Why no DSS/LHA ?

bifold

Anubis wrote: »

http://t i ny.cc/bpng3. < retype as the mse filter blocks tiny urls

Rent is income. Additionally if a property is still mortgaged and rented out the mortgage company have to be informed. Insurance can be higher and mortgage repayments can be higher.

It is well known there are many LL who keep things quiet. Having a DSS applicant means that they may not remain anonymous in the system. Someone working paying cash in hand, with no form filling to the DWP is unlikely to compromise the LL, and is therfore less of a risk.

I think you might have something there,I wonder if the ratio of LL evading tax is equal to the number of benefit cheats.

clutton_2

""I wonder if the ratio of LL evading tax is equal to the number of benefit cheats. "" - no one will ever know.... they deserve each other if you ask me !

what i do know is that LLs arears have shot up since LHA went directly to tenants - LHA do regular surveys

Eton_Rifle

Too high risk for me too. It's the first question I ask and an instant deal-breaker.

System

Currently not working due to disability and i rent, never once have i missed a rent payment even when my payments got messed up (i borrowed money so i could pay my rent). Rent is my my top priority even if it means going without other things. I treat the flat with the upmost respect, its my home regardless of whether i pay the rent or not. I hate the fact all DSS people are tarred with the same brush.

I've also lived in student digs and to be honest i find students to be as much of a risk yet LL's are more than happy to let to them?

Benji

Just a few andom thoughts from my website:

Should I accept tenants who claim benefits?

No one can make that decision for you - but there are some risks to consider, and precautions you can take.

Financial Security

Although it is a generalisation, many benefit claiming tenants do not have much in the way of assets or financial reserves. This can result in delayed rent, or even non payment of rent if some other financial problem arises. In the longer term, it means that if you need to pursue a claim for damages or missing rent at the end of the tenancy, there is a high chance that you will not be able to enforce the resultant court order.

Linked to this, for many tenants, is an irregularity of rent payments. Most tenancy agreements reserve rent monthly in advance. Housing Benefit (LHA) is paid 4 weekly in arrears (fortnightly in some areas). This means that the dates rarely match up (monthly rent, 4 weekly LHA) and the amounts for a single payment never match up (annual rent/12, annual LHA/13). For tenants who rely soley on LHA for their rent payment this will also mean that rent is always paid late. Example;


Providing your tenant is entitled to sufficient housing allowance to cover their entire rent (as above) the 13 LHA payments over a 12 month period will equal the 12 rent payments.

You may be asked by your tenant to change your tenancy agreement to 13 x 4 weekly rent periods a year in an attempt to match up rent due and benefits paid. Do not do this - If you needed to evict due to unpaid rent a 4 weekly rent period would prevent you using the mandatory ground 8 in section 8 of the 1988 Housing Act.

You may not be allowed to let

Many providors of landlord insurance will charge an additional amount if you let to benefits claimants. If you let to benefits claimants whilst paying for non-claimants then your insurance is likely to be invalid.
Your lender may have limitations on what type of tenants you can let to.

Your tenants benefit may be stopped

If the council decide to stop paying housing benefit to your tenant, or their situation changes and they are entitled to less, they may not be able to pay their rent. Receipt of Housing Benefit is NOT guaranteed.

What can I do to protect myself?

The first thing to do is to NOT forget to carry out full referencing and credit checks on your tenants. This is likely to show if your tenant has previously defaulted on rent, or any orther recorded debt. If you do these checks yourself, it is worth questioning the 'last but one' landlord. The current landlord may have a vested interest in giving a good reference to get rid of non-paying tenants.

A deposit is essential in all cases. As your tenant is on benefits, they are unlikely to have a large amount available for a deposit - and yet their lack of assets is the very reason you need as large a deposit as possible. It is probably cheaper to wait for a tenant with a suitable deposit than run the risk of a tenant running up a large rent debt, and not being able to obtain a penny through the courts.

A guarantor is also highly advisble. The guarantor will be expected to cover any bills that the tenant can not pay. In view of this, your tenants guarantor should be a creditworthy homeowner, preferably working full time. The guarantor should be credit checked. If the guarantor is a homeowner, they are less likely to move - making them easier to find - and they have an asset that you can place a charge on if a court order is made against them.
Guarantees are very difficult to enforce and it is important to ensure that the document is legally binding. As a rule of thumb, a guarantee that is not witnessed and executed as a deed will not be enforceable in court. This is one area where DIY or internet forms are best avoided - the cost of having a solicitor draft a suitable deed is minimal compared with the potential consequenses of having a guarantee that can not be enforced.

Obtain written permission from the tenant to discuss their Housing Benefit claim with the council.

As soon as the tenant misses a rent payment, notify the council of the fact and request that their payments are made directly to yourself in future. Some councils will do this, however all councils are obliged to do this once the tenant has a minimum of 8 weeks rent unpaid (see section 12)

Eton_Rifle

It's very unfortunate and it's not fair.

It's the statistical risk, it's isn't fair to particular individuals but it's all in the balance of probability. Just like any type of insurance.

ic

My partner's consent to let agreement from the mortgage company (NRAM) specified that the house could not be rented to those on benefits, students or asylum seekers.

Tiglet

My situation pretty much reflects what Jamie11 said.

I took on a tenant on LHA in January. Although the level of benefit didn't cover the whole of the rent, she (or the guarantor) was able to make up the difference. However, she has recently had her benefit reduced and all she pays is what she gets in LHA. I don't know whether the guarantor will cough up the difference, but a few months ago he wasn't able to pay on time, and I'm not relying him paying anything in future.

I've got insurance against this, but only until the end of the year, and it may well take longer than this to regain possession of the flat (the Council will insist that she stays until the Bailiffs kick her out).

This is probably a pretty mild example of what can go wrong - I don't expect she'll trash the place - but I'm still losing money at a time when I can't afford it.

I would say that it's simply not worth renting to people on benefits unless there is a significant premium available to offset the possible losses.

Anubis_2

bifold wrote: »

I think you might have something there,I wonder if the ratio of LL evading tax is equal to the number of benefit cheats.

Hmmm.... Nice come back but lets just say that tax evasion is 120 BILLION and more of ones known.

Benefit fraud is VERY much less - and figures can include admin error and working tax credit overpayments to boost figues, and even then, it is only a very small single figure.

Working people who claim tax credits also fraud the state, just a thought since everyone sees workers as upstanding upright citizens.

I wonder how many honest upright LL there are too. Not many. Case of calling pot, kettle, black.

krisskross

Fact remains that private landlords can let their properties to whomever they like.

If they choose not to rent to people claiming LHA then that is their prerogative. Reading this thread I can't say I blame them.