Letting to my brother

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    Letting to my brother

    Im trying to help a family member out as they unfortunately not in a position to buy anything where they live so i thought I could buy and rent to them, not for profit but purely to give them a proper home rather than a room in a shared occupancy. I realise its a grey area but is there any way I can do this legally ?

    #2
    Nothing legal to stop you doing that, as long as he is paying what you want him to pay out of his own earnings.

    He will however NOT be able to claim UC Housing Element to pay the rent. (or at least it's extremely unlikely that the DWP would pay it).

    Trying to claim rent costs for renting from family is automatically seen as a 'contrived tenancy in order to claim benefits' and it's very hard to prove otherwise.

    The suspicion is always that you are renting to family simply in order to cover (some of) your mortgage cost, and that it's not a true rental, eg. would you evict if they didn't pay the rent?
    In other words you are automatically suspected of trying to get benefits to pay to buy a property for you.

    Comment


      #3
      Of course, by entering into a proper tenancy agreement, complying with all the legal and regulatory requirements and paying tax on your rental income. But letting to a family member is almost never a good idea, and without wanting to sound rude, you obviously have no clue what being a landlord entails. A recipe for disaster - but you did ask.

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        #4
        You would need to declare this to the mortgage company - assuming you would be getting a mortgage

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          #5
          nukecad,

          As far as I know, and I am not completely up to date on HB, if the proposed tenant is entitled to HB then he cannot be refused on the grounds that the LL is a relative. You're biggest hurdle would be the mortgage if you need one.

          Comment


            #6
            I for many years could not afford to buy a house, as were many millions of other people.- that's life

            Look it it this way, you are going to give your brother a loan of - lets say £ 150,000
            Yes, you will effectively be borrowing £ 150,000 to help your brother. and he will repay you at, lets say £ 700 per month.
            You still have to pay the mortgage whether he pays or not.

            The main problem the repeats on here is I cant pay the rent cos i am in finalcial dificulites, and of course you wont want to throw your brother out on the street, we hear members on hear reporting.

            you have more chance of family members screwing you for none payment of rent, and never paying you back for missed rent.

            HBA - When unemployed, a single person would only be entiltled to a on bedroom home, and in the North west the HB renatal payments are capped at about £ 380 per month, so you wont get your full rent.

            You may have to suffer, financially while your brother lives in luxury ?
            He is adequately housed at the moment.


            Comment


              #7
              This forum has a number of posts about renting to family members - Don't do it, if you want to help your sibling out then act as guarantor for them, don't become their LL - money and family never ends well.

              Comment


                #8
                Originally posted by Kape65 View Post
                As far as I know, and I am not completely up to date on HB, if the proposed tenant is entitled to HB then he cannot be refused on the grounds that the LL is a relative. You're biggest hurdle would be the mortgage if you need one.
                The tenant would not be able to make a new claim for HB. (Unless a pensioner or in 'specified accommodation').

                HB had been replaced by Universal Credit Housing Element for all new claims.

                It makes no difference though, if renting from a family member than a claim for UC-HE will be refused on the grounds that is probably a 'contrived tenancy for the purpose of claiming benefits'.
                See this parlimentary briefing document: http://data.parliament.uk/DepositedP...ncies_v4.0.pdf

                Whilst it is possible to claim UC-HE when renting from a relative (and some do) the initial suspicion will always be against it being a 'commercial' tenancy and not contrived, and the initial decision will be a refusal of UC-HE.
                (And it was the same with HB when that could be claimed).
                It is then up to the claimant to prove otherwise to the DWP, which is very difficult to do.

                There have been too many cases in the past of someone buying a second property and then putting a (already adequatey housed) family member in order to claim benefits to help pay the mortgage - so nowadays all such family letting arangements are viewed as suspicious.

                Comment


                  #9
                  Originally posted by ash72 View Post
                  This forum has a number of posts about renting to family members - Don't do it, if you want to help your sibling out then act as guarantor for them, don't become their LL - money and family never ends well.
                  This.............

                  Comment


                    #10
                    PS. I'm not saying the DWP are right or wrong in their interpretation of the law. (And they are often wrong but this one I reckon they can defend and AFAIK nobody has thought it worth taking to court).

                    I'm just saying what happens in practice.

                    Comment


                      #11
                      Originally posted by nukecad View Post
                      PS. I'm not saying the DWP are right or wrong in their interpretation of the law. (And they are often wrong but this one I reckon they can defend and AFAIK nobody has thought it worth taking to court).

                      I'm just saying what happens in practice.
                      I stand by my original post that it is allowed, you may have to fight your corner though! An easy defence against a contrived tenancy would be if the OP were a professional LL.

                      Comment


                        #12
                        If you want to help let him rent the property and pay you the rent he can afford (without claming benefits of course). That is fair not only on him but on the taxpayer too...
                        Unshackled by the chains of idle vanity, A modest manatee, that's me

                        Comment


                          #13
                          Originally posted by islandgirl View Post
                          If you want to help let him rent the property and pay you the rent he can afford (without claming benefits of course). That is fair not only on him but on the taxpayer too...
                          Thats all well and good, but brother seems to be able only to afford "a room in a shared occupancy"
                          Therefore will not have enough money to pay all the rent.
                          I would envisage the the brother would only be able to pay the equvilant of half the mortgage repayments.

                          I would suggest, that Helvie just give brother a lump sum for 10 years of rent top up, which he will have to write off, and that will eliminate the " I can't pay you any rent for a few months, but i'm your brother and you cant throw me out, can you".
                          With the valid excuse of "Well I have to pay a lot of council tax, and to heat this whole house / flat is too expensive, as opposed to sharing. what will all the standing charges for gas, electric,water rates, internet charges, mobile phone ( mobile is not essential ) etc, etc.

                          What with the mortgage repayments, repairs and maintenance etc, it's a possibly financial disaster.

                          We have seen it all before, hence our recomendation "Not to do it"

                          The brother is housed at the moment, and unfortunately not to the standard he or you would like, but again - that's life.

                          I don't have an up market comfortable car I want, - thats life. and on and on it goes.



                          Comment


                            #14
                            That was the point - help him out by letting him have the house for what he can pay never mind the financial side this is family. If the OP cannot do that then leave the brother in what he can afford.
                            Unshackled by the chains of idle vanity, A modest manatee, that's me

                            Comment


                              #15
                              A buys a property with a mortgage. He lets on the open market to B who gets benefit. A's purchase is financed by B's benefits.

                              C buys an identical property next door with a mortgage and lets it at the same rent to D, his brother, who gets benefit. C's purchase is financed by D's benefits.

                              Any difference?

                              Comment

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