Renting to my daughter

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  • Renting to my daughter

    I have a 3 bed property to rent to my daughter and her boyfriend. She is a full time student and he is unemployed. What effect would my daughter living at the property have on the amount her boyfriend would receive in applying for housing benefit?

  • #2
    Is the property mortgaged?

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    • #3
      Renting to my daughter

      Yes it is mortgaged - i have previously rented the property

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      • #4
        Sorry, should have asked if it was a BTL mortgage.

        If it is a BTL mortgage, the majority of lenders do not permit family members as tenants. It'll be written in the mortgage terms and conditions to which you agree and sign up to.

        Additionally, you need to know whether the mortgage lender will permit a HB tenant to sign a tenancy agreement for the property. A change of tenants' circumstances requiring an HB claim after the commencement of a tenancy is one thing, but to initiate a tenancy agreement with an HB claimant is usually unacceptable to the majority of lenders.

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        • #5
          Be careful to make it clear to the HB about relationships, be open and honest. They may view this as a contrived tenancy especially if you are not up front about the relationships.
          I also post as Moderator2 when moderating

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          • #6
            It is not a BTL mortgage and I previously let to a HB tenent

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            • #7
              petjoke: why not let to daughter's boyfriend as sole tenant, to avoid "no letting to family" problem?
              JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
              1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
              2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
              3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
              4. *- Contact info: click on my name (blue-highlight link).

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              • #8
                I need to be open about their relationship as my daughter insists on this

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                • #9
                  Originally posted by petjoke View Post
                  I need to be open about their relationship as my daughter insists on this
                  Depends on how LHA/HB/DSS people interpret the term 'family', I guess.
                  JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                  1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                  2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                  3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                  4. *- Contact info: click on my name (blue-highlight link).

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                  • #10
                    had some experience with inter family lettings.

                    agree you need to be up front and honest about who's who and what's where with the HB / council guys.

                    From memory, our bottom line was that they needed to be assured that it was first and foremost a business deal. contracts in place and if if rent not paid, tenant will get no special favours. they may well visit and spend more time on the case.

                    only thing i can think of with regards to claiming benefit: will they not say that a 3 bed house is unnecessary for a couple? Although I suppose benefit paid will just be reduced - he/she will be asked to pay up the difference.

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                    • #11
                      I know it's not part of your original question, but do think carefully about renting to family members. If they dont pay the rent are you really ready to evict them and take her to Court for the money or to charge for defects to the property? Doing business or renting to friends and family doesnt work in my personal experience, its fraught with problems. Take care.

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                      • #12
                        Thanks for your reply. My daughter isn't eligible for HB as she's a FT student. Do you think HB will pay her boyfriend a reasonable amount and the council tax? I need to have some idea as I need some income as i can only subsidise them to a degree.

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                        • #13
                          If daughter (student) cohabits with him, that will of course reduce Council Tax by 25%.
                          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                          4. *- Contact info: click on my name (blue-highlight link).

                          Comment


                          • #14
                            Originally posted by petjoke View Post
                            Thanks for your reply. Do you think HB will pay her boyfriend a reasonable amount and the council tax? I need to have some idea as I need some income as i can only subsidise them to a degree.
                            the word 'subsidise' makes me think that you're looking to give them a preferential deal over any other tenant that might pay you the going rate for your property.

                            which you are of course. they are family.... but the hb people are likely to take a dim view (or rather a keener interest) if they think that they are in any way being 'scammed' (wrong word i know but cant think of another. i suppose 'used' might be better).

                            forgetting the family connection, could they afford to rent this house from you (whether thats with or without hb assistance?)

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                            • #15
                              Due to the fact:
                              • Own the property
                              • Pay a residential mortgage (or is there something else you need to clarify? we won't tell your lender that you're renting it... )
                              • Your daughter is not an HB claimant

                              I would rent the property on an AST agreement solely to your daughter for six months. The boyfriend would merely live with her as a lodger at her discretion. Your daughter must be solely responsible for the rent paid to you. It equally follows that your daughter is responsible for household bills. It will be up to your daughter whether she accepts rent and shares bills with the boyfriend - that'll be a good test of a relationship. Whether the boyfriend receives HB is not your concern because he ain't your tenant if you do things this way.

                              If your daughter can't afford the whole rent and/or she doesn't trust the boyfriend to do the right thing - then do not let to either of them at all.

                              At the end of the day, if you decide that you want to evict your daughter through the courts, the boyfriend wouldn't come into it because he ain't your tenant.

                              Keep it simple.

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