How do we go about this?

Kantankrus_Mare

This time last year we bought a property to rent out.

A young couple took on the tenancy and moved in.

Approx 3 months later they split up and the girl moved out leaving the young man on his own.

He has kept up to date with the rent but is struggling.

He has asked if it is ok to move a friend of his in who is unemployed and would get housing benefit.

I have no problem with this as long as the rent is met every month and they are causing no bother to neighbours but Im not sure what happens in this situation.

Does his housing benefit get paid straight to us as landlords or does he get the money and sort his rent out hisself.?


Any advice would be appreciated.

Thanks.

Werdnal

Housing benefit changed a few years ago, so it is now paid direct to the claimant, and they pass on to the LL. They do not always get 100% paid by HB, so have to make up the difference themselves. If they do not pay you, after 2 months you can apply for it to be paid direct, but this takes time.

I have let to several HB claimants, and only had problems with one who defaulted on rent, preferring to pay it to the landlord of his local pub instead of me!

You could always allow your existing tenant to "sub-let" to his friend. Friend would then pay his rent to existing tenant, and tenant pass whole amount to you.

BitterAndTwisted

Friend would not be able to claim without their name being on the tenancy agreement.

OP, please have a look on your Local Authority's website and check what the LHA (Local Housing Allowance) rates are. The tenant's friend might have difficulty claiming the whole of their share of the rent and would have to find any shortfall out of their JSA or savings if they have any.

birduk

Ah but the tenant is currently stuggling to pay on his own right? But he is paying? So anyone on housing benefit (even if not the whole amount) would help him meet the full rent? Hopefully he would help his mate out with the bit he can't manage (IYSWIM). So ultimately you have more chance of getting your rent?

Kantankrus_Mare

Our tenant has told my husband that his friend will get £300 housing benefit so the plan is for our tenant to pay the shortfall (rents is £440) but cover all bills which in theory sounds like a good plan.

We will have to meet and discuss this all with tenants friend and no doubt set up a new tenancy agreement.

Thanks for all replies.

Benji

The 'friend' can be your tenants lodger to simplify things. This gives much more flexibility if friend decides not to pay or otherwise proves unsuitable (and means you don't have to do anything).

Friend will still need to prove to the Housing Benefit department that he has a rent liability, but he doesn't need a 'tenancy' agreement for that. A simple letter from 'Tenant' to 'Friend' telling him what he must pay and how often will suffice - although a 'lodger agreement' can be got from Smiths for around a tenner. That saves a lot of 'he said' discussions.