What is this legal or contrived tenancy

[geordie12]

Friend of mine has her niece who is a lone working for her part time in her shop 16 hours a week , the niece has 2 boys. She gets working tax credits child tax credits and housing benefit for her current private rental which she rents privately through a letting agent . Shes a lone parent with 2 boys .The niece she asked her aunt to buy a property for her to to rent back from her aunt, she has to railroaded her into things in the past but only small things eg lending her money for a car holiday buying a TV for her birthday etc , which she has always paid back any money she's borrowed . I don't think her paying the rent would be an issue I do think she would pay the rent every month But her aunt never says no, it's her niece and it's her only family she has, Her niece has asked her to buy a house which would be bigger than she has now for her to rent back off the aunt. I know it's an investment for my friend and she's got a ready made tennant in her niece and her rent will be paid partly paid by the local authority, because she's getting benefits. The niece says it's legal as long as she is paying the correct rate of rent for the property and she doesn't give to her cheaper , the rental income will cover the mortgage repayments . They will have a commercial tenancy legally drawn up . But this is just me wondering is this enteritly legal .She tends to talk her aunt into most things and sometimes I think she prays on her good nature. But property buying is a huge step for anyone.I know she's doing it on a buy to let mortgage and it all seems above board. I just don't want her fingers burnt later on if it goes wrong, I don't think for one minute her niece will not pay the rent so that not an issue as she's always paid her back in the past . When it's been a loan for something smaller a car etc , but it's property, I just think she needs to look further into it but her niece keeps saying it's perfectly legal. I know it's got nothing to do with me but is it' all legal. As I have heard of a contrived tenancy but the law seems very vague . But the best part will be the local authority will be paying partly for a property which will be hers one day anyway. Which then makes me doubt is this correct anyone know anything about this please or point her in the right direction before it goes any further, thanks

Just wanted some quick advice. So I went shopping in the range couple weeks ago and whilst there a tin of paint fell off the shelf and splattered on the floor covering myself in white paint and my babies buggy in white paint. The store has refunded me the cost of my clothing but is refusing to refund me the cost of my buggy. What can I do to make them pay for my buggy as it is now covered in white paint

@MummyKx3
I think you need to start your own thread, as your question has no link at all to the op

I rent off my dad and I'm also a single mum to two. I looked at getting housing benefit but it specifically said that they will not pay it if your renting from a family member.

england.shelter.org.uk/housing_advice/benefits/housing_benefit_renting_from_family
she will probably have to hold a deposit in a deposit scheme & have gas boiler serviced - to prove that her niece is a commercial tenant & be aware of the costs if any repairs are required & any profit has to be taxed & you can no longer get tax rebate for mortgage repayment. She will need to pay for landlord home insurance (which is very expensive) although this can be claimed against tax as of course the annual boiler service amongst other things - she will need to keep tax records & do annual tax. She will need to have smoke & co2 alarms - her niece will have to pay for her gas/electric/water/house contents insurance/council tax - these are not her aunts responsibility.

@Kidssendingmenuts if your dad had a commercial agreement with you ie a proper tenancy & charges you market rent than he can (as per pp) but you have to follow the guidelines mentioned by crisis

the rental income will cover the mortgage repayments

and the income tax now due on the full amount?

From 6 April 2020, tax relief for finance costs will be restricted to the basic rate of income tax, currently 20%. Relief will be given as a reduction in tax liability instead of a reduction to taxable rental income.

Absolute insanity that someone can claim HB and use it to pay rent to a close family member, just another example of how crazy certain aspects of our benefits system.

It’ll be a contrived tenancy & unlikely to work