How does DSS work for a landlord?

England83

Thanks for your replies. We have her permission to do a credit check on her. Which we are going to do. She currently receives housing benefits of 125 a week and is moving out of the family home eith her children due to a divorce. I believe she doesn't work due to health problems and has 3 children, its a 3 bed house. She has the £575 deposit waiting but says she cannot get the first month up front. Our last tenant received benefits but we didn't have a problem with her paying. We stupidly said we'd let her give us the deposit when she got it back from her previous landlord but that never materialised. Unfortunately due to the area the house is in I think we are only going to get people on benefits. We've had a lot of replies and arranged 6 viewings but out of those 6 only 2 showed up. The first viewing we haven't heard back from and the second, the lady in question is desperate for it. We refuse to go through an agent again as to be honest they were useless and took 10 per cent a month for doing nothing.

England83

What if we asked for a guarantor?

HappyMJ

England83 wrote: »

What if we asked for a guarantor?

You will need to credit check and do an affordability calculation on the guarantor too. Could the guarantor afford all of their own mortgage expenses and the tenants rents on top as well. If the guarantor is willing to do that then they should also be able to lend the tenant the first months rent. As soon as another month of rent is late you must be calling the guarantor for payment and be willing to evict and take both the tenant and guarantor to court to get your money owed. If the guarantor owns a house and has refused to pay any court judgements you could get a charge on their property and it may be a very long time before you actually see any money.

gayleanne

I would definitely ask for a guarantor, the guarantor would also need to have a credit and reference check, and hopefully be a home owner.

I think it is an idiotic idea, to take on a tenant that has not got the first months rent and deposit up front. Once they are in your property what will happen if, they say "Oh I am not paying any rent now", it can, and does happen, as the rent is paid to the tenant, to give to the landlord, how can you be sure that the tenant will pay you every month?

Sorry but you asked for advice, and we are giving you advice, but you still seem to be set on what you want to do. I can see you back on this site in a few months, saying HOW DO I EVICT MY TENANT!!

England83

gayleanne wrote: »

Sorry but you asked for advice, and we are giving you advice, but you still seem to be set on what you want to do. I can see you back on this site in a few months, saying HOW DO I EVICT MY TENANT!!

Err when did I say we were set on it, I am asking advice, a what if situation. I really don't think there's any need for your rudeness. I never once had a go at anyone giving me their advice and wasnt rude to anyone so your comment was totally uncalled for. I'm grateful for the advice I have been given I really just wanted to know how the benefits system works before we make any decisions.

gayleanne

England83 wrote: »

Err when did I say we were set on it, I am asking advice, a hat if situation. I really don't think there's any need for your rudeness. I never once had a go at anyone giving me their advice and wasnt rude to anyone so your comment was totally uncalled for. I'm grateful for the advice I have been giving I really just wanted to know how the benefits system works before we make any decisions.

I am certainly not being rude. You don't seem to understand the benefit system, you will not be paid the rent, the tenant will, the tenant then pays it to you, if the tenant then decides that they do not want to pay you, it will cost you a heck of a lot of money, and usually up to a year, to get a single mother and 3 kids out of your property, and during that time your mortgage will still have to be paid. It is not until the tenant has 2 months of arrears, that you can ask the LHA to pay you directly. And they do not pay arrears.

We are asking you to make sure that you do everything legally, such as putting the deposit into a proper account, and making sure that the tenant will be able to pay for this property. Usually when a mother with 3 kids, divorces the father, it is the mother that stays in the house not the father. Have you asked the tenant why she has to move out. This would have put me on alert straight away.

If you read through this forum you will find landlord after landlord, that has let to a tenant, because they seemed desperate, and they felt sorry for them, and in the end it has cost the landlords thousands, some have even had there houses repossessed, because they have not been able to pay the mortgage.

England83

No I don't understand the benefits system which is obviously why I'm on here asking for advice... I didn't know it was paid to the tenant unless of extreme reasons, I do now...

I am grateful for everyone's comments I just found your last paragraph offensive when I didn't once say I was set on the idea or was ungrateful for any advice which you seemed to imply. At the end of my tether over the situation so you can see why I am looking for advice. I don't know if she's moving out or they're both moving out she had a current partner with her at viewing I really just wanted advice on how the benefits work.

HappyMJ

England83 wrote: »

Err when did I say we were set on it, I am asking advice, a what if situation. I really don't think there's any need for your rudeness. I never once had a go at anyone giving me their advice and wasnt rude to anyone so your comment was totally uncalled for. I'm grateful for the advice I have been given I really just wanted to know how the benefits system works before we make any decisions.

Also be aware that some landlords have had to pay the housing benefit back to the council that they have received directly as the tenant may have failed to notify the council of a change in circumstances such as a new partner not thinking that the rent is automatically being paid by benefits. The council demand that you pay everything back for a mistake which is not yours. If the tenant gets the money first before forwarding to you then you don't have to pay it back...so basically what I'm saying is you will generally have very little to do with the claim at all. All benefits are paid in arrears direct to the tenant. Mistakes and delays are common. Your mortgage is still due....just be careful. Make sure the guarantor has money and can afford their own mortgage and the tenants rent.

nannytone_2

i really dont see what difference it makes.

if the tenant wasnt on benefits, they would still be in a position to NOT pay their rent surely?

just because the LHA goes to the tenant who then pays the landlord ....
how is this different?

if you have a tenant that has no intention of paying their rent, it is irrelevant if they get housing benefit or not

gayleanne

If she is living with a partner that is working, she may not be entitled to LHA.