Non Commerciality/Liability to pay rent

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  • #43351
    wintlejb
    Participant

    I have a case where the claimant has been living at the property since April 2004. CTB was claimed and awarded from March 2006.

    Following an investigation it was established that the claimant had gifted £30k in 2006 to his son "as a one-off payment towards his expense of buying this house for us to live in for the rest of our lives." I'm a bit confused by this as the property was purchased in 2004.

    It was accepted that deprivation was not applicable.

    The claimant then applies for HB in June 2012 stating that he was renting from his son and that the date the tenancy began was August 2004.

    A tenancy agreement has been provided showing a start date of August 2004. The signature section of the tenancy agreement gives me cause for concern. It is signed by the landlord, claimant and partner and witness on 6th August 2004. However, the date of signature for the claimant, partner and witness have been struck out and amended to 7th June 2012. 

    There are no unenforceable terms contained within the tenancy agreement.

    Rent is now being charged as the landlords own circumstances have changed meaning he needs to charge rent on the property.

    The claimant states that should HB not be paid the landlord will be forced to sell the property.

    We enquired as to what action would be taken to recover rent arrears. The landlord replied "If the tenants fall into arrears I would not take any action to recover outstanding monies only enquire of my parents why the rent was not being paid." 

    The landlord has also confirmed that should HB not be paid he will be forced to sell the property .

    To pay or not to pay……

    #123002
    peterdelamothe
    Keymaster

    Lots of issues here. Firstly, the issue about the £30K. Was this a payment allowing the claimant a long tenancy /lease rent free? It sounds exactly that. Even if nothing was put in writing, it may be self evident that such a contract exists between the parties. So the landlord may have to sell the property …but with your claimant still resident and entitled to reside rent free for life.

    In these types of cases in my experience, the “rent” is not in fact rent but more of a leasehold service charge which is not eligible for HB.

    So I would want a lot of persuading before I made any payment and indeed this seems to be more of a classic case where HB cannot be paid.

    #124733
    wintlejb
    Participant

    I’ve been thinking long and hard about this.

    Would there be any mileage also going down the 9(1)(e) route?

    By giving £31k to his son “as a one-off payment towards his expense of buying this house for us to live in for the rest of our lives” could it be argued that an implied trust has been created?

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