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Remus2004
Remus2004, Barrister
Category: Property Law
Satisfied Customers: 70416
Experience:  Over 5 years in practice.
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If a couple rent a property from the wife's parents they can

Customer Question

If a couple rent a property from the wife’s parents they can still get housing benefit if its "not set up to abuse the benefit system". What does this mean? What specifically is excluded?
Submitted: 2 years ago.
Category: Property Law
Expert:  Remus2004 replied 2 years ago.
Thank you for your question. My name is ***** ***** I will try to help with this.
It depends on the circumstances. Their starting point probably will be that it is set up to abuse the system.
You firstly have to declare your relationship with the landlords. They will probably want a statutory declaration from the landlords.
Usually it is helpful if you rent the property through an agency to the tenants and there is a formal agreement.
Generally they will consider it helpful if the property wasn't bought specifically for the tenants. That is always prohibited but it is something that makes them suspicious.
Can I clarify anything for you?
Jo
Customer: replied 2 years ago.

I'm still confused.

1) What is meant by 'abuse'. It can't mean only that the arrangement entitles the tenants to HB. Can it?

2) What statutory declaration must the landlord make?

3) para 5 "the property wasn't bought specifically for the tenants. That is always prohibited but it is something that makes them suspicious." That doesn't quite make sense. Are there words missing? "not" perhaps?

Expert:  Remus2004 replied 2 years ago.
1 No. It can mean setting up an arrangement to claim when there are other options.
2 I'm not sure what you mean ?
3 Yes, you probably realised the meaning from the context. It is not always prohibited but generally is the source of suspicion.
Customer: replied 2 years ago.

1. My daughter lives with her husband and their toddler. The op[tions are:

a) Rent a 2-bed flat commercially (London so say £1,200 pcm) and claim HB.

b) Rent a small specially bought house from us at a below market rent (say £1,200 pcm) and claim HB.

c) As (b) but without claiming HB. But that's unaffordable.

d) Other combinations of rent and property are possible but I'm hoping I can ignore them.

Of these option (b) is best for the extended family and costs the state no more than option (a) - which was the position 18 months ago. But its only viable if they get HB. So will option (b) be seen as abusive? If so, is there a way of changing it so that it isn't so seen?

2. You wrote "You firstly have to declare your relationship with the landlords. They will probably want a statutory declaration from the landlords." I responded "What statutory declaration must the landlord make?"

Expert:  Remus2004 replied 2 years ago.
There is a risk that they will say that option b is an abuse of the system.
Whether you can persuade them it is not depends on the suggestions I made above really. They don't always work but sometimes they do. They will certainly not like the below market rent. That is a classic sign that they pick up upon.
The statutory declaration is generally just that it is a proper commercial tenancy arrangement but I don't think you can do that if you are charging below the market price