Reference Housing Benefit Tenant

pda

Hi,

I am thinking of taking on a tenant that is on housing benefit and currently lives in shared accommodation (mother and baby unit). Does anyone recommend a company to do a reference check? I was going to use RentGuard via OpenRent but they said they will only really focus on the guarantor.

Thanks

MEM62

Based on the information you have provided I am going to assume that the potential tenant is not working and in receipt of benefits. Therefore, other than any public record such as CCJ's etc, there is nothing to check other than references from previous landlords if any are available. (And references are, in my opinion, worthless at best) The tenant is unlikely to pass the affordability checks linked to any assurance scheme for the rent so its boils down to your call.

I am an accidental landlord. My tenant is a single mother, not working. I have a guarantor in the form of her mother although the tenant does have some assets via an inheritance. I have to say she is a good as gold. Rent is always paid on time and she is keeping the property in immaculate condition.

pmlindyloo

If it were me the first thing I would do is check what the local housing allowance is for the property - you can do this through the local council website.

I am presuming that the tenant would be a single mother with a baby? if so, then she would be entitled to the two bed rate. Checking would tell you whether the rent is covered by HB or whether she will need to provide a 'top up'. Rent arrears are more often than not caused when a 'top up' has to be paid.

It may be possible, if the tenant is vulnerable, to have the rent (housing benefit) paid directly directly to you. You should speak to the prospective tenant about this. If a 'top up' is involved then a DD or SO should be set up.

Is a deposit being provided? Is a guarantor being provided?

The other thing I would do, if you accept the tenant, is only to have a 6 month's tenancy contract rather than a longer one in case things go 'belly up'.

Plus, I would arrange inspections regularly - after the first 3 months for example.

I am not suggesting that she will not be a good tenant and pay her rent on time. Things do go wrong so my inclination for any new tenant would be to put these safeguards in place.

Oh, and have you checked your mortgage/buildings insurance allow you to rent to tenants on HB?

pda

Thanks for the responses.

I checked and she will get enough to pay the full rent so no shortfall. She said council will pay the deposit and 1st months rent then its down to her to continue the payments (Universal Credit). I will confirm all this when I speak to the council.

I didn't think about the mortage, thanks I'll check.

Cakeguts

It sounds as if you haven't let to tenants in receipt of universal credit before? The risks you run are these. You have a young person (?) with a baby. The universal credit is paid to the tenant and they have to pay you out of the money going into their account. How much do you think this tenant is going to spend out of the sum of money paid to them by universal credit on the baby? You will have to judge if they can resist the temptation to buy lots of toys and baby items with your rent money. Is there a guarantor?

There are landlords who are experienced at letting to tenants getting universal credit and know all the pitfalls. You might want to ask yourself if you want the amount of hassle you could get if this goes wrong.

silvercar

Cakeguts wrote: »

It sounds as if you haven't let to tenants in receipt of universal credit before? The risks you run are these. You have a young person (?) with a baby. The universal credit is paid to the tenant and they have to pay you out of the money going into their account. How much do you think this tenant is going to spend out of the sum of money paid to them by universal credit on the baby? You will have to judge if they can resist the temptation to buy lots of toys and baby items with your rent money. Is there a guarantor?

There are landlords who are experienced at letting to tenants getting universal credit and know all the pitfalls. You might want to ask yourself if you want the amount of hassle you could get if this goes wrong.

A very negative view. You could just as easily ask, how likely is the mother likely to risk making herself homeless with a baby? She is more likely to prioritise paying the rent to avoid such a situation.

teddysmum

silvercar wrote: »

A very negative view. You could just as easily ask, how likely is the mother likely to risk making herself homeless with a baby? She is more likely to prioritise paying the rent to avoid such a situation.

She could have the attitude that a council wouldn't risk making someone with a vulnerable child homeless, so would help out if she fell short or could know how to play the game and drag out any eviction (plenty of tv programmes to encourage).

Cakeguts

silvercar wrote: »

A very negative view. You could just as easily ask, how likely is the mother likely to risk making herself homeless with a baby? She is more likely to prioritise paying the rent to avoid such a situation.

I would say that it doesn't matter because the mother will know that even if she doesn't pay the rent her local housing authority will have a duty to house her because of the child. So the mother doesn't really have a lot to lose by spending the rent money on the baby. There have been problems with people paying housing benefit from universal credit. That is why I would suggest that someone leaves letting to people on universal credit to the landlords who have this business model.

I don't think many people would be happy to issue a section 21 or section 8 notice to a single mother with a baby. A landlord with experience in letting to people on universal credit like this case would probably handle the letting in such a way that the section 21 would be the last resort after a lot of intervention. If you haven't had this experience you could have a rough time.