount as the rent fee for the entire property.

Would the LA essentially award the whole lot even if it covers the tenant's whole rent fee?

pmlindyloo

Zudecke wrote: »

Hiya - yes he is over 35. Funnily enough the rate for the shared is actually roughly the same amount as the rent fee for the entire property.

Would the LA essentially award the whole lot even if it covers the tenant's whole rent fee?

Not sure what you mean by 'whole rent fee'.

Has your friend got a lodger's agreement? Does this stipulate what the rent includes? Utilities, council tax etc etc are not allowable costs for calculating Housing Benefit. I believe councils use their own figures for amounts to be deducted for water/electricity/gas etc if the agreement does not specify these.

Alternatively, if there is no formal agreement then the landlord would need to write a letter saying that he is their lodger and has been granted a licence to occupy (I think they are the right words - can anyone confirm?) and the rent is £** per week.

The landlord needs to be careful about using the LHA rate for shared accommodation as the rent (if they have to differentiate between the amount of rent versus utilities etc included in the current rent they are being paid) as this may be considered 'contrived' in order to obtain maximum HB.

So,
Does he have a written agreement?
Does it specify what the 'rent' includes?
What rent is he paying?
What is the Shared Accommodation rate?

Zudecke_2

Thanks for the great response!

To rephrase my earlier question which I can now see wasn't the clearest. Is there a compelling argument that an LA could make against a landlord setting the rental amount for the lodger at or above the LHA shared accommodation cap?

Many thanks in advance!

marliepanda

Zudecke wrote: »

Thanks for the great response!

To rephrase my earlier question which I can now see wasn't the clearest. Is there a compelling argument that an LA could make against a landlord setting the rental amount for the lodger at or above the LHA shared accommodation cap?

Many thanks in advance!

The landlord can charge what they want.

The LA just won’t pay it. So if the shared rate is £50 and the landlord charges £70 tenant has to find £20 from somewhere.

Are you saying that the whole house rent is less than the shared accommodation rent? I suppose some small houses or houses in less desirable areas will have rents as low as that.

If they are falsifying the rent to get the benefits to pay for more than just the claimant then that is fraud.

Zudecke_2

No I'm saying the other way around - the house rent is MORE than the max LHA allowance. So the LL would likely set a rent at the max LHA and I was wondering if that would be a problem.

But you basically answered that in the first half of your post. Sorry, I'm really not explaining myself very well.

Really grateful for your responses

marliepanda

LHA is usually set at the lowest third of the rent on the are, so yes many rents will be above it.

Ames

There shouldn't be a problem if they set the rent at the LHA shared room rate. If they were renting the room out for a lot less before he moved in, for instance, then it would look suss, but if it's the first time they've let the room then using LHA and looking to see what other rooms are being let for is just doing research into the market.

Zudecke_2

Thank you so much all!