Housing benefit and renting from a partner (with a separate right to buy issue)

badgerchow

Hi all,

apologies if this ends up being convoluted, I'm struggling to find a place to start to figure out the best options:


I am full time employed, no kids, no mortgage, but looking at taking out a mortgage over the next year or 2.

i live with my parents at home and help them as they are both disabled (i am not a registered carer)

I have a girlfriend who has children with a previous partner, she receives benefits including housing benefit and is unable to work currently due to disability. We have never lived together at any address and this is unlikely to change in the next few years due to my own living situation.

If i were to buy a house but not live there. Could I rent this to my girlfriend and could she still claim housing benefits towards it? (only interested in legal options obviously, do not want to jeopardise either of our futures) until such time as we did move in together down the line?


Separately, the house she lives in is a council home, and she has a right to buy at a significant discount, however as mentioned I have never lived with her. would we be able to exercise her right to buy on a joint mortgage if I have never lived at that house but she has?

thanks for your time.

Alice_Holt

"If i were to buy a house but not live there. Could I rent this to my girlfriend and could she still claim housing benefits towards it?" 

Likely to be viewed as a contrived tenancy or a non-commercial arrangement, I would have thought.

https://england.shelter.org.uk/professional_resources/legal/benefits/housing_benefit/housing_benefit_claimants_who_are_treated_as_not_liable_to_pay_rent

badgerchow

Thanks, appreciate your thoughts. I've tried searching for these issues before but there never seems to be a clear answer.

I find it odd that, as it would be a buy to let property no matter what and housing benefits are already being claimed by the other party that it would be considered contrived?

"To deny housing benefit for this reason, the local authority must be satisfied that the main reason for creating the liability is to obtain or increase housing benefit entitlement."

i guess that "continuing to obtain" or "obtaining at a new address" would be considered obtaining? I'm honestly not sure if its a new separate application at a new address?

Would this change is it was done through a solicitor/estate agent with a formal rental agreement in place?

thanks

poppy12345

It makes no difference whether she's currently claiming housing benefit anyway. If she moves house in the future to a different local Authority then she won't be able to make a new claim for housing benefit it would be Universal Credit that she would need to claim and contrived tenancy applies to housing element of UC as well.

Even if housing benefit was possible, it can still be classed as a contrived tenancy... you're buying a house for her to rent....

badgerchow

Thank you, any thoughts on the other question? am i better creating a separate post in the housing boards for that one?

calcotti

Alice_Holt said:

"If i were to buy a house but not live there. Could I rent this to my girlfriend and could she still claim housing benefits towards it?" 

Likely to be viewed as a contrived tenancy or a non-commercial arrangement, I would have thought.

I don't see how as they are not currently related or living together as if a married couple.

elsien

Alice_Holt said:

"If i were to buy a house but not live there. Could I rent this to my girlfriend and could she still claim housing benefits towards it?" 

Likely to be viewed as a contrived tenancy or a non-commercial arrangement, I would have thought.

https://england.shelter.org.uk/professional_resources/legal/benefits/housing_benefit/housing_benefit_claimants_who_are_treated_as_not_liable_to_pay_rent

Additionally, you would need a buy to let mortgage, and to carry out all the obligations of a professional landlord potentially including having to evict her if she stops paying for any reason. Is that something you would be willing to do - can't see it being great for a relationship. 

Why would she want to live in a private rental where the rent is likely to be higher than a council property and lose the secure tenancy that she has at present? 

With regards to the right to buy, my understanding is that it is only the tenant who has the right to buy so the tenant would need to pass the affordability criteria for a mortgage herself - very unlikely if on benefits.  A joint application is generally only possible if there is a joint tenancy, or a family member who has been living there for a 12 months. 
There will be more information about this on her specific council/local authority website. 
Can she also afford the ongoing maintenance costs which she doesn't need to pay at present - if you are paying these or a mortgage for her how will you protect the money you have paid in if your relationship breaks down? 

TELLIT01

If your girlfriend lived in a property you owned, she could potentially claim HB if a full commercial rent was charged and a standard tenancy agreement was in place. 

badgerchow

Is the best way to speak to the LA directly and see what they would rule? Get it in writing if possible? It doesn't seem to be 100% set in stone either way?

Alice_Holt

A tenancy between friends and partners can be considered as a 'contrived tenancy' by HB / UC,  it's not just limited to a landlord and a tenant who are related or living together as if a married couple.

The case law is quite complex:
https://medium.com/adviser/how-to-challenge-decisions-contrivance-and-non-commercial-agreements-for-housing-benefit-and-d671dde7484e

I think the OP and his girlfriend need to be aware that help with housing costs would likely to be an area of scrutiny.  As a landlord the OP would (at the very least) need to demonstrate a commercial tenancy was in place, all landlord obligations (gas safety certs, etc) had been complied with, including protecting the deposit, BTL mortgage in place, etc.
Caution is needed, as should UC become aware of new information (i.e OP and girlfriend eventually moving in together), and then decide that it was a contrived tenancy from the start UC can recover any historic overpayments.

The situation the OP describes could be a bit of a minefield, and would be subject to a decision-makers judgement. There is not a straightforward answer, each case is decided on its own merits.
A complicating factor might be the size of the house / potential rent vs the relevant LHA for girlfriend's circumstances.
https://www.gov.uk/government/publications/local-housing-allowance-lha-rates-applicable-from-april-2021-to-march-2022

calcotti

Thanks, Alice.