WIBU to buy a flat and rent it to disabled BIL who receives housing benefit?

[JasmineBuckles]

I know it would be morally questionable, but would it actually be possible?

BIL lives in a horrible HA flat in a horrible area. He's very mild mannered and regularly has people knocking on the door asking for money, trying to break in etc.

We live in a nice house in a nice area and the thought of him being 20 miles away in a rough area really upsets me, probably more than DP.

He won't come and live with us, I've asked and asked.

We have a house from an inheritance that when we finish doing it up will be worth about £100k.

My plan is to sell it, put the money into a trust, then use it to put a deposit on a flat near us and use the rent/housing benefit to pay the mortgage.

Is this possible? I know we are on shaky ground morally, but we want BIL to be nearby in a nicer place than he is now.

We fell into this category many years ago. I asked the same question of my local Council about a tenant getting HB whist living in a relatives house.

There response was clear.

1. The house had to be available to let for any tenant.

1. The house had to be previously occupied by a tenant that was not family for a minimum duration of 6 months.

If these criteria were met then yes, it was deemed to be an established rental and could then be let by family members. So the answer in our case was yes, but within strict guidelines.

it might be that different councils have different policies on this. Best idea is to call Housing benefit and check exactly what their rules are in your area.

You'll have to set it up in a way that isn't a contrived tenancy - for example my cousin rented my flat, but she was the fifth tenant I'd let it too, she had a full tenancy (market rent, would have been evicted if she didn't pay, no extras or bonuses because she was related to me) and in our case we didn't actually know each other until after she tried to rent the flat after 17 weeks of deliberations the LA allowed it.

You might struggle to get it past them with him as your first tenant. They won't allow it if you buy it to rent to him. They might allow it if you just happen to rent out a property that he just happens to want to rent, but it's not guaranteed.

Also you'll have to be careful with your mortgage. Many BTL mortgages don't allow HB tenants. You'll also have to pick your LL insurance carefully as some don't cover HB tenants and some don't cover family tenants.

I think I need to have a chat with someone in his housing association. I googled reg 9, and as I understand it it's when banks act as trustees.

Imperial, the inherited house is DP's, not mine. I'm just the woman with the ideas! He is 100% in favour.

Our buy to let mortgage won't allow us to rent to family.

So in theory we could buy the Elat, rent it out to someone else for a bit, then rent it to BIL.

WHat if we put the flat in trust with our solicitor as trustee, then have the trust rent the flat out through an agency to BIL? Or is that super dodgy?

Why not just pay the deposit on a private let for your BIL?

I'm sure you mean to do the right thing by your BIL, but I'm afraid it doesn't sit right with me that you're basically using your BIL's disabled status to get your mortgage paid.

Or would the 100K from the sale of the house be enough to buy a flat that he could live in outright?

It needs to be seen as a commercial tenancy. It is possible but I'd seek some proper advice.

My mum does this for my sister, slightly different in that she remortgaged her own own home and bought the 2nd house outright. The council are aware that the house my sister lives in is owned by her mother, there is a proper tenancy agreement in place and there has been no problems with housing benefit.

You are better off speaking to mencap who can advise on specialist layers with expertise in this area.
There may be different ways to purchase the property to then rent to him.

The regulation 9 is part of the Housing benefit regulations about renting to close relatives, You will both need to be interviewed separately at the same time to determine if the tenancy is contrived, if the council decide that its not then they will pay the Housing benefit.
Have you checked that the maximum they will pay for your area will be enough rent for you as the LHA rates are deliberately set at 30% of the range of rents in any area?
If you attempt any shenanigins with trusts etc, that flags up contrivance, i.e. you are attempting to circumvent the regulations, so I would steer clear of anything like that

I think you would have to ensure it was a normal commercial tenancy, ie:

• offered on the market and alternative prospective tenants getting the nod over him if their circumstances are more favourable.
• credit checks, rent, deposit etc - the same amount you'd reasonably be expected to charge any other tenant (usually 6 weeks rent minimum)
• legal agreement and understanding that he would be evicted if he breaks it.

You're still not guaranteed that they'd accept his claim though. The best way would be to ask the housing association themselves. Or why not just act as guarantor - if you can afford to buy, this will be cheaper than a deposit on a home, and there would be less chance of his housing benefit claim being turned down. (I assume that if you trust him to pay rent to you then you trust him to pay it to someone else!)

My friends ex does this. He's high up in the police force and rents to his elderly parents on HB

I did this for a while - my parents have a portfolio of a few buy-to-let houses in our town, most inherited of my mother's aunt who passed away, and as I moved back to the UK from living abroad for over a decade I obviously needed somewhere to live but a lot of private landlords weren't keen to rent to me as I had just moved from abroad, didn't have a job (I came back to help look after my grandparents who have dementia because my mother couldn't cope with the stress & dad works offshore as the only breadwinner) and no references from previous landlords ... my parents were in the process of looking at a couple of houses near one they already own and since they would need a tenant and I needed a landlord, ti seemed to fit perfectly.

Obviously as I didn't have a job I was on benefits for a few months when I first came back as there were no jobs going and whilst I didn't expect to be able to claim HB, as I haven't used the UK system before I went to the council to ask about what entitlements I would have and they told me I actually might get HB, my parents just had to fill in a form with some questions to ensure it was a proper tenancy (What would they do if I didn't pay rent? Would they be visiting me? Who would be paying the bills? What would happen if I couldn't afford the rent? etc) and I filled in the application form with a note attached to say it was my parents' house. The form then went to the decision maker who ruled in our favour and they just made the stipulation that the money had to go directly to my parents rather than through me.

I was only on it for a few months until I got settled, found my job and stopped claiming, but it isn't something I thought I would ever be able to claim under my circumstances, as is the case with a lot of benefits - when I went to see the woman at the council I wasn't expecting to be eligible for anything but was actually entitled to more than I thought and the advisor told me that was quite common because people assume that a lot of benefits aren't applicable to them, when they actually are, they just have to know that they can claim.

It wouldn't be legal. Sorry OP. I totally get why you would want to do that