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    • Sally_Strawberry
    • By Sally_Strawberry 17th May 19, 6:30 PM
    • 3Posts
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    Sally_Strawberry
    Renting from a family member
    • #1
    • 17th May 19, 6:30 PM
    Renting from a family member 17th May 19 at 6:30 PM
    My parents are interested in buying a property in Caerphilly, Wales and renting it out to me. They would be cash buyers. I'm on ESA (work group) and currently live at home with them. If I rented the property I would have to claim housing benefit. I've checked the local housing rates for Caerphilly which would amount to £320pcm for 1 bedroom. Are my parents allowed to rent a property to me? They're interested in buying a 2/3 bedroom house but I would only be able to pay £320pcm in rent. Does the property they choose to buy have to be rented out at the current market value rent? Thanks.
Page 1
    • Slithery
    • By Slithery 17th May 19, 6:36 PM
    • 1,583 Posts
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    Slithery
    • #2
    • 17th May 19, 6:36 PM
    • #2
    • 17th May 19, 6:36 PM
    Are my parents allowed to rent a property to me?
    Originally posted by Sally_Strawberry
    Yes.

    Does the property they choose to buy have to be rented out at the current market value rent?
    If you want to claim housing benefit then yes, it does.

    The term you need to read up on is a contrived tenancy.
    • babyblade41
    • By babyblade41 17th May 19, 7:12 PM
    • 831 Posts
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    babyblade41
    • #3
    • 17th May 19, 7:12 PM
    • #3
    • 17th May 19, 7:12 PM
    Your parents must not confuse helping you out and getting rent via HB , that would be a contrived tenancy.
    The rent would have to be in line with current rents for the type and area, all gas certs etc and be ready to evict if necessary.
    It is very hard to make it work under the strict guidelines of claiming benefit. They must be first and foremost LL's and not anything else .My advice would be not to do it , it can cause more problems than it solves
    • Sea Shell
    • By Sea Shell 17th May 19, 8:06 PM
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    Sea Shell
    • #4
    • 17th May 19, 8:06 PM
    • #4
    • 17th May 19, 8:06 PM
    You'd also need to consider what might happen in the future if your parents need to release their equity in this property if their circumstances change.
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow " JOB DONE!!
    This should now read "It's time to start digging up those Squirrelled Nuts"!!!
    • KatrinaWaves
    • By KatrinaWaves 18th May 19, 11:02 AM
    • 666 Posts
    • 1,215 Thanks
    KatrinaWaves
    • #5
    • 18th May 19, 11:02 AM
    • #5
    • 18th May 19, 11:02 AM
    The situation you describe fits quite clearly the definition of a contrived tenancy under which housing benefit would not be payable.

    It is quite difficult to get housing benefit on a property that your parents have bought solely to rent to you who claims housing benefit, as it is clearly not commercial. Charging you a low rent to match your housing benefit is another contrived tenancy factor.

    If your parents want to invest in property, they are free too, but they cannot use the benefits system to get their money. If your parents want to help you, they are free too, but they cannot manipulate benefits in order to help themselves at the same time.
    • Sally_Strawberry
    • By Sally_Strawberry 19th May 19, 4:06 PM
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    Sally_Strawberry
    • #6
    • 19th May 19, 4:06 PM
    • #6
    • 19th May 19, 4:06 PM
    Thanks everyone for your advice. It's clear to me that it's against all rules and would look like a contrived tenancy. I've been looking for somewhere to rent in Cardiff from January this year but it's hard to find a landlord that accepts housing benefit!
    • LocoLoco
    • By LocoLoco 19th May 19, 6:32 PM
    • 288 Posts
    • 381 Thanks
    LocoLoco
    • #7
    • 19th May 19, 6:32 PM
    • #7
    • 19th May 19, 6:32 PM
    Thanks everyone for your advice. It's clear to me that it's against all rules and would look like a contrived tenancy. I've been looking for somewhere to rent in Cardiff from January this year but it's hard to find a landlord that accepts housing benefit!
    Originally posted by Sally_Strawberry

    Is it possible to look a bit further out? I was looking to move to Wales a couple of years ago; Cardiff was very difficult to find HB friendly landlords but I looked up to about half an hour out and found other places that had more HB friendly lettings. I was also able to put my name on the housing list even though I didn't live there; the lists are long obviously but if you're not on it yet it might be worth putting your name down (got to be in it to win it and all that ). Hope you find something soon.
    • Housebuy12345
    • By Housebuy12345 19th May 19, 6:49 PM
    • 211 Posts
    • 46 Thanks
    Housebuy12345
    • #8
    • 19th May 19, 6:49 PM
    • #8
    • 19th May 19, 6:49 PM
    Your parents could rent their flat out at the market price and give you the extra from £350
    • Sally_Strawberry
    • By Sally_Strawberry 20th May 19, 7:35 PM
    • 3 Posts
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    Sally_Strawberry
    • #9
    • 20th May 19, 7:35 PM
    • #9
    • 20th May 19, 7:35 PM
    Your parents could rent their flat out at the market price and give you the extra from £350
    Originally posted by Housebuy12345
    Oh I didn't know this was allowed?
    • Cakeguts
    • By Cakeguts 20th May 19, 9:00 PM
    • 6,195 Posts
    • 9,740 Thanks
    Cakeguts
    Your parents could rent their flat out at the market price and give you the extra from £350
    Originally posted by Housebuy12345

    Wouldn't that affect the benefits claim?
    • KatrinaWaves
    • By KatrinaWaves 22nd May 19, 11:02 AM
    • 666 Posts
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    KatrinaWaves
    Where is this 'extra money' coming from? The OP will only GET the HB amount, so where is the 'extra' coming from...
    • Fire Fox
    • By Fire Fox 22nd May 19, 12:53 PM
    • 24,842 Posts
    • 28,899 Thanks
    Fire Fox
    Thanks everyone for your advice. It's clear to me that it's against all rules and would look like a contrived tenancy. I've been looking for somewhere to rent in Cardiff from January this year but it's hard to find a landlord that accepts housing benefit!
    Originally posted by Sally_Strawberry
    Welcome to MSE.

    Given your parents are financially secure and wish to assist you ... will your parents pay a larger than usual deposit to the landlord and/ or sign as your guarantors?

    Being guarantors means they are legally liable for the rent if you stopped paying for any reason. This relates to the whole period of occupation not just the initial six months.
    Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️ Trainee Rosie the Riveter.
    • ripplyuk
    • By ripplyuk 22nd May 19, 1:19 PM
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    ripplyuk
    When you’re filling in the housing benefit claim form, list the rent as the full market rent. They will pay the LHA rate and you can just not bother topping it up from your own money.

    I’m assuming your parents are never going to take you to court for the ‘arrears’.

    ETA: just read this on the Shelter website. Looks like a low rent is not a problem after all.

    ‘Local authorities should not assume there is no commercial arrangement just because the agreement is between close friends or relatives, the rent is low or because the landlord does not let to tenants for purely financial reasons’
    Last edited by ripplyuk; 22-05-2019 at 3:42 PM.
    • KatrinaWaves
    • By KatrinaWaves 22nd May 19, 3:02 PM
    • 666 Posts
    • 1,215 Thanks
    KatrinaWaves
    When youíre filling in the housing benefit claim form, list the rent as the full market rent. They will pay the LHA rate and you can just not bother topping it up from your own money.

    Iím assuming your parents are never going to take you to court for the Ďarrearsí.
    Originally posted by ripplyuk
    Okay that's one aspect of the contrived tenancy 'sorted' (through fraudulent representation)

    Now how is she going to hide the fact her parents bought a house solely to rent to her using benefits? Fake names?
    • ripplyuk
    • By ripplyuk 22nd May 19, 3:48 PM
    • 1,822 Posts
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    ripplyuk
    Okay that's one aspect of the contrived tenancy 'sorted' (through fraudulent representation)

    Now how is she going to hide the fact her parents bought a house solely to rent to her using benefits? Fake names?
    Originally posted by KatrinaWaves
    From what Iíve read, these cases are at the local authorityís discretion and I know other people in the same situation who have had no issues at all. I canít see the council being all that bothered since the OP is going to be claiming housing benefit regardless. It wonít be costing the council anything more.

    Though I guess if they did query it, the OPís parents would have to rent out the house for 6 mths initially, to a stranger.
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