HB claimant was leaseholder of property

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  • #44402
    esmith66
    Participant

    I've been asked to make a decision on commerciality on a claim as the claimant has moved into a property owned by her son. He was also her landlord at the previous address, he sold that property and purchased the new one in October and she moved in immediately. The problem however is that the claimant was the leaseholder of the previous address, and I wonder whether we should have refused HB under reg 9 (1)h:

    * leasehold purchased by clmt & ex husband in 1970 for £700

    * in 2005, her son buys the freehold for £30k and starts charging her rent £85 p/w

    * they don't declare the relationship (although we find out later) and the claimant states that as she was the leaseholder her solicitor advised that she did not own, and never had owned, the property. It seems that we accepted this statement, and HB has been paid ever since

    do you think that 1. she should be classed as previously owning the property, 2. should I look at derprivation of capital (assuming that the leasehold was worth something in 2005)? I'm going to ask her for evidence of the time remaining on the leasehold in 2005 and how much it was worth . If the lease had expired then I assume it was worth nothing

     

    The son sold the property for £89k so made a very nice profit!

     

    I would be very grateful for your thoughts/advice

    thanks, erfyl

    #125735
    petedavies
    Participant

    I’m a little confused, on the face of it your decision will not be under 9.1.h, 9.1.ha provided for long-leaseholders from 2007 although I cannot remember from when or if there were any saving provisions.

    My concern is that you have stated that the son bought the freehold and then started charging your claimant rent. If they were leaseholders I would generally expect the lease to carry over with the freehold unless (i) the term of the lease expired at the same time and they chose not to renew or they surrendered the lease at the time of the sale, I think you need to get full details of all of the transactions before you can make a decsion but it does sound as if something is a little hookey to say the least

    #125737
    esmith66
    Participant

    sorry, of course, I’ve been concentrating on her possibly being ‘previous owner’ if the lease had expired, but in fact she may have been excluded under 2(1) as a long leaseholder

    #125738
    John Boxall
    Participant

    I do not think in any event that if she was the leaseholder, that the son had any right to charge her rent anyway

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

    #125743
    walmslm
    Participant

    She is certainly not an owner for HB purposes, that provision can only ever be used to refuse HB when they are the freeholder of a property. A leaseholder is not an owner as far as HB is concerned.

    #125746
    John Boxall
    Participant

    Reg 9

    (ha) he or his partner—
    (i) was a tenant under a long tenancy in respect of the dwelling; and
    (ii) less than five years have elapsed since that tenancy ceased, except where he satisfies the appropriate authority that he or his partner could not have continued to occupy that dwelling without relinquishing the tenancy;

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

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