This is a slightly unusual scenario:
Mrs C buys a long lease on her council flat. The money is provided by her son & daughter in law. Mrs C signs a ‘Deed of Trust’ in 1996 which states that she will convey the remainder of the lease to her son after 3 years, and then will be allowed to live in the property as long as she wants to. S & DiL cannot sell the property unless she agrees. There is no mention of any rent, though the ‘outgoings’ on the property will be agreed between Mrs C and S.
Mrs C actually conveyed the property to her Son in 2001. In Sept 2005 she applied for HB on a rent of £110.00 per month. We explained that we could not pay HB until 5 years after the conveyance – Jan 2006. We treated her claim as CTB only. We checked the Deeds of the property and the Land Registry which show the conveyance was made.
On the dot in January 2006, Mrs C applied for HB again. this application showed her rent had gone up to £500.00 per month from January……on querying this, she told us that it would have gone up earlier, in Oct 2005, but she could not afford to pay it without HB!! Also, she said, the LLord has put her in new kitchen units and decorated her bedroom.
Her son has confirmed that he would not evict Mrs C if she does not pay the rent. (He could not, under the terms of the Deed of Trust.)
Our legal section feel that there is a legal liability to pay rent, but Mrs C does not have a written tenancy agreement other than the Deed of Trust, which effectively gives her a tenancy for life
I’m unsure where to go with this, as it has elements of non-commerciality, and contrivance….any advice would be very welcome!
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