Terms & Conditions

[Anonymous]

Can anyone help?

Mr L & Mrs L previously claimed CTB at a dwelling. Mr L died and it came to light that Mr L had owned the property jointly with his son (living elsewhere) and not Mrs L.

Mr L left his share of the property to his son in his will. The son is now charging Mrs L rent to remain in the property.

The agreement was previously just a written letter confirming rent to be charged at £118.00 per month for Mrs L’s lifetime. After being refused HB though a solicitor has drawn up a short assured tenancy agreement for £215.00 per month starting 1/12/06. (Mr L died in May 2006)

Mrs L hasn’t really been paying rent between May and December but has been helping to pay the mortgage.

Mrs L can’t really be treated as previously owning the property, can she?
Could it be taken down the non-commercial route even although there is a lease with legally binding terms? Or even the route of taking advantage of the HB scheme (although difficult to prove)?

Hope this makes sense.

Thanks
Pauline
😳

[aosulliv]

Could you not go down the route of changing the nature of the tenancy in order to gain an entitlement to HB?

[Anonymous]

It’s going to appeal so really need to be sure of my argument. Possibly could go down that route though. Thanks (Something to think about!)

[John Boxall]

Putting my ‘My dad was a trust officer’ hat on, my immediate response would be can her late husband leave his share in the property to his son?’ My understanding of the law is that you are obliged to provide for your wife and dependants. While there may be reasons for her husband having to leave his share of the property to his son, for example they could have owned it as joint tenants, in which case it would automatically be transferred to the son on his death, if they were tenants in common and he had to make provision in his will for what would happen to his share of the property, he would at least have to give his wife a life interest.

One for m’learned friends I think……………… 💡

Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

Wilkins Micawber, Ch12 David Copperfield

[Anonymous]

My initial thoughts exactly. It appears that he didn’t have life insurance to pay off his share of the mortgage. The wife probably couldn’t have afforded to pay his share of the mortgage on her income. I suspect this is why ownership passed to the son, however, he is unable to afford the mortgage on his own and they are relying on HB so that they don’t need to sell.

Although proving this may be difficult.

[Anonymous]

Hi Pauline,

No, I don’t think that Mrs L can be considered as previously owning the property (but there might possibly be case law out there that says she can……). So you are left with Non Commercial and Created to Take Advantage. I doubt that you can get enough evidence to prove either.

A) For “Non Commercial”, all the son has to say is “I can’t afford the mortgage by myself, I have to charge rent”. That Mrs L has been contributing towards the mortgage only backs that up.

B) For “Created to Take Advantage”, the arguement is that Mrs L has lived there for some time and the tenancy has only been created because the son can’t afford the mortgage and has to charge rent.

Of course, there are issues over “would you let the property to someone else?” and “would you evict your mother if she didn’t pay the rent?” but in my limited experience it’s tough to prove either A or B.

I’m willing to be shot down in flames, but I don’t know what else to say to help. Perhaps someone else out there has more experience of this senario?

[aosulliv]

Try CH 3743 2003

[Anonymous]

Thank you. I am struggling for a solid argument on this one and was looking for any thoughts.

[Kevin D]

Just some thoughts:

1) Has the will actually been seen?

2) Has a Land Reg search been done (including historical)?

3) [b:ab6dfeaff6]Why[/b:ab6dfeaff6] is the son charging rent (all reasons)?

4) Can the “tenancy” actually be enforced in any case? (If the will allows the clmt to live rent free for the rest of her life, then it’s unlikely that any charge can be enforced).

Before looking at the options of “[b:ab6dfeaff6]non-comm[/b:ab6dfeaff6]” & “[b:ab6dfeaff6]taking advantage[/b:ab6dfeaff6]”, it may well be worth looking at [b:ab6dfeaff6]ACTUAL liability[/b:ab6dfeaff6].

Until a few months ago, I’d have looked at throwing “long tenancy” into the mix. But recentish CDs have effectively rendered that provision pretty much useless for the majority of HB cases. In particular, see [b:ab6dfeaff6]CH/0883/2006[/b:ab6dfeaff6].

Hope the above helps.

[Anonymous]

1)The will has been seen and it basically says that the son will have ownership of the property but does say that if his son failed to survive him then the property would go to the wife.

2) No a Land Reg search has not been done as yet. Could be next step.

3) The son is charging rent as he can’t afford to pay the mortgage and would be forced to sell. He wants to ‘provide a secure place for her to live for the rest of her lifetime’ (his words). He also stated that he wouldn’t let it to someone else but would rather sell it.

4) The lease has been signed by both parties and drafted by the solicitor and has a clausewhich states that the landlord has the right to terminate the agreement if payment of rent is not made within 7 days of the due date.

As I said before she has been paying any rent as such up until now so those terms really only come into play this month.

Basically if we don’t pay her at this address she will be forced to move and claim HB elsewhere (Probably for a much higher rent). My conscience is playing havoc with my ability to think straight.

Any thoughts.

[Kevin D]

Based strictly on the above (subject to a Land Reg check and any other info not posted), my view is that HB is probably payable – just.

There doesn’t seem to be much question about liability and it doesn’t seem to have been created to take advantage etc. So, the only other issue is commerciality. Taking into account the circumstances, it is not straightforward. But, when taking into account CDs on the subject, “commercial basis” has been given a pretty wide latitude. So, in this case, I’d tend towards paying on the basis of “balance of probability”.

Regards

[peterdelamothe]

I thought that a husband could not disenfranchise his wife in this way. I thought the Matrimonial Homes Act would apply but I am not sure. If the wife has the right to continue to live in the property, she must be liable for reasonable expenses. Is this rent? Probably. On the other hand, would the son be charging if HB did not exist? Probably not.

Can the son charge rent for his 50% share which is unaffected by the death of the father i.e. as if a home ownership scheme? If the property is bigger than her needs, what impact does this have ….Questions, questions.

Sounds to me as if what the wife really needs is a good family lawyer.

[Richard Uren]

its worked in the past . how about the fact that he is only charging rent because HB exsists. he has already said he would not let it to anyone else. surley rent is being charged in order to claim hb which he needs for the mortgage. rent is not being charged as though its a commercial let.

either way if you have some one who knows what they talking about you will proberbly have to pay . why not let it go to appeal.

same old story , you can have a go at not paying or move on. no doubt it will come up again.

[Richard Uren]

its worked in the past . how about the fact that he is only charging rent because HB exsists. he has already said he would not let it to anyone else. surley rent is being charged in order to claim hb which he needs for the mortgage. rent is not being charged as though its a commercial let.

either way if you have some one who knows what they talking about you will proberbly have to pay . why not let it go to appeal.

same old story , you can have a go at not paying or move on. no doubt it will come up again.

[Kevin D]

Richard,

Based on the info given in the original post, I think it would be very hard to argue that a liability has been created just to claim HB. The following was written:

[quote:b9ea0e149c]The agreement was [b:b9ea0e149c]previously[/b:b9ea0e149c] just a written letter confirming rent to be charged at £118.00 per month …….

(snip)

Mrs L hasn’t really been paying rent between May and December [b:b9ea0e149c]but has been helping to pay the mortgage[/b:b9ea0e149c]. [/quote:b9ea0e149c]

Although a formal tenancy agreement was subsequently drawn up, it is clear that an agreement was already in place (the letter). The subsequent existence of a formal document doesn’t (necessarily) change that.

Payments towards mortgage payments can have the effect of being rent – see [b:b9ea0e149c]CH/2329/2003[/b:b9ea0e149c].

Assuming the L/L can lawfully charge rent (i.e. assuming the surviving spouse has no claim on the property), there isn’t much doubt as to liability. As for taking advantage (i.e. “contrived”), there is little to suggest this was the reason for charging rent. The reason given is that the L/L needs help to pay his mortgage. There is plenty of case law which makes it clear that this should not necessarily be seen as taking advantage.

If all the above is correct, the only option is to consider whether the agreement is on a commercial basis. And, as suggested above, this is probably a close call.

Regards

[Author]

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