Service Charge Liability - Passed to Renter?

ian_h

This is an unusual set of circumstances, I originally posted the message below on the Benefits forum but it was suggested this forum may be able to offer some advice from the repairs and service charge perspective:

I'm hoping someone can help point me in the right direction with some advice.

The lady in question is 75, and receives full DLA with the full mobility element, is quite unwell with multiple conditions and her current dilemma isn't helping her health so i'm trying to see if she has any options.

She receives a state pension, pensions credit and Council Tax Benefit (Her DLA is disregarded under means testing), and lives in a 1 bedroom privately rented flat.

Her Private Landlord whom she had been paying via Housing Benefit died 2 or 3 years ago and in his will he left her property (and his own which they immediately sold) to a friend of his, but stipulated the tenant could continue to live there *RENT FREE* until she died, as long as she paid for the upkeep of the property.

Whilst undoubtedly driven by good intentions this has meant that the tenant is presented with large bills for her share of the buildings insurance and the communal service charges as well as having to get boilers serviced and certified etc.

She has not got a tenancy agreement (but the right to stay makes her contractually responsible for costs) and has now heard that the management company need to do major repairs to the roof which will cost each flat circa £7-10k - she doesn't have any savings at all and no income to be able to secure loans etc.

*IF* things had remained as they were and she was still a tenant claiming housing benefit these bills would have fallen to the flat owner, however due to this arrangement, this lady is now facing bills she cant pay.

The new owner who received the property as a gift is very aggressive and resentful of this lady being able to live there rent free and thinks nothing of turning up and shouting and threatening the lady on the doorstep demanding immediate payment of whichever bill she is presented with.

Is there ANY chance she can get any help for these costs (and I admit it looks unfair that the new owner of the property gets to avoid paying this but the facts of her situation are as detailed above).

She's REALLY worried, of course she appreciates the lifetime security she was given but now finds the insecurity is financial rather than due to short term tenancy renewal worries.

Any advice, help or pointers would be very gratefully received and thanks for sticking with the long post!

- As requested by some replies on the benefits board here is the detail from her landlords will:

I GIVE free of tax all my estate and interest (if any) in the property known as XXXXXXXX ('the House') to my Trustees on trust for sale on the following terms:

(i) My Trustees shall permit *THIS LADY* ('the Occupant') to live in the House without payment to them so long as she wishes and so long as she keeps the House in repair, insures it and pays all outgoings relating to it

(ii) While the Occupant is entitled to live in the House my Trustees shall not sell it without her consent

(iii) When the Occupant has ceased to be entitled to live in the House my Trustees shall hold it as part of my residuary estate

moneyistooshorttomention

It does sound like those words "so long as she keeps the house in repair" might well be the clincher - ie putting the onus on her to do (ie pay for) the repairs from my laypersons viewpoint.

One of the legal bods on here would be able to say for sure I expect on that point.

So - working on that worst case analysis situation that I suspect this situation is:

1. how was her rent being covered before she was left this "free tenancy". Was she getting extra benefit to cover the cost of this or was it coming from her "personal" income so to say?

2. I would think it would probably be best for her to get in touch with Shelter and explain her situation and ask if she can get some sort of "housing benefit" type money to cover her share of these costs - in lieu of paying rent.

3. The other option would be whether she has to accept a rent-free tenancy on the flat. I would think it worth her while to check whether she actually has to accept this "free gift" she was given in the Will in effect - but could instead "Refuse to accept the gift of free rent and state that she is going to revert to the original tenancy terms".

My suspicion is that option 3 is probably the most viable option out of these three.

It sounds like she needs legal advice all round as to whether these 3 options are the only ones she has on the table and whether she can enforce 1 or more of them or no.

Thrugelmir

ian_h wrote: »

in his will he left her property (and his own which they immediately sold) to a friend of his, but stipulated the tenant could continue to live there *RENT FREE* until she died, as long as she paid for the upkeep of the property.

What happened to the proceeds?

moneyistooshorttomention

Thrugelmir wrote: »

What happened to the proceeds?

I don't see the relevance of that question???

Friend would have thought "My money" and used it as they pleased. I would be surprised if there's any of it left and they couldnt be made to use it (if there was) on this other property of theirs.

ian_h

Thrugelmir wrote: »

What happened to the proceeds?

The friend of his who he left it to pocketed the cash I guess.

ian_h

moneyistooshorttomention wrote: »

It does sound like those words "so long as she keeps the house in repair" might well be the clincher - ie putting the onus on her to do (ie pay for) the repairs from my laypersons viewpoint.

One of the legal bods on here would be able to say for sure I expect on that point.

So - working on that worst case analysis situation that I suspect this situation is:

1. how was her rent being covered before she was left this "free tenancy". Was she getting extra benefit to cover the cost of this or was it coming from her "personal" income so to say?

2. I would think it would probably be best for her to get in touch with Shelter and explain her situation and ask if she can get some sort of "housing benefit" type money to cover her share of these costs - in lieu of paying rent.

3. The other option would be whether she has to accept a rent-free tenancy on the flat. I would think it worth her while to check whether she actually has to accept this "free gift" she was given in the Will in effect - but could instead "Refuse to accept the gift of free rent and state that she is going to revert to the original tenancy terms".

My suspicion is that option 3 is probably the most viable option out of these three.

It sounds like she needs legal advice all round as to whether these 3 options are the only ones she has on the table and whether she can enforce 1 or more of them or no.

She paid her rent via Housing Benefit previously.

antrobus

ian_h wrote: »

...

(i) My Trustees shall permit *THIS LADY* ('the Occupant') to live in the House without payment to them so long as she wishes and so long as she keeps the House in repair, insures it and pays all outgoings relating to it

What do you think the phrase "pays all outgoings relating to it" means?

I appreciate that this means that the lady in question is faced with "large bills" for the ongoing service charges, and the cost of these "major repairs", but as the occupier of the flat she would be paying for this anyway. At least in the sense that any rent payable would be set at a level to cover such things.

Her issue is with HB. As far as I'm aware service charges can be eligible

https://www.entitledto.co.uk/help/Eligible-rent-for-Housing-Benefit-and-service-charges

moneyistooshorttomention

ian_h wrote: »

She paid her rent via Housing Benefit previously.

Then, in that case, I would suspect her best bet here might be to renounce the "free tenancy" she was left in the Will and tell the inheritor that she refuses to accept this and will be reverting to the original tenancy terms and will be paying rent (from that housing benefit) once again. The onus would then be on the inheritor to cover the maintenance bills - and, in return, he would be getting the rent money from his flat.

The question there though would be as to whether the landlord/inheritor would then be able to turn round and give her notice to leave his flat.

That question may (or may not) be answered by what sort of tenancy terms she had in the first place. There might be some hope of him not giving her her notice the second he was free to do so IF she had more "old style" tenancy terms - ie the ones applicable to tenants quite some years ago now and under which they had rather more "security of tenure" than newer tenants have had in recent years.

How long has she been living there? What sort of tenancy terms did she have when she moved in?

NB; She'd need to check whether housing benefit would resume paying her rent as normal - or get awkward about it and only pay a certain proportion or none.

ian_h

antrobus wrote: »

What do you think the phrase "pays all outgoings relating to it" means?
https://www.entitledto.co.uk/help/Eligible-rent-for-Housing-Benefit-and-service-charges

I (and she), are perfectly capable of understanding this, however when she has managed to find the money to pay the "regular" expenses and is arguable less financially secure now than before, and is presented with a bill for nearly £10,000 which she just doesn't have the question then becomes:

i) Will she become homeless if she cant (note, not wont) pay ?

ii) If she voluntarily renounces the rent free tenancy and agrees a long term tenancy with the landlord at a market rent would HB see this as her trying to manipulate the system (almost the equivalent of making yourself intentionally homeless and therefore ineligible for HB)?

ian_h

moneyistooshorttomention wrote: »

Then, in that case, I would suspect her best bet here might be to renounce the "free tenancy" she was left in the Will and tell the inheritor that she refuses to accept this and will be reverting to the original tenancy terms and will be paying rent (from that housing benefit) once again. The onus would then be on the inheritor to cover the maintenance bills - and, in return, he would be getting the rent money from his flat.

The question there though would be as to whether the landlord/inheritor would then be able to turn round and give her notice to leave his flat.

That question may (or may not) be answered by what sort of tenancy terms she had in the first place. There might be some hope of him not giving her her notice the second he was free to do so IF she had more "old style" tenancy terms - ie the ones applicable to tenants quite some years ago now and under which they had rather more "security of tenure" than newer tenants have had in recent years.

How long has she been living there? What sort of tenancy terms did she have when she moved in?

NB; She'd need to check whether housing benefit would resume paying her rent as normal - or get awkward about it and only pay a certain proportion or none.

She's been there 19 years and was most recently on an AST I believe - the new landlord is unlikely to voluntarily agree to anything that would impose a liability on them even if there was rent involved as they to be blunt seem to just want her out?

G_M

She can, of course, give up this rent-free inheritance.
She cannot, however, return to occupation on an AST without the Trustee's consent. Is he likely to grat her a new AST? I suspect not from everything you've said.
In which case she would have to leave and find alternative accomodation.
Whethere the council would re-house her, or classify er as 'intentinally homeless' I don't know (though I suspect the latter).

And whether she can claim the service charges via HB or some other benefit, again - that's a benefits question really, not a housing one.

The bottom line, I suspect, is that she has had rent-free accomodation for some time now, but there is a catch to that, as she's now discovered.