Is it possible to buy house and rent it to previous owner under HAP etc?

Donald Trump · 30-11-2019 1:30am #1

Suppose someone has their own house but is down on their bad luck financially.

Would it be possible to sell/transfer their house to someone else and then have the original owner apply for some rental assistance and just pay some rent to the new owner - if such an agreement was reached between them?

30-11-2019 9:57am

Bank will insist on vacant possession, after sale completion it would be up to the buyer whether they want to rent. I can’t imagine it being a condition of sale that any buyer would agree to.

Gumbo · 30-11-2019 10:16am

Donald Trump wrote: »

Suppose someone has their own house but is down on their bad luck financially.

Would it be possible to sell/transfer their house to someone else and then have the original owner apply for some rental assistance and just pay some rent to the new owner - if such an agreement was reached between them?

Where will the cash from the purchase go?
Will the owner entitled to hap if they have this cash bundle?

Donald Trump · 30-11-2019 11:51am

Thanks for attempted replies but you are all giving me replies to questions I did not ask. I kept the original post short to keep it simple. I can't anticipate every possible scenario that other posters might imagine and include it in the details so I kept it succinct. Perhaps that meant it was unclear.

So if you are wondering about the buyers credit rating or whether they might need a mortgage - it is not relevant to the question. So you can assume it is not an issue

If you are wondering if the current owner would remain eligible for HAP if they had savings/cash then that is a different question. Assume that they would not have enough after debts are settled to put them over any limits

Similarly, if for whatever reason you imagine a scenario in which the new owner might want to replace the kitchen and have the previous owner move out during it, please ignore it for now.

My scenario is that person A owns a house today. They are having financial difficulties that won't be going away anytime soon. They receive no state help towards the mortgage. They will end up losing the house the way that things are going. Then tomorrow someone else buys the house (legitimately) and pays off mortgage. They will allow the previous owner to stay there with some rent. Can the original owner then apply for some kind of rent assistance to help pay rent to the new owner. New owner is not going to kick them out while they are getting assessed if it only takes a few weeks.

Please don't worry about the probability of this scenario in real life based on your own personal experiences. Assume that it is a possibility.

Gumbo · 30-11-2019 12:54pm

If they qualify for HAP under the hap requirements then they are fine. Please check the hap requirements for confirmation.

antoinolachtnai · 30-11-2019 1:16pm

This scheme is along the lines of what you might be thinking.

https://icarehousing.ie/

dennyk · 30-11-2019 1:33pm

In general, yes, there's nothing inherently impossible in such a scenario. The buyer of a house is free to agree to let the house to the seller following the sale. The former seller is now a tenant and is free to apply for HAP. Whether a buyer who would be willing (and able) to make such an arrangement could be found and whether the former seller would subsequently qualify for HAP assistance are separate questions, of course, but assuming both were true, it could be done. Whether such an arrangement would accomplish the ultimate goal of the seller (whatever that might be) is also an open question, of course.

Grumpypants · 30-11-2019 1:44pm

You can't rent a HAP house from a family member. But otherwise i guess if you can find someone with enough cash to buy the house and then rent it back to the person then it is possible.

Zenify · 30-11-2019 1:51pm

You are saying to ignore all the variables and keep it simple. Simple: if you are entitled to HAP obviously you can get HAP.

That seems to be the answer you want. However, you will encounter a lot of difficulties during this. Selling to connected parties and suspicions arising from the council to name a few.

Victor · 30-11-2019 2:01pm

This: https://www.citizensinformation.ie/en/housing/renting_a_home/housing_assistance_payment.html says "You must be on the local authority’s housing list – which means that you qualify for social housing support." https://www.citizensinformation.ie/en/housing/local_authority_and_social_housing/social_housing_waiting_lists.html

I understand you can't be on the local authority’s housing list if you have previously owned a property. However, you should investigate this so see if it applies in this case.

Donald Trump · 30-11-2019 2:11pm

Victor wrote: »

This: https://www.citizensinformation.ie/en/housing/renting_a_home/housing_assistance_payment.html says "You must be on the local authority’s housing list – which means that you qualify for social housing support." https://www.citizensinformation.ie/en/housing/local_authority_and_social_housing/social_housing_waiting_lists.html

I understand you can't be on the local authority’s housing list if you have previously owned a property. However, you should investigate this so see if it applies in this case.

Ok. So this is the kind of information that is really useful. If that is true then it appears that my scenario is not possible. Although it would seem to be unfair that someone who lost a house could never be placed on a housing list? Perhaps that is not correct?

30-11-2019 2:18pm

Donald Trump wrote: »

Ok. So this is the kind of information that is really useful. If that is true then it appears that my scenario is not possible. Although it would seem to be unfair that someone who lost a house could never be placed on a housing list? Perhaps that is not correct?

In the scenario you have outlined the person hasn't lost a house. They have sold one.

Edit: one other thing to consider - will the property meet the required standards of the HAP scheme?

Donald Trump · 30-11-2019 2:23pm

Deleted User wrote: »

In the scenario you have outlined the person hasn't lost a house. They have sold one.

What's the difference? In either case they have no money or assets now.

Donald Trump · 30-11-2019 2:37pm

Deleted User wrote: »

Edit: one other thing to consider - will the property meet the required standards of the HAP scheme?

What's this related to? Is it an inherent property of the house such as location or something that can be remediated such as not being clean enough or having a washing machine? If it is the former then it is relevant. If it is the latter then it is irrelevant to my question

Empty_Space · 30-11-2019 2:37pm

Op lives up to name .
ðŸ˜‚

Gumbo · 30-11-2019 3:17pm

Donald Trump wrote: »

What's this related to? Is it an inherent property of the house such as location or something that can be remediated such as not being clean enough or having a washing machine? If it is the former then it is relevant. If it is the latter then it is irrelevant to my question

OP. You are on an internet board. You will get various answers.
If your responses continue along the line of this then you won’t get many replies.

The official answer lies with the HAP scheme in Limerick.

handlemaster · 30-11-2019 4:56pm

So it seems the OP is asking can you sell your property and then apply for social assistance fr housing.. ?? Interesting , I hope this is not possible but you never know there are alot of people who think they are owed housing in this country.

OP you are coming across as aggressive in your replies., might want to chill before hitting the keyboard

Donald Trump · 30-11-2019 6:15pm

Empty_Space wrote: »

Op lives up to name .
��

Nah, just plenty of people jumping to tell me facts that aren't pertinent to the question. I appreciate the input and all but if it's not relevant to what I am asking they might as well be jumping in and telling me what the capital of Mongolia is.

Maybe you live up to your own name too ;-)

Victor · 30-11-2019 6:22pm

Oh, if the new owner is directly related to the current owner, there may be an issue in getting a payment.

Donald Trump · 30-11-2019 6:29pm

handlemaster wrote: »

So it seems the OP is asking can you sell your property and then apply for social assistance fr housing.. ?? Interesting , I hope this is not possible but you never know there are alot of people who think they are owed housing in this country.

OP you are coming across as aggressive in your replies., might want to chill before hitting the keyboard

Why do you hope it's not possible? Do you want the person to be thrown out on the street and left to die? Would that get your jollies off for you?

Person A has a mortgage but is in a situation where they will likely be on disability benefit for the rest of their lives. The person has no immediate family to speak of.

Some different scenarios:
1) Person B pays their mortgage for them for the rest of their life
2) Person B buys the house and lets person A live there for the rest of their life for the HAP rent. (There is no equity in the house, at least not when other debts are paid)
3) Person A stops paying mortgage and drags out through the courts until evicted and dragged (or wheeled) out by bailiffs by their hair. Then gets put into either a hospice or some other state provided care

Scenario 1 is neither sustainable long term or realistic. person A and Person B are not related and B has never lived in the house etc.

Strange the amount of sneery people who would seem to prefer scenario 3 so that a person who is already dealing with a lot could have the last of their dignity stripped away.

Mod note
Uncivil words removed.
Please refrain from posting this again.

Limpy · 30-11-2019 6:36pm

A family in the southwest bout half an estate worth of houses (council houses) and rented them back to the owners. Instead of paying the council they payed the family.

Thats different From what your doing but the owners you buy From would have to explain to the social welfare how they are in a situation to receive HAP.

Gumbo · 30-11-2019 6:36pm

Now op, I suggest the following :

https://www.citizensinformation.ie/en/housing/renting_a_home/housing_assistance_payment.html

http://hap.ie/

handlemaster · 30-11-2019 8:01pm

Donald Trump wrote: »

Why do you hope it's not possible? Do you want the person to be thrown out on the street and left to die? Would that get your jollies off for you?

Person A has a mortgage but is in a situation where they will likely be on disability benefit for the rest of their lives. The person has no immediate family to speak of.

Some different scenarios:
1) Person B pays their mortgage for them for the rest of their life
2) Person B buys the house and lets person A live there for the rest of their life for the HAP rent. (There is no equity in the house, at least not when other debts are paid)
3) Person A stops paying mortgage and drags out through the courts until evicted and dragged (or wheeled) out by bailiffs by their hair. Then gets put into either a hospice or some other state provided care

Scenario 1 is neither sustainable long term or realistic. person A and Person B are not related and B has never lived in the house etc.

Strange the amount of sneery people who would seem to prefer scenario 3 so that a person who is already dealing with a lot could have the last of their dignity stripped away.

Mod note
Uncivil words removed.
Please refrain from posting this again.

Simply by wouldnt everyone do it then. Why pay for mortgage ever again

Donald Trump · 30-11-2019 8:07pm

handlemaster wrote: »

Simply by wouldnt everyone do it then. Why pay for mortgage ever again

Go to bed if you can't understand simple logic and don't have anything constructive to contribute.

Rows Grower · 30-11-2019 8:13pm

Donald Trump wrote: »

Go to bed if you can't understand simple logic and don't have anything constructive to contribute.

Lol.

Saudades · 30-11-2019 8:45pm

Deleted User wrote: »

one other thing to consider - will the property meet the required standards of the HAP scheme?

Donald Trump wrote: »

What's this related to?

I think it means that you probably won't get assistance for more bedrooms then you need.

So a single person / couple without children won't get social housing or HAP for a 2 or more bedroom home, or a single person / couple with one child won't get social housing or HAP for a 3 bedroom home etc.

RobbingBandit · 30-11-2019 8:52pm

You'll probably have to provide bank statements and undergo means testing in a scenario like this might be worth a chat with local MABS or citizens information office about it.

Donald Trump · 30-11-2019 9:04pm

Saudades wrote: »

I think it means that you probably won't get assistance for more bedrooms then you need.

So a single person / couple without children won't get social housing or HAP for a 2 or more bedroom home, or a single person / couple with one child won't get social housing or HAP for a 3 bedroom home etc.

From what I read this HAP is paid on a per person basis. Therefore the "rent" would not be a market rent for the actual property. That is understood now. However it is better than nothing and I did not see any conditions on what a person could and could not rent. For example, I didn't see anything saying that a single person could not rent a 2 bedroom place. However this was one of the things that I came on here to try to find out.

I gave three scenarios above. The default is that scenario 3 happens. Scenario 2 is more sustainable than scenario 1. Either way, in a few years, the person will likely not own that house still because, through no fault of their own, their income will never reach a level where they can pay the (very reasonable and normal) mortgage (<1k a month). "Downsizing" is not an option either as there is effectively no equity in the house.

Some people appear to think that scenario 3 is the best for society - else there is apparently no reason for anyone to pay a mortgage. I don't know if those people were let fall on their heads as babies too often or if too much ingestion of illegal substances has fried the lonely neurons they might have once had.

The Student · 30-11-2019 9:28pm

Donald Trump wrote: »

From what I read this HAP is paid on a per person basis. Therefore the "rent" would not be a market rent for the actual property. That is understood now. However it is better than nothing and I did not see any conditions on what a person could and could not rent. For example, I didn't see anything saying that a single person could not rent a 2 bedroom place. However this was one of the things that I came on here to try to find out.

I gave three scenarios above. The default is that scenario 3 happens. Scenario 2 is more sustainable than scenario 1. Either way, in a few years, the person will likely not own that house still because, through no fault of their own, their income will never reach a level where they can pay the (very reasonable and normal) mortgage (<1k a month). "Downsizing" is not an option either as there is effectively no equity in the house.

Some people appear to think that scenario 3 is the best for society - else there is apparently no reason for anyone to pay a mortgage. I don't know if those people were let fall on their heads as babies too often or if too much ingestion of illegal substances has fried the lonely neurons they might have once had.

If you rent a property at substantially below market rent (I assume this is a three bed with a single occupant and you are renting at HAP levels then the tenant may have a tax liability for benefit in kind.

Donald Trump · 30-11-2019 9:31pm

The Student wrote: »

If you rent a property at substantially below market rent (I assume this is a three bed with a single occupant and you ate renting at HAP levels then the tenant may have a tax liability for benefit in kind.

Hmmmm. But surely it could be rented as a room then in a three bed where you'd "intend" to rent out the other two beds....but sure just never get around to finding suitable tenants...)

The Student · 30-11-2019 9:40pm

Donald Trump wrote: »

Hmmmm. But surely it could be rented as a room then in a three bed where you'd "intend" to rent out the other two beds....but sure just never get around to finding suitable tenants...)

Good luck with that if or when Revenue contact you. You do realize that the RTB share all info with Revenue automatically. In the current housing situation the defense of not finding someone suitable most likely will not be accepted by Revenue.

Donald Trump · 30-11-2019 9:42pm

The Student wrote: »

Good luck with that if or when Revenue contact you. You do realize that the RTB share all info with Revenue automatically. In the current housing situation the defense of not finding someone suitable most likely will not be accepted by Revenue.

Well I just remembered the HAP would be less in that case anyway.

Perhaps the best thing to do then would be to charge, at least on paper, the person near market rent even though it would be above HAP levels.

The system is ****ed up with it can't facilitate a person trying to help someone else (and in the process potentially saving the system a lot of money)

Gumbo · 30-11-2019 9:48pm

Donald Trump wrote: »

Well I just remembered the HAP would be less in that case anyway.

Perhaps the best thing to do then would be to charge, at least on paper, the person near market rent even though it would be above HAP levels.

The system is ****ed up with it can't facilitate a person trying to help someone else (and in the process potentially saving the system a lot of money)

The figure on paper is what the tax payable would be calculated from.
Sounds like you may be looking for ways to flaunt a system here so please thread carefully, on thread and in reality.

Thread will be monitored and any sign of illegal advice will activate a thread lock.

Donald Trump · 30-11-2019 10:05pm

kceire wrote: »

The figure on paper is what the tax payable would be calculated from.
Sounds like you may be looking for ways to flaunt a system here so please thread carefully, on thread and in reality.

Thread will be monitored and any sign of illegal advice will activate a thread lock.

No. I don't know how it could be "flaunting a system".

I gave three scenarios.

Scenario 3 is the default
Scenario 1 is not feasible long term
Scenario 2 is potentially feasible due to a friend who will help out at their own cost.

Scenario 2 saves the state money, creditors get repaid and the individual does not get their life disrupted. Asking the question is no more flaunting the system than a person coming on to say "my abusive partner beat the shite out of me. I can't afford to rent on my own. How do I get into a womens refuge". If you think it is flaunting the system, then please advise how it could be. The sick person has no income other than disability allowance and no prospect of getting off same in the foreseeable future. They have no family able or willing to help.

There is also a good link on the first page for a charity that apparently does this for people. Perhaps they should be reported for "flaunting the system"?

The Student · 30-11-2019 10:18pm

Donald Trump wrote: »

No. I don't know how it could be "flaunting a system".

I gave three scenarios.

Scenario 3 is the default
Scenario 1 is not feasible long term
Scenario 2 is potentially feasible due to a friend who will help out at their own cost.

Scenario 2 saves the state money, creditors get repaid and the individual does not get their life disrupted. Asking the question is no more flaunting the system than a person coming on to say "my abusive partner beat the shite out of me. I can't afford to rent on my own. How do I get into a womens refuge". If you think it is flaunting the system, then please advise how it could be. The sick person has no income other than disability allowance and no prospect of getting off same in the foreseeable future. They have no family able or willing to help.

There is also a good link on the first page for a charity that apparently does this for people. Perhaps they should be reported for "flaunting the system"?

You may not agree with the current system but you have to accept it. I would suggest you make yourself familiar with all aspects of property rental from RTA requirements, licensee laws and tax laws before you proceed.

With the current housing crisis any bending of the rules no matter how worthy you may think it is on an individual basis is still wrong and with that comes quite harsh and severe penalties.

I would suggest you heed the moderators advice.

Donald Trump · 30-11-2019 10:42pm

The Student wrote: »

You may not agree with the current system but you have to accept it. I would suggest you make yourself familiar with all aspects of property rental from RTA requirements, licensee laws and tax laws before you proceed.

With the current housing crisis any bending of the rules no matter how worthy you may think it is on an individual basis is still wrong and with that comes quite harsh and severe penalties.

I would suggest you heed the moderators advice.

I suggest you read my question slower and understand that nobody is talking about bending any rules. I am asking whether it is possible (i.e. what the rules are), and what would need to be done to make it possible (i.e. to abide by rules).

If you don't know the answer, then thanks for your contribution but it is only adding noise to the thread. which you are free to do as you wish but it won't be helping me

Gumbo · 30-11-2019 10:49pm

Donald Trump wrote: »

No. I don't know how it could be "flaunting a system".

I gave three scenarios.

Scenario 3 is the default
Scenario 1 is not feasible long term
Scenario 2 is potentially feasible due to a friend who will help out at their own cost.

Scenario 2 saves the state money, creditors get repaid and the individual does not get their life disrupted. Asking the question is no more flaunting the system than a person coming on to say "my abusive partner beat the shite out of me. I can't afford to rent on my own. How do I get into a womens refuge". If you think it is flaunting the system, then please advise how it could be. The sick person has no income other than disability allowance and no prospect of getting off same in the foreseeable future. They have no family able or willing to help.

There is also a good link on the first page for a charity that apparently does this for people. Perhaps they should be reported for "flaunting the system"?

Mod Note

This exact post is what I am referring to. You cannot flaunt the system and pretend to be renting a room.

Donald Trump wrote: »

Hmmmm. But surely it could be rented as a room then in a three bed where you'd "intend" to rent out the other two beds....but sure just never get around to finding suitable tenants...)

Now, again. On thread warning for any advice that involves bending or attempting to bend the law will not be tolerated.

The Student · 30-11-2019 10:55pm

Donald Trump wrote: »

I suggest you read my question slower and understand that nobody is talking about bending any rules. I am asking whether it is possible (i.e. what the rules are), and what would need to be done to make it possible (i.e. to abide by rules).

If you don't know the answer, then thanks for your contribution but it is only adding noise to the thread. which you are free to do as you wish but it won't be helping me

I have offered you assistance on your post. You suggested charging rent on paper that was not the actual rent. This is bending the rules.

I highlighted the issues you need to be aware of and the risks associated. Your condescending tone of "read my question slower" is enough for me to bow out of this thread.

davindub · 30-11-2019 11:24pm

Unless op you are renting to a sibling or similar (arms length rules) there is no CAT charge for the beneficiary by charging less than market rate.

Donald Trump · 01-12-2019 12:16am

The Student wrote: »

I have offered you assistance on your post. You suggested charging rent on paper that was not the actual rent. This is bending the rules.

I highlighted the issues you need to be aware of and the risks associated. Your condescending tone of "read my question slower" is enough for me to bow out of this thread.

It cannot be a "benefit in kind". That is when your employer gives you something in addition to, or lieu of, salary. Forgive my tone as I was annoyed by earlier posters.

I assume you meant to say they might be liable for a "gift tax" however the poster above says that there would be no CAT due.

handlemaster · 01-12-2019 9:08am

Donald Trump wrote: »

Go to bed if you can't understand simple logic and don't have anything constructive to contribute.

You are not asking a question anymore you just want everyone to agree with you. Read up on the law regarding HAP and in general how someone can obtain social housing . Breaking the law is not permitted no matter how you want to twist it. The aggressive replies you give show you are of poor character, try and be more civil in your replies.

RiseToMe · 01-12-2019 9:20am

In respect to the poster who asked about if the property would be in a condition suitable for HAP. There are strict criteria for social housing that must be met with respect to minimum renting standards, so you would need to bring the property in line with these, if not already, in order to make your preferred option work

Donald Trump · 03-12-2019 12:16am

handlemaster wrote: »

You are not asking a question anymore you just want everyone to agree with you. Read up on the law regarding HAP and in general how someone can obtain social housing . Breaking the law is not permitted no matter how you want to twist it. The aggressive replies you give show you are of poor character, try and be more civil in your replies.

As I said there are three scenarios. The person is ill and disabled and unable to work. They only have disability allowance. That is fact and isn't going to change. They won't own their house in a few years regardless of what else happens.

The first scenario (that some kind soul is located who pays the ill persons mortgage for the rest of their life) is unrealistic.

The third scenario is the default - that as the ill person has nowhere to go, they stay in the house until they are dragged, or as I said - wheeled, out of the house by bailiffs after a few years of not paying mortgage. Under this scenario there will be no equity to pay existing unsecured creditors and they can eat their losses. After eviction, the state will necessarily need to provide safe accommodation - lets say a conservative 1500 a month. (Or maybe you'd protest against that too....perhaps you'd want the ill person to be wheeled in under a bridge and left there with a cardboard box?)

The second scenario is that some kind soul buys the house now, the equity is used to pay off creditors and the new owner allows the ill person to stay in their home for HAP rent which would cost the state about 500 a month.

But for you, you won't want to pay your own mortgage if scenario 2 happens. It's kind of weird to be honest. So the current creditors lose their money. And it will cost the state 1k more per month compared to scenario 2 to house the ill person.
The question then springs to mind as to how much extra you'd be willing to have the state pay just so you could know that an ill and disabled person lost some of the last remnants of their dignity by being dragged out of their home? Is there even a price to it for you? If scenario 3 was going to cost the state a million a month more would it still be worth it to you?

"of poor character". Good man. We'll buy you a mirror

03-12-2019 8:09am

I thought you were the home owner, but are you the kind soul looking to buy the house and checking to see if the state will pay the rent afterwards?

Surely this is a conversation to be had with the relevant local authority, I’m sure the current owner’s mind would be more at ease if the LA confirmed their stance before the house sale. Any advice here is just opinion, it’s up to the LA to decide.

Rows Grower · 03-12-2019 9:59am

He might be covered under his mortgage protection insurance.

It would be great if he was, I'd feel like a superhero.

Gumbo · 03-12-2019 10:19am

Rows Grower wrote: »

He might be covered under his mortgage protection insurance.

.

Good call, OP has your "friend " checked this out?

Donald Trump · 03-12-2019 4:03pm

Rows Grower wrote: »

He might be covered under his mortgage protection insurance.

It would be great if he was, I'd feel like a superhero.

To the best of my knowledge that was exhausted years ago. I think that it was limited to 6 months.

Del2005 · 04-12-2019 6:17am

The person would need to be on the housing list to get HAP and you can't get on that when you own a home. Where will the person live while they are out of the house and waiting for HAP to be provided, if they qualify for it?

As other have said HAP requires the property to meet current building regulations, everything else requires the property to meet regulations when it was built, so if the house is anyway old the cost to get it up to HAP standard will be massive. Will the house even be suitable for them if they do stay there?

The person needs to see their community welfare officer to see what support they'll get.

listermint · 04-12-2019 7:05am

So someone gets to live in 'their' house and their friend gets a mortgage paid off by the state.

Let me guess. The house will be sold at below market value too

Dreamer

Donald Trump · 04-12-2019 11:00am

listermint wrote: »

So someone gets to live in 'their' house and their friend gets a mortgage paid off by the state.

Let me guess. The house will be sold at below market value too

Dreamer

Are you another one who'd prefer to see the disabled person dragged out of their house
Weird people on here alright!

I'll ask you the same question that I asked the other poster then - how much of an extra cost to the state would it be worth to you to see it happen? 1k a month, 2k a month or would the schadenfreude just be priceless.

The person same who will buy the house can buy it anyway afterward the eviction and instead rent it for the full rent. Do you understand the concept of how renting works? A person buys a piece of property and then allows another person to use it in exchange for money.

Donald Trump · 04-12-2019 11:02am

Del2005 wrote: »

The person would need to be on the housing list to get HAP and you can't get on that when you own a home. Where will the person live while they are out of the house and waiting for HAP to be provided, if they qualify for it?

The first bit was the reason I posted here as I thought someone would know if things would need to be done in a certain order to be more streamlined.

The second bit was included in what I outlined in that I thought I said that the new owner would allow the person to stay there while being assessed.

Is it possible to buy house and rent it to previous owner under HAP etc?

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