Hypothetically, will council honour HB claim for a 2-bed let as a 1-bed at 1-bed rate

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    Hypothetically, will council honour HB claim for a 2-bed let as a 1-bed at 1-bed rate

    For various reasons, we're considering renting our unoccupied 2-bed flat to a family friend who's in receipt of ESA and DLA. As a single person she can only be paid the LHA rate for a 1-bed place, and we're fine with this but we're wondering if the council will take issue over the size of the flat even though we're only asking for a 1-bed rent amount.

    We've written the tenancy agreement describing the second bedroom as a dining room, which to all intents and purposes will be its function while she's living there anyway. It would suit us all if she could confidently take the tenancy, claim the 1-bed LHA amount and the council won't question this. Do any members have experience of this technicality? The present tenant moves out next week and we'd like the new tenancy to start as soon after that as possible. Our worry, as I say, is that the council will take exception to the size of the flat for a single person even though the rent matches the LHA entitlement for a single person. Does anyone have experience of them using discretionary powers to disallow a HB claim because of over occupancy? We're aware that a lot has changed in the last few years regarding how councils administrate HB and what is and isn't acceptable to them.

    #2
    Disclaimer: I am not an expert in Housing Benefit/LHA, but I am a LHA claimant, which sometimes feels like the same thing...

    To my knowledge, there is no technicality for you to worry about, and it is not possible for her to "overoccupy" (or to underoccupy, which I think is what you meant). The "bedroom tax" that you will have heard about is only for those in social housing - that is, those who rent directly from the council, or from a housing association.

    The council will assess your friend's circumstances, and pay the corresponding rate of LHA. What size of property she chooses to live in is entirely up to her. In some areas there may not be much difference between the 1 and 2 bed rates!

    I can speak to this personally, as I am only entitled to the shared-accomodation rate, but need to live in a 1 bed due to my health conditions. (I use my DLA to make up the difference)

    What you may need to be cautious of is whether or not it is a contrived tenancy, and this is where you will need to ask an expert.

    Comment


      #3
      Many posts on here saying : -

      Never let to family and friends, together with horror stories.

      Such as " I'm your friend / relative, you can wait for the rent for
      another 2 months. Lets not fall out over a few months rent".

      be warned.

      Comment


        #4
        Thanks, Chouette, your response is very much appreciated. As a result I have looked into some of the implications of what might be construed as a contrived tenancy - I'd never heard that term before. I wonder now if we might run into problems and I'll try to explain why.

        Our prospective tenant for the 2-bed flat has been our lodger for the last 7 years, renting a room in our family home with myself and my wife. For 6 of those years she has been in receipt of HB due to her health issues. In fact, until this time last year we all occupied the flat in question before moving to a house we bought because my wife and I were expecting our first child. The lodger came with us. At the time we hadn't considered letting the flat to her in her own right, and in the meantime we handed the flat over to a lettings agency to run the tenancy. They found the tenant who's due to move out next week. We were very dissatisfied with the way the agency conducted that arrangement and that's one reason we've now taken back control of the property. The other reasons are that, because our daughter was born last autumn with serious health problems (sadly ongoing) my wife and myself feel we now need to live alone as a family, and yet we have had an excellent experience of letting to our lodger all these years and would like to help her move on safely (she has physical and mental health issues). Because she lodged with us at the flat all those years, it suits us all to have her take the tenancy in her own right now, not to mention that our baby daughter has a very strong relationship with this lady and as the flat is only round the corner, and given the particular situation we find ourselves in now as parents of a chronically ill child, we all feel it's very important to preserve the bond between our daughter and our soon-to-be ex-lodger.

        From what I've read about contrived tenancies I feel we're very likely to be on safe enough ground regarding the nature of the relationship itself. There's absolutely no blood between us and our lodger, and no familial connections of any kind, and the council have paid her rent on the room she has had with us all these years without question. Because of her situation we've planned to drop the rent to an amount slightly above our LHA for a one-bed flat, but now I'm worried that this might raise concerns at the council and make them suspicious of our motives for doing so. The tenant who's about to leave the flat has been claiming HB there for a rent which more accurately reflects the LHA for a two-bed place. Is it likely that our decision to let the place at a reduced rent (of about 20% less) will go against us? In terms of its commercial value, of course we could continue to rent it out at a more realistic commercial rate, but for the reasons I've described we no longer wish to do so.

        Does anyone foresee questions being asked by the council as a result?

        Comment


          #5
          Pollenpath,

          Based on what you've said there is very little likelihood of your lodger come tenant having any difficulty. You've already established a successful commercial relationship as a lodger, the fact she's proposing to move to a 2 bedroom property should pose no difficulties as her DLA is a disregarded income and is commonly used to meet shortfalls between the contractual rent and the local LHA rate.The fact you're looking for less than the current tenant will, most likely, be welcomed by the council.

          As to the question of "contrivance to abuse the HB scheme" - hardly likely, given the legitimate reasons for the move.

          HBadvocacy
          www.hbadvice.co.uk
          www.ucadvice.co.uk

          Comment


            #6
            Thank you so much, hbadvocacy. You've really helped put our minds at rest over the weekend and your perspective is much appreciated.

            I'll keep you posted. Our tenant is taking her forms into the council in the morning and we expect to hear something within four weeks. She's moving in this week and if, in due course, there are any objections from the council we'll respond as helpfully as we can, which may well mean asking you for your thoughts again! Take care.

            Comment


              #7
              Is lodger under 35 years of age? If so, she'll only get shared accommodation rate of LHA according to new regs. This corresponds to the situation while she has been your lodger.

              If 35 or over, she should get the one bed rate.

              What she does withe the LHA is her business - she can take on any sized accommodation.

              Comment


                #8
                Originally posted by Sad S View Post
                Is lodger under 35 years of age? If so, she'll only get shared accommodation rate of LHA according to new regs. This corresponds to the situation while she has been your lodger.

                If 35 or over, she should get the one bed rate.

                What she does withe the LHA is her business - she can take on any sized accommodation.
                Unless she gets DLA at middle or high rate care - in which case the "under 35" rule is ignored. The OP says that the current lodger/prospective tenant is in receipt of ESA and DLA, so hopefully she is either over 35 or in receipt of a suitable level of DLA.

                Comment


                  #9
                  Originally posted by pollenpath View Post
                  For various reasons, we're considering renting our unoccupied 2-bed flat to a family friend who's in receipt of ESA and DLA. As a single person she can only be paid the LHA rate for a 1-bed place, and we're fine with this but we're wondering if the council will take issue over the size of the flat even though we're only asking for a 1-bed rent amount.

                  We've written the tenancy agreement describing the second bedroom as a dining room, which to all intents and purposes will be its function while she's living there anyway. It would suit us all if she could confidently take the tenancy, claim the 1-bed LHA amount and the council won't question this. Do any members have experience of this technicality? The present tenant moves out next week and we'd like the new tenancy to start as soon after that as possible. Our worry, as I say, is that the council will take exception to the size of the flat for a single person even though the rent matches the LHA entitlement for a single person. Does anyone have experience of them using discretionary powers to disallow a HB claim because of over occupancy? We're aware that a lot has changed in the last few years regarding how councils administrate HB and what is and isn't acceptable to them.



                  It matters NOT what size property you rent to her; it could be a stately home!
                  The LHA is based on what her domestic circumstances are.
                  It seems that she only qualifies for a 1 bedroom LHA rate.
                  If that is what you wish to charge for your stately home that is up to you.
                  The PRS is NOT subject to the spare room subsidy.
                  So you can describe the flat as what it is!

                  So many LL misunderstand this simple concept.
                  A council CANNOT prevent any HB tenant from living in a larger property than their LHA would normally pay for.
                  That is down to the tenant.
                  After all she may pay the LHA and then a rich benefactor would make DIRECT payments to you for the balance of the rent due for your stately home.
                  This doesn't happen often!!!!
                  It is up to the LL of any size property as to what rent he will accept.
                  MOST LL would NOT accept a single room rate for a 2 bed property.
                  Some will; but that is their perogative and it is NONE of the council's business
                  However they might balk at the council tax bill for a stately home!!
                  So inevitably the tenant will have to live in a property commensurate with their LHA or be prepared to pay the CT difference for a 2 bed over the CT assistance for a 1 bed!

                  Comment


                    #10
                    You have to decide if you are running a business or a charity !

                    From what you have written, you are running a charity, where the
                    rent you will receive will not cover the mortgage.
                    You have extra expense with the cost of a baby, and you want
                    to decrease the money coming in from your 2 bed property.

                    Your current lodger, who I assume does not pay extra for gas and
                    electric ( I didn't ) will now have the extra expense of heating a whole
                    flat and to pay all the bills. Including T.V. licence, which she wont
                    be paying now.

                    you may find she will struggle to even pay the increases.
                    Then if that happens, you do nothing about it because you are
                    a charity, and she is your friend, and you can't throw your friend
                    out because you don't receive the rent ( should that happen )

                    Have you sat down with your lodger and worked out how much
                    poorer she will be when she rents your flat ? Gas, electric, water
                    rates
                    , T.V. licence, purchacing all the kitchen cleaning items - tea towels, washing up liquid - etc. it all mounts up.

                    Think again about your proposal.

                    R.a.M.

                    Comment

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