Housing benefit and “contrived” tenancies

I’m not a whizz regarding the nuances in HB regs (i normally deal with disability benefits) so any help would be greatly appreciated.
i have a client who is currently living with his wife and 3 kids rent free in his wife’s sisters house. Obviously no HB as she is a close relative and theres no liability to pay rent anyway, however things are getting a bit strained and they will shortly have to move out as its getting a bit crowded.
My clients brother in law (wifes brother) owns a property company and has about 10 properties that he rents out.
If my client was to rent one of these would HB be allowed, or would it be classed as a contrived tenancy, or taking advantage of the HB system? I’m just not sure where the (fuzzy) line is drawn between being allowed to rent from close relatives.
Thanks guys and gals, as always.

As always, it will depend on the facts of the case but from what you have said I would think client would have good grounds for appeal were the LA to refuse HB. If there is an established history of the brother-in-law renting out the property commercially and if tenancy given to client and his wife is for the usual market rent for the property I can’t see how the LA could argue tenancy is not commercial/contrived.

In broad terms, I agree with “1964”.  What is important is that the arrangements are beyond those of being merely of a personal and/or family nature.  By definition, the family tie will mean it is looked at by the LA but so long as it is genuinely commercial AND the liability hasn’t been created to take advantage of the HB scheme UNFAIRLY or IMPROPERLY, HB should be payable (based on the info given so far).

Thanks folks. The “client” is a friend of mine and as an adviser i didnt want him coming to me in 2 years with a huge HB recovery debt from his LA.