Renting to the council

mattygg

Hi all,

I have a couple of questions and i was wondering whether anyone could help me. I currently have a property which i am looking at renting out to the council. I have looked on their website and it appears that the LHA for a 3 bed house in my area is about £750 a month. If i did rent to the council would i be looking at receiving all that amount or is that just the maximum they could offer.

Secondly, would i need to get any special kind of insurance (apart from buildings/contents cover).

Lastly, how do utility bills work, would they stay in my name as i am the house owner, or would they be transfered to the council, or would the tennants have them put into their names.

Thanks for any help

Matt

adouglasmhor

Would you not be renting to a tennant and the council paying it, rather than renting to the council?

VIGILANT22

mattygg

If this property is mortgaged, you would have to provide proof to he council from your lender that you either have a buy to let mortgage or consent to let......

clutton_2

your naive questions show that you know very little about the laws applying to landlords - over 100 Statutes and regulations apply

for a start - read the first sticky thread on this section about tenants rights and see what you can learn there

then join national landlords association - joining fee tax deductible and it gets you cheaper insurance premiums - and learn how to be a landlord


and put the house with an agent who is a member of ARLA

you dont know what you doing and renting to LHA tenants is an utter nightmare

renting to the council directly is only for the VERY faint-hearted..... i am a LL of 11 years and would never consider it....

search LHA on here

an d read www.landlordzone.co.uk forums to get an idea of what you may be embarking on

Jowo_2

Are you talking about a private sector letting scheme that your local council runs to encourage private landlords to lease their properties to them for 3 or 5 year period? This is where the council then lets the property out to their own tenants on their waiting list and the landlord is guaranteed rent for the whole period and the property is managed by the council.

Because if it is, make sure you understand why you are more likely to get it back in a trashed condition and that the council may put the risks/costs back onto you more than in a conventional rental arrangement. Typically they refuse to pay compensation for the state of the decoration, including floor coverings, plus they may have a clause where they can terminate the letting early or extend it at will but the landlord isn't allowed to make any changes to the duration.

I spent nearly two months fixing up a property for a friend let out this way to Brighton and Hove council under their private sector leasing scheme who shrugged off more than 30+ complaints of anti-social behaviour by the last tenants and did not sort out basic repairs, despite the contract stipulating they must do so.

The council did not bring to the landlord's attention that the tenant kept pets, installed a satellite dish, painted a bedroom (but only around the wardrobes, not behind...), fitted 9 shelves (badly), that the bathroom fan had stopped working, the bath leaked, the tenants had punched through most of the internal doors, ripped off the door/window fittings such as locks, stays and hinges, a window was smashed, the chimney had been boarded up, the garden was full of rubbish, every room's wooden floor was heavily scratched, the garden shed lock was smashed, a window ventilation fan was ripped off, and the front door lock key was missing.

This is the condition in which the council handed back the property to my friend, many months after the lease should have ended because the tenants refused to move out and the council did not think they'd be able to evict them through the local courts because children were involved and the judge would have to abide by human rights legislation. To cap it all, it appears one of the tenants may have been housed there after being newly released from prison for a serious offence which required them to be monitored after their release.

Letting out a property to the council on a private sector lease is very risky - the council won't give a damn because its not their stock and they can shove into it the type of people who they are obliged to house but would rather not occupy their social housing stock with a secure tenancy, like drug addicts,alcoholics, newly released prisoners and other social services cases.

The council, relieved at finding a landlord dumb enough to sign a contract which puts the risk back onto them, will then fill it with a benefit claimant who is disappointed that they haven't got a council property and resent the short-term contract they have in a private property. For them, its just temporary housing and as they don't pay a penny towards the rent and can't be held responsible for the cost of the damage, they range from careless to truly negligent in their use of the property.

so you have an apathetic council renting out the property to a social inadequate - this means an expensive disaster for the landlord. don't rent out a private property to a local council or housing association unless you don't mind having to spend most of the rent you receive in restoring it back to a habitable condition. In the case of my friend, the costs were more than 7k (about a years rental income).

brighton and hove council temporary housing. brighton and hove council private sector leasing scheme. brighton and hove council private letting scheme.

mattygg

I believe i was talking about the private sector lending scheme, i wasnt too sure on the name. I have a meeting with the council next week so see where i stand and to get some information, hence why i have asked for opinions and views on here before i decide whether to rent private/LHA

I have spoken to my mortgage company (C&G) and they stated that as long as the fees from my rental income exceed my mortgage then they would be happy for me to rent the property out which is a bonus. I will be trying to get that in writing too.

Does anyone have any answers for the other questions I asked regarding insurance and bills.

Thanks in advance

Matt

00ec25

you would need landlords insurance , which will be heavily weighted if you go rent under the council scheme, for the reasons stated by Jowo

gas and electric usage would always be tenant responsiblity - they control its useage they pay it

council tax may be yours or theirs, depends how the contract is worded

water - depends if you have a meter (in which case make sure the contract treats it as a tenant responsibility like the gas/electric) or if you are on a water rate (in which case depends on the contract as the old fashioned approach is to make the LL liable, modern LL make the tenant liable)

I echo the previous comments, you have a lot to learn and you cannot have a risk free ride by simply getting on the council scheme, you could end up seriously out of pocket or even in court for failing to abide by LL legislation

you are presumably equally ignorant about the tax you will pay on your income, especially how to treat the mortgage cost. HMRC can easily find out about rented properties in your proposed situation so do not think about tax evasion either

clutton_2

many lenders will not allow landlords to rent to a council... as then the lender loses control.. if the Tenancy agreement is between the mortgage-holder and the tenant then the Lender can still , theoretically, exercise some control....

did you bother to do any reading matty?

mattygg

I have a few more questions if anyone can help.

Can anyone who has a bit of experience in this area let me know the proceedures for this. What I would have to do (apart from electric and gas certificates). Also what would i be liable for in the house, as opposed to the council.

Lastly, do they work out the average rent in the area and offer a certain percentage of that, or do they offer the full LHA benefit outright.

Thanks

Matt

Fire_Fox

mattygg wrote: »

I believe i was talking about the private sector lending scheme, i wasnt too sure on the name. I have a meeting with the council next week so see where i stand and to get some information, hence why i have asked for opinions and views on here before i decide whether to rent private/LHA

I have spoken to my mortgage company (C&G) and they stated that as long as the fees from my rental income exceed my mortgage then they would be happy for me to rent the property out which is a bonus. I will be trying to get that in writing too.

Does anyone have any answers for the other questions I asked regarding insurance and bills.

Thanks in advance

Matt

If you do not even know the name of the scheme, IMO you need to make better friends with Google. As already advised you need to apply for consent to lease from your lender, not a quick chat and 'trying' to get it in writing. Your questions about insurance and bills are so basic that you shouldn't be starting a thread to ask them, join a landlord's association or use the search function.

mattygg wrote: »

I have a few more questions if anyone can help.

Can anyone who has a bit of experience in this area let me know the proceedures for this. What I would have to do (apart from electric and gas certificates). Also what would i be liable for in the house, as opposed to the council.

Lastly, do they work out the average rent in the area and offer a certain percentage of that, or do they offer the full LHA benefit outright.

Thanks

Matt

Which part of Clutton (a professional landlord) advising you to join a landlord's association did you not understand? If you bothered to follow the advice you have already been given your questions would be redundant.

clutton_2

at least take the time to read www.landlordzone.co.uk

employ a letting agent to let the property for you, whilst you can then spend 6 months reading and learning about the business

after that... you will say "no way do i want to let the council have access to my property"

this board is very willing to help those who want to help themselves also....

you are clearly motivated by the high LHA rates in your area... nothing wrong with that as long as you know what you are doing.

But until you do some reading for yourself.. you are one of many many naive amateurs who come here hoping for 6 "tips" on how to make a lot of money from Buy To Let......

it does not work like that