Is this a fraud o/p???? I’m not sure

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    Customer inherits a property in 2007 valued at £240K.  There is no mortgage or debt secured against the property.  The claimant tells us at the time that she has inherited the property and that she is selling it.  Notes from customer services state that she is advised to let us know when the property is sold (no time frame is stipulated on the records of the call).  She also signs a written statement where she states she knows to inform us once the property is sold (again no time scales are given to the claimant).  She never ends up selling the property and instead allows her former partner and her son to live there rent free in return for renovating the property.


    Towards the end of last year a fraud investigation is undertaken for undeclared capital (the inherited property).  Claimants HB/CTB entitlement is revised from 26 weeks after the date she inherited the property and she now has overpayments of £25k.


    She has appealed to overpayments claiming she did nothing wrong, she told us at the time she inheritied the property and that it was up for sale and that she knew to let us know when it was sold.  Can't argue with that.


    Had we added the property value to her claim at the time, the system would have disregarded it for 26 weeks and then ended her entitlement because of the property value exceeding the £16k limit.


    I don't think the overpayment can be classified as fraudulent, but should it be classified as LA error?  Can it be recovered or should my LA accept the information she was given at the time led the claimant to believe that she only needed to inform us once she had sold the property and the fact that she never sold the property meant she had nothing to inform us of?


    I can't make up my mind on this one and wondered how others viewed this scenario


    Have you considered if the claimant had taken reasonable steps to sell the property like reduce the asking price, improve its saleability? as you may be able to extend the period you disregard the property for.


    It all depends on whether clt was aware that the property would only be disregarded while she was taking reasonable steps to sell it. Being told to tell the LA when she sells a property is not the same as being told to tell them at the point she decides NOT to. It doesn’t look as if the assessors covered themselves in glory by not checking for 5 years whether it WAS still up for sale (unless this is normal for where you live). I think I would go for LA error and you migh teven have to write it off. You might reduce it a bit by establishing the exact date at which intention to sell became intention to keep, rather than rigidly reassessing after 26 weeks.


    Thank you both for those responses.
    Yes the claimant reduced the asking price twice on the advice of an estate agent and due to the fact it was in a poor state. She states she couldn’t afford the repairs herself and around 8 months later allowed her former partner to move in with her son to live there rent free in return for renovations. So I think I could reasonably extend the disregard until the property was occupied and possibly further if it was still on the market.
    In this part of London Chris, property generally sells quite well and certainly doesn’t remain on the market 5 years later :tired:
    During those 5 years we’ve done things like double check her income and who lives with her but never once did we check that the property was still up for sale or if it had been sold, so I’m in agreement with you can’t be a fraud o/p.
    I’ll be popular in the investigation office when I tell them

    nick dearnley

    Can you use sch 6 paras 4(b) or 25 to continue the disregard? Or value it at nil while it’s occupied by the former ptnr and son?


    Just to add that it can’t be treated as a fraudulent overpayment unless your clt either admits to fraud during an IUC, accepts a caution or ad pen or is found guilty in court.

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