Tenancy in home bought by relative

It was bound to come up….

UC claimant with a child, living with family, can’t fund suitable accommodation, a relative has offered to buy something on buy to let, and make her the tenant with all relevant agreements etc. fully signed up.

Told by both DWP and CAB that she cannot rent from a relative.

As far as I can see, the situation is much as it was with HB; the relative will not be resident, the tenancy must not be contrived, and although it doesn’t appear to be in the UC rules I assume something like the ‘commercial arrangement’
rule will also apply in practical terms.

Any pitfalls?

You’re right, the rules are exactly the same as HB in this set of circumstances.  The commerciality requirement is in UC Reg 25(3).  I think there is a discussion on here somewhere in which it is argued that Reg 25(3) is ultra vires s11 of the Act - I wasn’t convinced.  Schedule 2 para 5 says you cannot get UC for payments to a close relative who lives in the same accommodation, but it doesn’t exclude liability to a relative who lives elsewhere.

Schedule 2 is missing some of the other “dodgy” tenancy provisions in HB Reg 9, but I don’t think any of them would apply here.

PS here is the discussion on whether Reg 25(3) is ultra vires

Splendid, many thanks.