Terms & Conditions

[trina]

Elderly couple live in a home owned by non resident son. Moved in three years ago.

They occupy under a verbal agreement that they pay the mortgage (direct to the mortgage company) and pay for upkeep/maintenance of the property. They have said they intend to live out the rest of their life at the property. The verbal agreement appears to just confirm the requirement to pay, I do not believe that they have any understanding or agreement of what action may be taken if payment stopped. They have said they entered into this arrangement because they were unable to get a mortgage themselves due to age.

There is clearly a liability to pay (Reg 12(2)?)and it can be demonstrated for the previous 3 years. As the liability varies depending on the current mortgage can this arrangement be considered to be a periodic assured Shorthold tenancy? or could it be a long tenancy, not sure if a long tenancy has to specifically say it will last more than 21 years.

Would anyone pay HB on this arrangement? 😕

[petedavies]

I can see no way you can refuse HB.

As for the type of tenancy:

The period of occupancy is linked to the mortgage which is not certain ditto the rent which is mainly linked to the interest rate but also to the capital outstanding.

If your claimant won the lottery and paid off nearly all the capital the chances are the “rent” would fall to a level outside the scope of the Act.

Ir sounds as if the arrangement is far too informal to give rise to a contract & think what you have is a licence a la Barnes – v – Barrett

[trina]

Thanks for the advice. 🙂

[clamar]

A lifelong tenancy is for 90 years: Law of Prperty Act 1925. Section 54 of the Act provides that a tenancy for more than three years must be in writing. Therefore I guess this isn’t a long tenancy since the term of the tenancy isn’t expressly stated in accordance with s. 54.
See CH/3586/2005

Regarding reg. 8, there’s a Commissioner’s decision (I can’t find it at the moment) that held that paying the outgoings on a property was reasonable recompense to the owner and that reg. 7(1)(a), as it then was, didn’t apply.

I’d pay based on what you’ve outlined.

[Nicky]

The following CD’s “may” be of help:

ch/4922/2002
ch/2329/2003
cshb/379/2002

[Author]

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