Housing benefit, legal implications

Apple_2

Some insurers ( building ins ) refuse insurance if the tenants are on benefits. Argue the rights and wrongs with the insurance companies. From the landlords point of view, if the tenants were paying their rent via salary and subsequently go on to benefits, then the buildings insurance becomes invalid. Full stop. It's a breach of the terms and conditions of the policy.

Try arguing with the insurance company that ' it shouldn't be ' when you come to make a claim.

That makes it the landlords business in my book - his property is uninsured. If he/she doesn't even know it, it's even worse.

msmicawber

I would tend to agree with Apple that if the landlord breaches the terms of their insurance contract, then it gives the insurance company the opportunity not to pay out in the event of a claim. Insurance companies are slippery enough at the best of times.

However, I don't see what a landlord could do about a change of circumstances other than to ensure that there's a clause in the tenancy agreement to say that the tenant must inform the landlord if they apply for (or intend to apply for) housing benefit. If there is such a clause and the tenant doesn't inform the landlord, then it is the tenant who would be in breach of their tenancy agreement and the landlord could ask them to leave. The landlord can also then argue with the insurance company that he/she had taken all reasonable steps to ensure that the insurance terms weren't breached, I would have thought.

On a personal note, I find it deeply depressing that despite always having paid my rent and bills, been a good neighbour and a responsible tenant and mother, I constantly come up against this sort of bias. I was refused two properties that I tried to rent a couple of years ago because I was in receipt of HB. I was told both times by the landlords that they had had problems with tenants in the past not paying rent (one did a moonlight flit and left the property damaged). However, both landlords admitted that those tenants hadn't been in receipt of HB, but said they weren't taking the risk again. I was baffled, since they hadn't taken the risk in the first place and I came complete with good references. Hey ho - maybe I'm a greater subsidence risk or something!!

real1314

The simple fact is that insurance companies base their quotes on "Risk". The facts that they use to differentiate between risks and the charges they levy are based on the facts that make the most difference and are within the law.

So: they don't ask what colour socks you wear, because there's no difference between people who wear different coloured socks (in general)

They do ask what sort of income you have, because this does affect risk - people with jobs have more to lose by damaging property etc as they can be pursued more readily and can have an attachment of earnings. With people in receipt of benefits this is more difficult / less likely to succeed (again - in general).
This might not be fair on individuals, but it is "fair" across the group selected - just like it's "fair" to charge men higher car insurance because men, in general, have more accidents.


Now, the sticky issue could be that people with disabilities or people from some ethnic groups may be more likely to be on benefits. Could this then be construed as indirect discrimination?

Chrysalis

disagree real1314, most landlords refuse claimants because of the percieved reputation and the reasons pointed here because they legally have to for their insurance/mortgage but many find that after having benefit tenants they are pleasantly surprised by how they are more reliable then people who pay from salary. You also have to bear in mind its also possible to be working on a low salary and claiming housing benefit, would this void insurance t&c, they are playing a game in that its just another clause they can sneak in to avoid payouts nothing to do with risk.

peter999

pbradley936 wrote:

Hi Everyone,

Some of us on another thread want to know the legal implications of a landlord not knowing that their tenants are claiming Housing Benefit. Here is a post I made on the thread:-

"Some people may not be aware that if a tenant is on HB the property insurance is a lot higher. Unless the landlord wants the hassle of changing the premium then it is easier just to decline such tenants. Not sure what the legal implications would be if Landlord not aware of the situation and had HB tenant then needed to claim."

Nonsense.

The landlord just declares it as a rental property.
Landlords do not tell the insurance company details of each tenant
& when tenants change.

You can sign on & off JSA, Housing Benefit, any benefit for short periods,
people's circumstances change.

Landlords have no way of checking things other than before you take up tenancy,
when they ask questions, check how you look, take references & deposit.

You sign a rental agreement with landlord to PAY RENT, that's the end of it.
.

Mrs_pbradley936

peter999 wrote:

Nonsense.

The landlord just declares it as a rental property.
Landlords do not tell the insurance company details of each tenant
& when tenants change.

You can sign on & off JSA, Housing Benefit, any benefit for short periods,
people's circumstances change.

Landlords have no way of checking things other than before you take up tenancy,
when they ask questions, check how you look, take references & deposit.

You sign a rental agreement with landlord to PAY RENT, that's the end of it.
.

It is far from nonsense the premium for a property with a working tenant is 385.88 the same property with a tenant claiming benefit is 427.88

peter999

pbradley936 wrote:

It is far from nonsense the premium for a property with a working tenant is 385.88 the same property with a tenant claiming benefit is 427.88

A tenant has no obligation to tell a landlord they are claiming benefit before or during a tenancy.

Therefore I cannot see the insurer's question being determinant in any claim,
other than being a general question to finetune a policy quotation,
based on knowledge the landlord has at the time.

The determinant issue will be whether you the owner lives there
or the property is rented out.

The issue of a few pounds on insurance over a year, based on what a tenant tells you
at the beginning of a tenancy, is not going to determine which tenants you take,
if you had any sense.

Professional landlords do not worry about minute details like this,
they want their properties rented out earning money.

References + Deposit + Rent paid

peter999

Mrs_pbradley936

peter999 wrote:

Therefore I cannot see
peter999

It would appear that like the rest us us you do not know. Rather than insult us all and imply that we are making it up or or worse could you perhaps do your own research if you would like to add something constructive? The purpose of the thread is to find out the legal implications.

peter999

pbradley936 wrote:

It would appear that like the rest us us you do not know. Rather than insult us all and imply that we are making it up or or worse could you perhaps do your own research if you would like to add something constructive? The purpose of the thread is to find out the legal implications.

It's not an insult, it's obvious.

Once your tenant moves in, you do not control him.
The following day/week/month he can sign on benefit.

Insurance policies are based on what you know & control.

Insurance companies would like to ask you a million questions.
Every single question can be used to finetune an insurance quotation
and assess the risk.

Whether the questions are relevant, valid, legitimate to the policy
or legal is another matter.

But the correct answer to each question will NOT determine the validity
of the policy, some will, some won't.

peter999

Chrysalis

peter999 wrote:

A tenant has no obligation to tell a landlord they are claiming benefit before or during a tenancy.

Therefore I cannot see the insurer's question being determinant in any claim,
other than being a general question to finetune a policy quotation,
based on knowledge the landlord has at the time.

The determinant issue will be whether you the owner lives there
or the property is rented out.

The issue of a few pounds on insurance over a year, based on what a tenant tells you
at the beginning of a tenancy, is not going to determine which tenants you take,
if you had any sense.

Professional landlords do not worry about minute details like this,
they want their properties rented out earning money.

References + Deposit + Rent paid

peter999

thats very true, the difference showed was only £40 as well about 10% a very low amount.