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Clare
Clare, Solicitor
Category: Property Law
Satisfied Customers: 33276
Experience:  I have been a solicitor in High Street Practise since 1985 with a wide general experience.
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CAN ONE OBTAIN HOUSING BENEFIT FOR A HOUSE WHICH YOU OWN OR

Customer Question

CAN ONE OBTAIN HOUSING BENEFIT FOR A HOUSE WHICH YOU OWN OR IS HELD IN TRUST FOR YOU
Submitted: 3 years ago.
Category: Property Law
Expert:  Clare replied 3 years ago.
Hi
Thanks for using JustAnswer. My name isXXXXX will do whatever I can to answer your question.
What is the nature of the Trust?
Claire
Customer: replied 3 years ago.


Hi Claire


Did you get that reply


Paul

Expert:  Clare replied 3 years ago.
Hi
No I am afraid not
Claire
Customer: replied 3 years ago.

In 2000 I bought a house off a friend at a discount as her relationship ended. Her EX sold her the house 25 % discounted and contemperaneously i bought it from her

We used the same solicitor who drew up an agreement that she pay me rent roughly the same as my mortgage on Shorthold tenancy agreement

On or before 1/1 2004 the property was to be soldand any profit distributed between us

I did not sign this as I found out she was claiming Council Housing Benefit

I consulted another solicitor who adivsed me not to sign as this would be illegal

In 2007 my tenant was given a legacy and now wants the house as she says she has a beneficial interest as I was a trustee for her

Can an Illegal contract not signed be enforced

Customer: replied 3 years ago.

Hi Claire


Did you get my reply?


Paul

Expert:  Clare replied 3 years ago.
Hi
So you purchased the property and it was held in your name.
Your friend rented the property from you and there was originally an agreement (oral) that the profit would be shared between you is that correct?
How much was the property worth and how much did you pay for it?
Claire
Customer: replied 3 years ago.

I bought the property in my sole name she rented it on a proper tenancy


We had a verbal agreement that any profit would be shared on or before 1/1/2004


 


I paid £60,000 but she forwent the deposit


 


She underpaid rent by a large amount after 7 months and the council paid her Housing Benefit to pay me but did not pay in full


 


The house value now does not realy matter as it is the principle I need to establish


 

Expert:  Clare replied 3 years ago.
Hi
How much discount did she give you?
Claire
Customer: replied 3 years ago.


She forewent the deposit and we agreed that anything more than £45,000 would be shared


I beleive that the crux of the matter is CAN HOUSING BENEFIT BE USED TO BUY A HOUSE OR A PROPERTY YOU OWN OR IN WHICH HAVE A BENEFICIAL INTEREST ?


 

Customer: replied 3 years ago.

H Claire


Did you get my last reply


paul


 

Expert:  Clare replied 3 years ago.
Hi
Unfortunately the answer is not likely to be of any help to you.
In terms of the Local Authority regulation you certainly are not entitled to claim Housing Benefit in respect of a property which you own.
Whilst it is fair to say that the rules have got a great deal stricter in recent years this was the case even in 2000.
The rules in respect of property in which you have a beneficial rather than an equitable interest is much less clear - and had the Local Authority been aware of it they may have revoked the benefit.
What is does not do however is change the basis of the agreement between you and this person in terms of her claim on the property
Claire
Customer: replied 3 years ago.

Hi Claire


Surely any agreement tainted by illegality is not enforceable at law


How can a fraud be the basis of a legally enforceable contract?


If I had signed the agreement knowing the rent was fraudulently obtained would have made me conspiritor to defraud the local authority


Also what about the proceeds of crime -- can one benefit from a crime?


Paul

Expert:  Clare replied 3 years ago.
Hi
I am sorry but these arguments - although interesting will not wash.
In fact the arrangement was not necessarily illegal and indeed quite possibly did not amount to fraud at all and accordingly the argument will not wash.
The other party had no beneficial interest in the property and accordingly was entitled to the benefit
The other party will say that she forwent her entitlement to a lump sum immediately in return for the promise of a lump sum at a latter date - and that in the mean time she paid rent in the usual way - assisted by a benefit to which she was entitled
Claire
Customer: replied 3 years ago.

One cannot have housing benefit on a property which is in trust for one-- FACT


 


 

Expert:  Clare replied 3 years ago.
Hi
If you are the beneficiary of a formal trust no - but this was not the position in this case - there was no Formal Trust and she was not the named beneficiary of one.
Please do not misunderstand me - I understand full the argument that you are making - it is just that I fear that if you rely on this alone you will find yourself facing an unpalatable result
Claire

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