Non Commercial Liability

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    I would appreciate any advice on the following

    We have a Customer who is renting a flat from his sister since 2007 and does have a lease agreement stating rent, terms etc (she stays in a town) he is struggling financially due to a drop in his self employed business and is now seeking help with debts of over £20,000.

    HB or CTB has never been claimed in the past but he had now applied – on speaking to him he advises that he cannot provide proof that he pays his rent as it was always paid to his sister in cash and has not actually paid anything to his sister for over 6 months.

    His sister has not threatned him with eviction or pursued rent arrears and he does not think that she would evicted him if he could not pay the rent.  He does not want to apply for backdating of HB/CTB only wants to claim from now.

    I am planning to refuse HB on the basis that there is no commerial liability by would appreciate any advice incase there is something else I should consider.





    nick dearnley

    This could be tricky. The easy one to deal with is the no rent in six months – I’d suggest that this is the same situation as most HB claimants find themselves in, so it can’t be deerminative on its own. The bigger problem for him is that there seems to be no proof that he has been paying any rent. Does the LL have any records that she could submit?

    If you refuse it as non-commercial you will be accepting that there is a liability. If he’s not paid any rent then there may not be a liaibility at all. The LL not evicting could be simply because she expects that he will get HB and that she is prepared to accept a gap in payments while he makes the claim – that could be a commercail decision based on her finances. If there is a tenacy agreement then it wil lbe up to you to show why its not commercial or won’t/can’t be enforced.

    I think you need more information. Is there any record of payments being made? Can he show you, for example, bank statements shwoing the cash being withdrawn? Does the LL have records or receipts, perhaps in her own accounts?

    CH/1097/2004 is quite helpful in family arrangements, but there are other CDs which might help.


    Yes this sounds like an example of arguing in the alternative i.e. that there is no rental liability but if a Tribunal finds there is, then the Council’s position is that it a family style arrangement non-binding rather than a formal landlord / tenant agreement.

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