2nd Home – rental liability.

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    Claimant has moved out of a flat he owned and moved into another owned by his daughter.

    Rent is £650.00pcm which is to be “offset” by rent received from the claimant’s original property.

    The claimant’s daughter is, in effect, the landlord of the original property – she has let it and rental payments are made directly to her.

    Forgetting commerciality/contrivance/capital issues, my problem is this – Is there a liability for rent for benefit purposes? I am inclined to the view that there is no certainty to the contract for a number of reasons:

    1) The daughter has control over the original property – who it is let to, for how much, under what terms etc.
    2) There is no provision for what happens if the original property is not let.
    3) There is no provision for what happens if no rent is paid in respect of the original property.
    4) There is no provision for what happens if rental income form the original property exceeds £650.00

    Whilst the daughter could well have an action for possession I am not convinced she could have an action for ‘rent’ arrears – the overall rental figure may be certain but the amount actually payable by the claimant is determined, to a great extent, by the actions of the daughter.

    I am also wondering if a trust has arisen by implication. If so who is the liability to – the daughter(which is the form of the agreement) or the trust (which may be the substance of it).

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