Commercial Tenancy, Non Commercial or taking advantage?

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  • #31693
    engstrom
    Participant

    I have had an enquiry from the father of a customer advising that his daughter is in receipt of Income Support and is due to vacate her property following “bankruptcy and eventual divorce”.

    He has asked whether he could purchase a house for his daughter and two children (boy aged 12 and girl aged 9) and whether she could claim Housing Benefit to help pay the rent, with him being the Landlord.

    This will, he indicates enable her to seek a permanent residence in Havering without disrupting the childrens education whilst in due course also enable her to seek employment.

    The father doesn’t live in Havering and I can understand what he is trying to do.

    Before I reply to him I obviously need to give regard to Reg.9. In doing so I have come up with a few considerations of my own:

    The property will be purchased with the sole intention of his daughter renting it without it being placed on the open market for rent.

    I don’t believe the father is an established Landlord with a portfolio of properties in the borough and as we know he wouldn’t have rented this property out before?

    Would he evict her if he didn’t pay the rent? – If he had had to get a mortgage to fund the purchase then possibly?

    Does anyone have any other thoughts………..would you pay?

    #88635
    stevedaymond
    Participant

    You will need to consider the 3rd question regarding if no rent was paid to consider commerciality. But the father renting to a daughter would not really worry me. If I made a sustantial investment I would trust my family to treat it better than a person who I did not know. It would save time on vetting tenants etc and also helps out a family member. No problem with that.

    #88636
    Kevin D
    Participant

    The difficulty here is undoubtedly commericality. The info given so far suggests that “taking advantage” isn’t at issue. Trouble is, that same info does seem to suggest, quite strongly, that the father is only considering this because of his daughter. There appears to be no possibility the father would have purchased a property for the purpose of letting to any other tenant. It’s touch and go – a toss up between personal arrangement and commercial arrangement. I wouldn’t bet a cent on the outcome at a FtT – either way.

    #88637
    Darren W
    Participant

    From what you have said the situation sounds very much like Regina v Solihull Metropolitan Borough Council Housing Benefit Review Board ex parte Simpson

    #88638
    Steve Anning
    Participant

    Mr Engstrom – no pearls of wisdom – Just saying hello !!!!

    Steve “the adopted northerner” Anning

    #88639
    Anonymous
    Guest

    Darren W: [quote:ffb5cbd3d9]From what you have said the situation sounds very much like Regina v Solihull Metropolitan Borough Council Housing Benefit Review Board ex parte Simpson[/quote:ffb5cbd3d9]

    On the facts as described, I am having difficulty in seeing how the proposed arrangement would take advantage of the HB scheme (ie to abuse, as was held in ex parte Simpson).

    #88640
    Anonymous
    Guest

    I think that is what Darren means to be fair

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