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asky5555

Hi,

I own a rental prop(just the 1), i currently living in a rental, Im unemployed now and cant get UC beacuse of that house. Tenant isnt paying her rent and I want to just sellup. I understand it can be disregarded for 6months, I will be purchasing where I am currently renting.

Few questions, does the tenant still being in the rental, facing eviction have any effect on the below questions. Theyve just received the S8 and will tell me when they get another place, hopefully doesnt go through court.

If I just put a simple a for sale sign on window is that valid to get UC. Will proof be needed this way or an estate agent.

I've lost alot of rent and probably need to refurb the house, So ideally need a good sale price, would DWP say the price is too high, Ive seen similar smaller houses so just going to add an extra 5k.

If I put on sale, then apply UC and say buyers are just putting in low offers, and I decide to put on rent say 5 months in, would UC get recovered.

Sorry theres so many quesitons. Thanks Everyone

Yamor

The regulations say that you must be taking "reasonable steps" to dispose of the property, and there is case law that even preparatory steps before actually putting it on the market will count.

If a sign on the window is a reasonable way to market the property in your circumstances, and is likely to lead to approaches from purchases, then it should be fine, subject to providing evidence (perhaps photographs?). Of course, it will be easier to evidence the "reasonable steps" taken if you actually use an estate agent.

Regarding the price, the Sweet & Maxwell commentary says that a "totally unrealistic price" would be a problem, and the disregard would only apply once the price is lowered to something realistic. Whether adding £5k to the going price for similar properties is realistic or not will be very dependant on the facts of the case.

If the disregard does apply, and then you change your mind, the disregard will no longer apply, but that should not affect your UC entitlement up until that point.

born_again

Unless you have started eviction process already. Then it will take far longer than 6 months to get them evicted. Even more so with the change of regulations from 1 May.

itsthelittlethings

Are you likely to be able to get another job soon?

TimeLord1

Who is paying the tenants' rent? Are they in employment? Or claiming benefits and having the rent paid directly to them? You wouldn't get UC if the equity is over 16k; Which you can get paid directly to you if they're on benefits.

asky5555

Thanks for replies. So If tenants still in the house, not receiving rent from them(applied for direct payment) Can I can still claim UC, not sure how long for me to get another job and them to leave.

Also if I apply U.C and say Im going to put the house for sale in the next few weeks(just make enquiries for now), would DWP say no , as the house is still counted as capital, would DWP wait until a board goes up. As Im thinking just to wait and see the landscape in 3 to 4 weeks.

Thanks

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/81984571#Comment_81984571

You can claim UC.

Claiming does not guarantee that you will receive an award.

It makes no difference to eligibility whether the tenants are paying their rent or not. The value of the equity in the property is all that is considered (as notional income) in the calculation for UC eligibility. The value of the equity in the property is actual equity after deducting remaining mortgage on that property (which is unusual in UC assessment which would more usually ignore debts).

The rent received (or not received) is not considered as income because, if it was, that would be a double count for the same asset (counting as capital and as income).

If the value of the equity is greater than £16k that would usually result in the UC award reducing to zero.

There is, as has already been noted upthread, a (time-limited) disregard for the equity value of the property if the property is being actively marketed for sale.

The OP seems to suggest that they will simply put a "for sale" sign in the window offering the property for sale at £5k above the local market price for the similar houses. The OP justifies this on the basis of the amount of rent not received and probably need to refurb the house so, therefore, needs a good sale price.

I am not convinced that this would satisfy the assessment for the property being actively marketed for sale:

• the lost rent makes no difference to the value of the house.
• if the property needs refurbishment, that will reduce the value below the market not increase the value above the market.
• if the OP meant the would do the refurbishment themselves prior to selling, then that would seem to wholly negate the idea that the property is being actively marketed for sale. Regardless, refurbishment will cost money and that means capital or income to finance the refurbishment works which I assume the OP does not have. If the OP does have capital or income to support the property refurbishment, then they will likely be ineligible for UC award.
• how will the OP put the "for sale" sign in the window? All the OP can do is to ask the Tenant to put the sign in the window. What is in it for the T to do so? Even if the sign is displayed, what stops the T taking it straight back down again?
• what steps has the OP taken to negotiate the T vacating the property? Alternatively, is it the OP's intention to sell the property with the Sitting-Tenant? A property with a Sitting-Tenant usually sells for less than the market price. A property with a non-paying Sitting-Tenant will have a value far less than the market price.

In summary, the OP has a non-paying Sitting-Tenant in a property requiring refurbishment and thinks the property will be considered by a DM as being "actively marketed" for sale by placing a sign in the window at £5k above the local market price for the property type. It really does not stack up that the DM will consider that sufficient for the value of the property equity to be disregarded in a UC application.

There is a slim chance, outside of the property being marketed for sale, that the OP could present the position that the property needs refurbishment and has a non-paying Sitting-Tenant, thus there is no equity. I suspect, even for this scenario, a DM would expect to see that action is being taken against the T, notice served, etc.

Regardless of all the above, the OP can't lose by making a claim for UC. An award of UC seems unlikely but, assuming the OP has sufficient NI contributions record, nJSA may well be possible. That is a smaller sum but better than nowt.

What measures is the OP taking towards securing new paid employment? That should probably be the priority ahead of resolving the rental property. No reason not to so both in parallel, but resolving the rental property won't be quick.

asky5555

Hi, Yes you are right with getting a job as a priority.

Going back to UC and my rental home, Homes in that area dont seem to sell(some have been on for 5 months), also Ive been to inspect the property and its a total mess(alot of damage).

I am now thinking just to moving in that rental home, when she leaves. How does that work for UC would they help with current rent.

Theres alot of scenarios but would there be a disregard as I have intention to move in, plus also that time to make the house liveable for me.

Thanks

itsthelittlethings

https://forums.moneysavingexpert.com/discussion/comment/81986409#Comment_81986409

They would pay the mortgage interest after a while, if that is what you mean by rent? If you were living in the property you would then be entitled to UC as long as that's the only property you own.

born_again

https://forums.moneysavingexpert.com/discussion/comment/81986409#Comment_81986409

As asked before have you started the eviction process?

As this is not a quick process.

asky5555

Sorry, Yes eviction is started before 1/5.

So its all about what do I do in the meantime, I have my rent to pay where Im staying now, council tax etc. My savings are well below the 16k. If I sell up I understand its disregarded but that gets tricky when the tenant is still in and the house is a mess.

Im going to just put in a claim and say im moving into the rental property once the tenant leaves and the house is renovated. hopefully this is all within the 6 month disregard.

Thanks