Noncommercial claim

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    Can anyone help with this issue over whether the HB should be paid.

    We have an outstanding claim that has been ongoing for quite some time. In May 2010 we received an application for CTB from an elderly lady who has been living in private rented accommodation since 2003.

    She had been awarded pension credit and wanted to apply for CTB. She has alzheimers and doesnt understand what she is applying for.

    Her son then became her appointee and we established that they also wished to make a claim for HB.

    The rent had always been £200.00 per month for a 2 bedroom property and the claimants son has said that the tenant did not have a rental agreement prior to the 01 November 2010. However, with effect from the 01 November 2010 the landlord increased the rent to £600.00 per month. The L/L said the reason for doing this was because he could no longer afford to keep the rent so low and needed to increase it in comparison to the market rent.

    We have received a copy of our tenants bank statements which show transactions from October 2010 to June 2011 and it clearly shows that the rent still being paid to the landlords is £50.00 each week.

    I do not believe that this tenancy has been created to take advantage of the HB scheme. However, I am struggling to make a decision as to whether this tenancy is commercial.

    We know that the rent is being paid and the landlords are genuine but I am concerned that the rent had always been £200.00 per month and as soon as the claimant makes a claim for HB the rent is increased to £600.00 per month but the L/L still accepts payments of £50.00 per week from the tenant.

    Any suggestions would be appreciated.

    Many Thanks



    Hello Faye,

    If there is a rental agreement for £600 pcm effective from 1st November 2010 but the claimant has only been paying £50 per week, would they not have arrears? and what has the LL done to recover these arrears?

    I assume they have done nothing (as there is no mention of NOSP) could you not argue non commerciality on that basis?


    Sounds to me like the agreement up to Nov 2010 was non-commercial, but they are not seeking HB for that part.

    I don’t see how increasing the rent to a commercial level could suggest the agreement as a whole is non-commercial.

    If anything, the increased rent is a new liability which has been created to take advantage of the HB scheme. Whether there is something improper to this such that reg 9 is engaged is down to the facts of the case.

    Given that the claimant has continued to pay £50 per week since the rent supposedly increased, maybe you could argue that the new liability is a sham and the claim should be decided on the basis of the original agreement. Then you could either pay at £50 per week, or refuse due to the non-commercial level of rent.

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