Renting house to family on universal credit - asking for 2 contracts?

Granddadofyear

Wonder if someone can share some advice.

The family seem nice / should look after the place. But have asked for 2 contracts - eldest son to claim for one room and the rest of the rooms the family will claim.

I can’t get my head around if this is normal or something dodgy. I know housing benefit is reduced for every non dependent living with you but here the oldest child seems to have his own universal credit allowance.

Also not sure if this has any implication on landlord liability insurance and mortgage (we have a standard buy to let).

Any guidance would be greatly appreciated. Thanks

FlorayG

Absolutely that is dodgy. They are trying to say the son does not live with them and has an independent accommodation whereas clearly he will not have - he will share bills and facilities with his family. For a separate tenancy he would have to have his own entrance, bills and facilities. I wouldn't be letting the house to them after them requesting that because they are clearly not honest people.
Aside from that, you would have two separate tenancies which would mean 2 S21 and 2 court cases to get them all out if you needed to, plus who will be responsible for the house costs electric, council tax etc.?

Flugelhorn

sounds very iffy - find someone else to let it to 

Baldytyke88

The son is asking to be a lodger with his own family, not sure if you can do that.

The advice would be that mixing family and business is a bad idea.

FlorayG

Baldytyke88 said:

The son is asking to be a lodger with his own family, not sure if you can do that.

No, because to be a lodger he needs to have a contract with the resident landlord, not an absent one. Plus, no, you can't be a lodger with your own parents

poppy12345

I don't see anything wrong with this as far as help with the rent is concerned. The son claims for his share, which would only be shared rate of local Housing Allowance (LHA if he's under the age of 35. Unless he's claiming either daily living PIP or DLA mid/high rate care and then he would be entitled to the 1 bedroom rate of LHA. This could work well, especially if there's a shortfall of rent, which for the majority of people privately renting help with the rent doesn't always cover the whole amount. 

The parents would then claim for their share, what ever they are entitled to, minus the bedroom for their son. 

You can see the rates here. https://lha-direct.voa.gov.uk/

I rent from social housing and live with my adult daughter, we are both named on the tenancy agreement and both claim for help with the rent. Mine id through housing benefit and hers is through UC (housing element) and we both claim for 50% of the rent. LHA doesn't apply to those renting from social housing. 

FlorayG

"... we are both named on the tenancy agreement..." this is fine
These potential tenants are asking for two separate tenancy agreements, which is a completely different thing

lfc321

Would renting out an individual room to one tenant and separately renting out the rest of the rooms to other tenants make it a HMO? There would be at least 3 tenants, and formally they would not be living as one household, so I suspect it might. 

silvercar

lfc321 said:

Would renting out an individual room to one tenant and separately renting out the rest of the rooms to other tenants make it a HMO? There would be at least 3 tenants, and formally they would not be living as one household, so I suspect it might. 

Not if they are related to each other.

I wouldn't entertain this nonsense. You could name the son on the tenancy agreement. That may mean he can claim some housing element on his UC. If that isn't sufficient to enable the family as a unit afford the rent then they need to look elsewhere.

The positives of having a family relying on benefits as tenants is that they could stay long term and the rent is likely to be paid because they wouldn't want the risk of having to be housed in emergency accommodation. They would hopefully see the house as a long term home and look after the property. Their income could be seen as more secure than someone in low paid employment. 

teaselMay

I'd offer to name all three adults on the tenancy for the full house and let them sort out what that means in terms of their housing allowance. That seems to be the actual situation.

As a private tenant on Universal Credit thank you for considering letting to them, I found pretty much every letting agent completely ignored me regardless of the support from my current landlord of 13 years who needs to sell.

Granddadofyear

Thanks so much for all the prompt responses. Ok so the 2 contracts prob seems far too much of a grey area for us looking for something hands off/hassle free. Really helpful - god bless you all!