Not sure what to do

Accidental_Landlord_1

Hi there, I am a long time member but have chosen to change my name to post this as I could be identified by my username/avatar.

As my name suggests, I became a landlord without really planning it, I am following all the proper rules, have mortgage lender permission etc and am a registered landlord but I am out of my depth.

My tenant has been renting from me for 10 months and has been a good tenant paying rent on time for the most part but her circumstances have now changed and she has been made redundant. She is under 25 (just) and after 6 weeks had been assessed as only being entitled to £55 per week LHA and approx £55 per week JSA.

This gives her the grand total of £420 per 4 week period and out of that she has to pay

Rent - £350
C/T - £75
Electricity - £25 (approx)
Food - ?????

The rent was due on 28 July and has not been received yet and the next rent is due on 28 August. So at the moment she is nearly 3 weeks late with rent - I had said that I would not be unreasonable and would wait until LHA was received as she had been told verbally that she would qualify but obviously that isn't the case.

She has offered to pay me £165 tomorrow as that is what she has received for LHA which leaves a short fall of £185.

This is where I am out of my depth - my "business head" says I should give her an AT6 notice to quit but my "people head" says I should bide my time and hope that she receives a discretionary housing payment.

I know that there is no guarantee that she will receive this and have no idea how long this would take. I can't afford to subsidise her to the tune of what would be £130 a month until she finds a job. I know she is applying for EVERY job available but there have been major layoffs in all local industries recently and jobs are VERY thin on the ground.

So, if you have got this far (well done) my question is, should I give her notice to quit or should I bide my time for a few weeks in the hope that she receives a discretionary housing payment.

Maybe now would be a good time to mention this is Scotland.

ognum

I would give notice to quit and then recind if she is able to continue to pay rent, sadly you are in buisness not a charity.

Accidental_Landlord_1

I don't even know the legalities of this - can you do that? I just can't get my head round the fact that I would be kicking her when she is down but I know that shouldn't come in to it. I feel terrible taking the £165 off her tomorrow but the mortgage needs to be paid but am worrying that this will leave her without food. I am considering making up a small parcel of basics but can't decide if thats nice or cheeky? I am not loaded by any stretch of the imagination and am not making money out of the situation but I would like to think that someone would help me out if I was stuck.

ognum

Sorry I am not up on the legalities so dont hold me to my suggestion. Does your tenant have family? He/she should ave savings for this eventuality.
I know you are being kind and if I was your tenant I would consider myself lucky BUT you do have to consider this as a buisness arrangement.
If you can sit down and discuss and talk about your mortgage repayments and while you are happy to help her out in the very short term you cannot fund her long term. She/He may be happy to get out of the tenancy and live more cheaply elsewhere.
There are a limited number od other peoples issues that you can make your own!

Accidental_Landlord_1

That is very true ognum and I thank you for your input. Much the same as what my husband says lol. That's just my nature I suppose. I will speak to her tomorrow and see how the land lies.

maginot

As she is under 25 she will be unable to live on her own. The housing benefit would be for shared accommodation, so she will need to move out. You have seen her benefits entitlement and she cannot afford to pay you rent. You would need to start eviction proceedings and get someone else in.

Accidental_Landlord_1

:(I know, I know.

I've even been looking to see on flatshare/roomate etc for her to see what is available - my husband thinks I am potty.

Am going to go to bed now and brew it all over I think.

Thanks for reading and all advice really is gratefully received:D

Werdnal

You seem far too have become far to emotionally involved to be a effective landlord. I appreciate it is hard to have to evict someone who is struggling with rent through no fault of their own, but sadly this is all part of the letting game. You are not responsible for finding alternative accomodation, although there is no harm in making some suggestions to her.

When does her fixed term end?

I take it you have a deposit? You could probably use this to make up for some of the lost rent when she leaves.

Try to remain rational and not get drawn into the tenant's problems. You need to do whatever is best for you and your property, not worry about the tenant here. I know it seems harsh hitting someone when they are down, but she is young, and will bounce back from this. I am sure she will understand you cannot continue to house her if the rent is not being met.

[Deleted User]

The above advice is very sound. With the changes to LHA entitlement, which is set up for your tenant to live in a room rather than a flat.., she just can't afford to stay in your property. And as u say, if jobs are thin on the ground, I'm afraid she may need to look a relocating as well as looking for different type of accommodation.

It might be worth talking to your tenant about this, Explain you can't afford to fund her given the circumstances, that it might actually be better for her if she relocates rather than building up debts where she is. If nothing else, I assume she has family she can go back to if the situation is absolutely dire. Remember u are not the only person she can turn to., and she shouldn't be living off you. You have no responsibility towards her at all, however kind you are. You let that property for a reason.., as a business proposition.

socrates

maginot wrote: »

As she is under 25 she will be unable to live on her own. The housing benefit would be for shared accommodation, so she will need to move out.

Absolute rubbish Housing Benefit pay an allowance based on a room rate or shared accommodation - where a tenant lives is - up to them - as long as they can afford the rent - be it 1 room or 10 so this is not a reason for eviction or a clause to stand by.

In simple terms to the OP start proceedings to evict but I would stick to LandlordZone.com for your quesrtions on this subject - there is a specific section for LHA/HB queries.

Accidental_Landlord_1

I have been mulling all this over and have decided to speak to her today with a view to issuing her an AT6 notice to quit. I am happy to let her go without the months notice and keep the deposit if she is agreeable. If not I will need to jusy bide my time until her notice ends and hope she doesn't decide to sit tight.

I suppose this highlight the problems of becoming an accidental landlord. We felt like we hadn't had a choice but to go down this route as the flat was too small to live in with a small baby on the 3rd floor and bought another property with only one mortgage on both properties. This then caused it's own problems because our lender would not let us sell the flat at a reduced rate as this would leave us under their required LTV by 1%. So I think this is why I struggle to treat it as a business. I am totally out of my depth and am worried sick that I could make someone homeless.

Lesson learned I think - don't lease to under 25's and perhaps use a letting agent next time.

It would all be so much easier if we could just put the flat back on the market at a reduced rate and get rid of it - I'm too clucky hearted for this.

Thank you everyone for your input, it is taking the blinkers from my eyes I think and if anyone else has anything to add I would aprreciate it.