I am looking to buy a property to rent out and wish my neice and her family to be long term tenants.
The person in question currently receives housing benefit or LHA and has been in receipt of this for 2 years. They currently rent from a private landlord in the same way as they would rent from me and due to the number of children involved the LHA they are paid covers the market rent of such a property.
The property I am buying is a cash purchase and will be mortgaged to a BTL in 6 to 12 mths time. The property will be subject to all the normal tenancy checks - gas/ electric etc and will be rented at the market rent for the area to my neice and her family. They will be subject to a standard tenancy agreement like anyone else with a clear message that eviction will occour should the rent not be paid.
It is not necessarily the case that my neice will be in receipt of LHA on a long term basis but it is a possibility.
To date, I have had no property rented out - this is my first one and once it is up and running I shall be doing a second.
Does the above fall into the catagory of being a contrived tencacy? Obviously I hope it doesnt!
I have had an informal chat with the council who tell me the LHA application for this tenant will be looked at more closely due to the fact that it could be classed as a contrived tenancy but so long as there is a standard tenancy agreement in place there shouldnt be a problem.
any thoughts on this one would be mucho appreciated!