Can I operate tenants bank account for them with permission?

by Readers Question

3 years ago

Can I operate tenants bank account for them with permission?

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Can I operate tenants bank account for them with permission?

As some of you know, I’m pretty experienced in Housing Benefit …. well I think I am! ha ha.

The letter below basically explains my question to you all, as I was gonna’ ring the bank, but the robots in India won’t have a clue.

And then I thought Property118.com – There’s usually always someone on there with a useful opinion – some fools that haven’t got a clue, but some that do genuinely know or have had the experience.

Further to my letter/question below, would we then be able to change the address to one of my offices, so that I get bank statements, new cards etc.?

“Dear HSBC,

Can you confirm for me if it is perfectly legal for a tenant of mine to open a bank account to get her Housing Benefit paid into, to use this account just for Housing Benefit, & for the tenant to then give the Landlord the cash card & pin number for him to deduct the Housing benefit amounts ie. £470 every 4 weeks, out the bank machine in the wall?

If he has a full permission letter from the tenant saying he can use bank card & number to withdraw the Housing benefit money to pay the rent on the Landlords house she is living in?

She wishes to do this, as getting the Housing Benefit paid into her bank where all other direct debits are going out, is getting her into a mess & sometimes the Housing Benefit money is being used to pay other bills, so she is then short of funds to pay her rent.

So a separate bank account, where she has no access, as she also gets temptation to spend the money, would massively benefit her.

Any queries, please call me.

Yours sincerely,

Mick”cash

Comments

Neil Patterson

3 years ago

Hi Mick,

There is nothing to stop a person opening a bank account and giving their pin and card to a third party.

However they would be contravening the Bank's T&Cs and if anything went wrong for any reason the bank would not cover the customer.

Also you as the recipient would be in danger of accusations (wrongly) of fraud and theft.

The Only way a Bank would agree to assist is by opening up a joint account with the tenant that they also had access to.

In short do not do it Mick.

Neil Patterson

3 years ago

PS Then changing the address would only be acceptable on a joint account and would need to be your main residence if it is not a business account as they will want proof of address for you as well.

If you try to do any of this without the Bank's consent you will be in deep do dos

Mark Alexander

3 years ago

Hi Mick

I can see what you are trying to achieve but this isn't the way to go about it.

The tenant could close the account or cancel the card at any time and there would be nothing you could do about it.

What you need to look into is Credit Unions - here a link to one in Nottingham >>> http://www.nottinghamcu.co.uk/

Arrange to meet them, tell them about your dilemma (pretty much guaranteed they will know about it anyway as they will all be targeting landlords and tenants to set up accounts when Universal Credit comes in) and ask them to explain "Jam Jar Accounts " to you.

Effectively, what they are able to do is what our granny did with jam jars to manage their house-keeping. They have an account which benefits are paid into but money to cover vital bills are ring fenced (e.g. rent, gas. electricity) leaving only the remainder available for withdrawal.

I'm certainly no expert on this so please don't ask me any more questions about it because the above is about the extent of my knowledge at this stage.

Good luck and please report back on how you get on with your meeting.
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Mark Alexander

3 years ago

UPDATE

Here's the page you need to read Mick >>> http://www.nottinghamcu.co.uk/rent-direct/

And here's more info about Jam Jar accounts >>> http://www.usal.org.uk/jamjaraccount.php

Oh I do love Google! 🙂
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Demelza Martin

3 years ago

When I had a tenant in this position she agreed that the Housing Benefit was paid direct to me. You need her to contact the Council for the necessary permissions.
I know a landlord who only accepts tenants who agree to this.

Mick Roberts

3 years ago

I like it when the posh guys give me advice-Makes me wanna break the rules ha ha.
No, seriously, I do listen to people of knowledge, so keep telling me.

Yes fair points, & also the joint account thing sounds good.

Yes closing the account, not a problem, as I’d be no worse off than when I first started.
Yes I know about credit unions, use to be a £5 charge every month, & for some that’s not a lot of money, but times that by a few houses x 12 months & that’s some ski holidays.

Yes, I know about direct payments, this one’s a bit of a protest from me. Plus this council contact every year to review the direct payment & it’s my way of sticking two fingers up at them.

Michael Barnes

3 years ago

Anything where you are involved sounds like potential trouble to me (accusations of theft/fraud, etc).

Why not just get the tenant to set up the account and transfer the money to you every 4 weeks (either manually or by standing order)?

If it changes to Universal Credit, then it could all be paid in there with rent going straight to you and the rest going tio the 'regular' account.
(I presume that part of the problem is that others have the ability to dip into the other account, such as payday lenders?)

Sally T

3 years ago

Surely your tenant could set up a standing order to go straight into your account on the day their benefits are paid. It would actually be more effective as you can only draw £300 a day from a cash machine so the tenant would still have time to go in the bank and remove the rest.

Mick Roberts

3 years ago

Standing Orders with HB tenants not as straight forward as it sounds.

If for some reason the HB doesn’t go in-And it doesn’t sometimes, the bank then tries to send to me, depending on what account, the tenant gets charged.
This also the same if TV license, Sky TV, Spa day etc. direct debit goes out same day HB goes in, tenant gets charged if standing order tries to come to me.

Unless of course, tenant has a cushion in there, which quite often they don’t.

This particular council pay every 2 weeks, so below the £300 a day-Although some have £500 a day, others less.

I’m all ears, but have seen it all in 16 years of doing HB, I will try anything & often have, same with this bank card thing, trying a new avenue.

Mark Leach

3 years ago

Putting up two fingers doesn't work. The council employees get paid for their time! The answers simple your tenant asks H/B to pay direct to you and they do. I have several tenants who have difficulty managing their money and rent payments and I never have a problem with Brighton Counil
Best
Mark Leach

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