Housing Benefit - Management Fee

sangie595

I would share the concern about this arrangement. Buying a bedroom seems fraught with pitfalls, and I am wondering if you have taken any proper legal advice. I am finding it difficult to believe a lawyer would advise tying money up in this type of arrangement. In all honesty, it sounds rather like some sort of scam! If you can't pay the various charges, and likely won't find HB paying them if they are things like cleaning and fuel, which are things everyone needs to pay for, will you get kicked out? Can they seize the "property" for non- payment, leaving you with nothing?

What is wrong with renting? Plenty of people with disabilities successfully rent, and once your capital is reduced, you will get benefits just like everyone else.

I would seriously suggest very good legal advice before going through with this purchase.

BristolMan

Afraid_of_Kittens wrote: »

Management fees are not eligible for Housing Benefit.

You will own the property. You will not be renting it.

You have no eligible rent for Housing Benefit purposes.

You appear not to be in a shared ownership scheme (where you part own and part rent)

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/236953/hbgm-a4-eligible-rent.pdf

Owner-occupiers
4.280 All payments made by owner-occupiers, whether the claimant or the partner of the claimant,
do not qualify for HB, for example
SSCBA Section 130; HB Reg 2, 12, & (SPC) 2, 12
!!!8226; mortgage payments
!!!8226; service charge payments (unless the person occupies the dwelling under a shared
ownership scheme)
!!!8226; any other payments made for the owner-occupier!!!8217;s home, such as subscriptions to estate
management associations (unless the person occupies the dwelling under a shared
ownership scheme)
Help with these payments may be given through IS, JSA(IB), ESA(IR) or Pension Credit.

Ah





Well - that seems fairly conclusive.



It's only £250 per annum, but I am paying "ground rent". It's a shame that's not considered rent.



Ah well.

Afraid_of_Kittens

BristolMan wrote: »

Ah





Well - that seems fairly conclusive.



It's only £250 per annum, but I am paying "ground rent". It's a shame that's not considered rent.



Ah well.

If you owned and lived in a houseboat you can claim Housing Benefit to pay for the mooring fees.

If you owned a caravan you can claim Housing Benefit fr the pitch fees.

But if you own a flat you can't claim for the management fees or ground rent.

BristolMan

sangie595 wrote: »

I would share the concern about this arrangement. Buying a bedroom seems fraught with pitfalls, and I am wondering if you have taken any proper legal advice. I am finding it difficult to believe a lawyer would advise tying money up in this type of arrangement. In all honesty, it sounds rather like some sort of scam! If you can't pay the various charges, and likely won't find HB paying them if they are things like cleaning and fuel, which are things everyone needs to pay for, will you get kicked out? Can they seize the "property" for non- payment, leaving you with nothing?

What is wrong with renting? Plenty of people with disabilities successfully rent, and once your capital is reduced, you will get benefits just like everyone else.

I would seriously suggest very good legal advice before going through with this purchase.

Yeah - I've got a solicitor. The management company is reputable. The building has recently been refurbished. Currently, as the ground rent is not above £250 per year, they can't seize the property for non-payment of rent. But even if they could - I'm never missed a rental payment / bill in my life.



Renting for people with a support network is fine. Renting for people who don't have a support network is different. I was moved around from care home to care home to carehome from the age of ten, and then dumped into sub-standard private housing when I was 18. I've been renting since then. People don't understand the effect that had/has on my mental health. I need security. Even if it was a garage - I need to know that I don't have to leave somewhere unless I want to. Because, with the purchase of this - it will be the first time in my entire life I'll have security in where I live.



If you grow up with your family, and have people you can live with, and have never been moved against your will - it would be different. But I'm 36 now. I've had 26 years of no security. And I can't take any more.



Also - I can't really lose much money on this one. It would be different if it was £30K. But it's not. And it won't be worse than some of the places I've lived in. A few years ago, when I actually lived in Bristol, I lived in a house share. I paid £600pcm, and stayed there for two years. That was £12K I spent, and I have nothing to show for it today. And the landlord could ask me to leave, and I couldn't decorate etc. Compare it to this - I can decorate. I can't be asked to leave. And afterwards - I'll own it. If my health improves - I'll just rent it out to a student.



If there is something horrific in the lease - I'll find out and reconsider. But as far as I can tell - there isn't.

BristolMan

Afraid_of_Kittens wrote: »

If you owned and lived in a houseboat you can claim Housing Benefit to pay for the mooring fees.

If you owned a caravan you can claim Housing Benefit fr the pitch fees.

But if you own a flat you can't claim for the management fees or ground rent.

Yeah - it's almost as if the Tories are out of touch, and don't care about the experiences of the less fortunate.

sammyjammy

Just keep in mind if you rented and your savings are under £16k you can still claim income based benefits and you'd still have your capital for emergencies/treats.

Ames

Do you claim income based benefits?

If so I think you should write to the DWP and get permission to buy this room. I'd be very concerned that it could be considered deprivation of capital. Normally that isn't a problem when it's a property you're buying to live in, but this is such a strange setup that they might think you're just trying to get rid of capital to claim benefits.

Also from a benefits point of view, I think you'd be better off with savings in the bank (as long as it's less than 16k) and claiming housing benefit, than having it tied up in a room that you'll be stuck with. I doubt that it will be easy to sell on if you decide it's not suitable.

I understand you wanting security, but this seems to offer all the pitfalls of buying alongside all the pitfalls of renting. It doesn't sound like it's going to be a property suitable for someone with disabilities, especially in the long term.

I do understand what it's like to have no support - I don't even have anyone I can put down as next of kin when I'm in hospital. I know how important security is, but I think your solution could be making things even less secure than a private rental would be.

BristolMan

sammyjammy wrote: »

Just keep in mind if you rented and your savings are under £16k you can still claim income based benefits and you'd still have your capital for emergencies/treats.

As far as I'm aware - I'd be on a sliding scale with everything about 6K reducing my benefits, and the moment I hit £16K, I'd not have a penny. Surviving on ESA will be tricky enough as it is, let alone if I have a deduction for having too many savings.

Ames

BristolMan wrote: »

As far as I'm aware - I'd be on a sliding scale with everything about 6K reducing my benefits, and the moment I hit £16K, I'd not have a penny. Surviving on ESA will be tricky enough as it is, let alone if I have a deduction for having too many savings.

Your ESA (if income related) would reduce by £1 for every £250 or part thereof above £6k. So if you had ten thousand in savings, you'd lose £16 per week from your ESA. You'd still get some income based ESA, so your housing benefit would be unaffected by the savings.

If you're on PIP that's not affected at all by savings.

If your savings are less than £16k and you'll struggle on ESA then you don't really need to worry about them increasing to the point where you'd lose benefit. But if you'll struggle on the income, then having savings is important - how would you cope with an emergency like needing a new cooker or a big bill for leaseholder repairs?

pmlindyloo

Some service charges and ground rent used to be paid through the Support for Mortgage Interest scheme.

Now that this scheme has changed to a loan system these service charges and ground rent need to be claimed through the DWP.

OP, you need to check with the Job Centre Plus (DWP) which of your charges can be claimed.


http://www.legislation.gov.uk/uksi/2017/725/pdfs/uksiem_20170725_en.pdf
4.2