I have a client aged 29yrs, history of poor health who lives in a flat owned by her parents- she has always paid the rent and now requires to claim LHA. Rules state that this can't be claimed if you rent from a relative, if this is the case she may become homeless/have to seek alternative accomodation. Parents state they will have to terminate tenancy if this is the case as they are not in a financial position to allow her to reside rent free.

There are a number of Commissioners decisions that very basically say that HB can be claimed where the applicantis renting from a relative providing that the arrangement is a commercial one - with either a tenancy agreement (preferably) or at least proof that rent has been paid on a regular basis - ie, a rent book, and the rent being charged is seen to be the same as would be charged to any other tenant: ie, not a peppercorn amount. I seem to recall that one CD said that one of the tests that could or should be applied was would the Parents terminate the tenancy?

........bearing mind of course that the LA will only pass up to the local LHA rate for a one bedroomed property.......

There is only definitely no entitlement in these cases if the close relative from whom the claimant is renting actually lives in the dwelling in question as well.

Otherwise there should be no problem as long as the tenancy is commercial (as outlined by Mike).

Mon 09-Feb-09 06:19 PM by Ruth_T

You may find these CDs helpful.

CH/0627/2002 (reported as R(H)1/03) - which says that the test of whether a tenancy is commercial only occurs once the LA has established that there is a genuine liability to pay rent. It provides a useful list of caselaw on commerciality and a list of principles for deciding whether a tenancy is "not on a commercial basis".

CH/2329/2003 - which says that an arrangement between the claimant and his daughter is still commercial even though she would not sue her father for eviction if he failed to pay rent.

CH/1076/2002 - says that a tenancy isn't non-commercial just because the landlord agrees to accept the HB payments as sufficient rent.

CH/0296/2004 - a disabled claimant whose landlord was his care-giving father was found to have a commercial tenancy even though the father found it hard to say whether he would evict his son for non-payment of rent. This case was heard together with CH/0215/2004 which raised similar issues.

CH/2694/2005 - the burden of proof is on the LA to show that a tenancy is non-commercial. Also says that just because a landlord accepted HB payments that were below the contractual rent as sufficient this does not mean that the tenancy is non-commercial.