sharing rent with a dss tenant?

lagwagon

Hi all

God, not been on here in so long but I have some questions that hopefully someone can answer!?

Im moving out soon and me and my friend are looking at places. We have put a holding fee down on a house and just need references etc which fingers crossed should be fine.

The problem/question is. She would be claiming DSS and I wouldnt. Is this possible? The rent is £500 pcm and apparently she can get £275 pcm off this. We were then going to half the rest of the rent.

Im quite skeptical you are able to do this but she is 100% on it. I just need to know if this before I sign the dotted line and have my name on the flat.

So any takers?

Jowo_2

Is your friend on benefits, such as Job Seekers Allowance or ESA?

You can check the LHA rate for the postcode and type of property she is eligible for (shared room rate quite possibly if she's under 25 or sharing a property) on the LHA Direct website. You can model her benefits entitlement on the 'Entitled to' website.

I don't know if she will just be awarded her share of the rent (£250) rather than simply being given the maximum rate if this is her contractual obligation - the bods on the benefit board will know whether the local council will limit it to her actual exposure rather than just blindly hand over the maximum capped rate.

Tenants who find rent cheaper than their LHA allowance can keep the first £15 difference but this is something that's likely to get withdrawn in the future.

Many landlords don't accept tenants who claim Local Housing Allowance or will only do so if there is a guarantor. I assume the agent has said this won't be a problem?

As it's a joint tenancy, you remain jointly and severally liable, and operates like there is only a single tenant there (meaning that if your friend defaults for whatever reason, say her LHA payment is late) you are held equally responsible? The Shelter website offers good info on how joint tenancies operate.

I also don't understand the bit about her paying half towards the remaining sum of £225 after the contribution by LHA? Do you mean she will be subsidising 50% your share of the rent out of her benefits and finding an additional £25 per week? I may have misunderstood you but I can't understand how if she gets £65 JSA, she can then afford to buy food and pay towards the bills with the remaining £40.

Have you sat down and worked out the total cost of all the other expenses and if this is manageable - council tax, energy, telecoms/broadband, insurance, water, etc? There's a budget spreadsheet on the tools section that will help.

lagwagon

Thanks Jowo for the reply.

Yes my friend is on quite a lot of benefits but exactly which ones Im not 100% sure. I know that in total she gets about £850 p/m just now from various departments but I dont like to pry to much.

We have looked at other houses and a guarantor has came up but this one doesn't need a guarantor. The agent accepts DSS.

Silly question but what does LHA stand for??

She really needs someone to move out with her, I couldnt afford full rent so she said that until Im out of the debt situation that Im in then she will help out by paying some of the bills and whatnot. Im not too keen on the whole idea if Im honest with the DSS idea due to reading several horror stories online and I dont want to end up holding the baby as such.

Im going today to speak to the Citizens advice bureau.

Jowo_2

Local Housing Allowance - it's the replacement for Housing Benefit. The local council website or the Shelter website will explain best how it operates. Unlike HB, which it replaces, quite often the tenant receives the LHA directly, not the landlord. The landlord only recieves the LHA directly if the local council determine the tenant is vulnerable and can't manage their money.

Have you checked the terms of the refund of the holding deposit or admin fees you've paid the agent? You've indicated you have debts so you may not get the tenancy if you fail the credit check. Do you have CCJs?

Now is the time for you to pry to understand what type benefits she gets to understand if they are ones that are likely to be subject to review/change and what actual disposable income she has to determine what she can afford. For example, all claimants currently receiving Incapacity Benefit are being ported over to ESA which is resulting in most being required to seek employment and put on JSA. It's not common for a single person to get £200+ per week unless they have some kind of sickness or disability benefit or I wonder if she has factored in the LHA rate she is entitled to and this rolled it into this.

Make sure you understand the pros and cons of a joint tenancy and that you thoroughly sort out and administer all household bills to ensure there are no disputes. We get quite a lot of posts here from newby tenants who don't understand how joint tenancies work, whose flatmates abscond without paying rent or bills, whose relationships breakdown. This has nothing to do with the source of income for the rent (benefits, student grants or employment) and everything to do with the fact that some do not understand their responsibilities and can't honour a contract.

Personally I don't think its fair for your friend to subsidise your expenses out of her benefits because of your personal financial problems. You're worried about being exploited because she's on benefits but are happy for her to pick up your tab. Most tenancies operate with people splitting everything equally or setting the proportion of the rent on bedroom size. Go to the Debt Free wanabee board and post a statement of accounts there so they can help you tackle your debts and sort out a repayment schedule you can afford without otheres having to sub you. Much better to treat the root cause than just deal with the symptoms.

Good luck, hope you enjoy your flat.

lagwagon

Ah I didnt realise they had changed the name.

On looking up the websites the now though. The holding fee would get paid back if we fail credit checks or references. Im just awaiting my bank statements and Ill find out where I stand.

Ive already been on the debt free boards a while back and my debt is now more manageable. My friend actually said to me that she would half the rent so it wasn't even my idea on that one. She is looking for a job just now though and will be going to college in September so I know that the situation just now will be vastly different in a few months time.

Jowo_2

They haven't just changed the name, they changed the entire way it operates. Housing Benefit still exists for social housing tenants and those private tenants who were on it before LHA was introduced only transfer from HB to LHA when their tenancies are renewed or they ask to.

It is imperative you find out what kind of benefits she is on, particularly as you say she intends to go to college in September which will be halfway through your tenancy. Generally, unless a student receives DLA or has children, full time students do not tend to receive means tested benefits. Therefore, depending on what she is claiming, she may experience a huge drop in income and could struggle with the bills if she works part-time and isn't eligible for a decent student loan or grant to cover the shortfall.

In Sept, it looks like her minimum outgoings will be £500 + per month composed approximately of £250 rent, £50 council tax, £15 water, £15 telecoms/broadband, £30 energy, £150 food and this excludes travel costs, social expenses, haircuts. Realistically her income needs to be around £800 net which is hard to achieve through part time working.

It is unwise for you to enter into a tenancy until you understand how she can pay the rent now, and then how she can pay the rent when she becomes a student. Now is not the time for her to be vague or for you to be shy to broach the subject.