Checks needed for DSS / LHA tenant?

by Readers Question

13:53 PM, 19th January 2015
About 6 years ago

Checks needed for DSS / LHA tenant?

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Checks needed for DSS / LHA tenant?

Hi everyone,

I have found a family that I want to rent my house to and they will be claiming the local LHA allowance for a 4 bedroom property in North London. Currently they are in temporary accommodation as they were made homeless due to previous landlord wishing to sell the property they were in. Checks needed for DSS LHA tenant

Now my question is; does anyone know the best procedure to safe guard myself when letting my property to them?

For example my understanding is that we will sign the AST but will not know for certain what rent the council will pay her untill they make a housing benefit claim and I am supposed to go with them when they do this. Is it right that any shortfall will be made up by the tenant as top up?

I understand they have a rough estimate of the claim but its not exact.

In my instance the 4 bed LHA rate is £1,667 per month which the family tell me they should get most of due to their circumstances. My worry was that if I get the AST signed and take their 1 month deposit (which I will safeguard), will I be up sh*t creek if there benefit claim backfires and they dont get it or get much less ???

I really like the family and I dont get any bad feeling from them but that can sometimes be a sign to take extra care!!

Any advice about safety checks or standard procedures when dealing in the DSS/LHA market would be greatly appreciated as I really could do without messing up!

Many thanks

Cheers

Joel Herne



Comments

Jonathan Clarke

8:46 AM, 5th June 2019
About A year ago

Reply to the comment left by Jerry Jones at 05/06/2019 - 08:34
Yes thanks .
I`m not sure where Amelia`s under 3 rule came from though

It goes like this ....................

You can generally claim for 1 bedroom for each of the following:

you - and a partner if claiming as a couple
each other couple (only if you claim HB)
each other person aged 16 or over (even if part of a couple if you claim UC)
2 children under 16 of the same sex
2 children under 10 of any sex
any other child under 16

SimonR

12:24 PM, 6th June 2019
About A year ago

The one thing you need to remember is LHA is paid in arrears so you will also need your tenants to pay the first months rent in advance as well.

SimonR

12:27 PM, 6th June 2019
About A year ago

Reply to the comment left by Graham Durkin at 19/01/2015 - 17:29
You can no longer increase the deposit, all deposits are now capped at 5 weeks for rent up to £50k pa and 6 weeks for rents over £50k pa

SimonR

12:35 PM, 6th June 2019
About A year ago

Reply to the comment left by Nick De Jongh at 21/01/2015 - 09:27
Rules around Section 21s have changed and you now cannot serve the notice with in the first 6 months, been this way for quite some time now

ahloughlin@gmail.com

12:45 PM, 6th June 2019
About A year ago

I never ever take on any benefit claimants. There are clear risks here, you could seriously regret this. Walk away while you can.

Jonathan Clarke

14:06 PM, 6th June 2019
About A year ago

Reply to the comment left by at 06/06/2019 - 12:45
Clear risks with all tenants though . HB is a perfectly viable business model if you understand it
Private tenants can lose their job overnight . Bridgend car workers are a topical example of this . Many landlords will be worried tonight because of the announcement today about 1500 job losses there . The government HB pays the going rate come what may though . Its just the processes which are sometimes cumbersome if not understood

tony tony

16:39 PM, 6th June 2019
About A year ago

Reply to the comment left by Alan Loughlin at 19/01/2015 - 17:03
there is nothing wrong with lha tenants as long as you know what your doing ive got all lha tenants and have been doing this over 20 years ,ive got 20 plus houses and only ever put 2 people out in that time , booth due to the universal credit not lha

reader

12:10 PM, 7th June 2019
About A year ago

Why bother with all these risks unless you can afford for it to go wrong?
LHA tenants come in many forms but the accommodated by the local council carry the biggest risk. Will the same council issue a bond and guarantee the rent and other obligations?

Jonathan Clarke

13:37 PM, 7th June 2019
About A year ago

Reply to the comment left by at 07/06/2019 - 12:10
I bothered with the risks because I used to make getting on for twice as much money in the LHA market place than with working tenants . Clearly those of us that do embark on a LHA strategy do it for money not for love . I used the 2 x 2 strategy and also got the 2 bed rate for a studio flat. I work out the risks then reduce them accordingly to the best of my ability . It requires educating oneself on the mechanics of the HB rules and regs . Its not for everyone of course but for those who understand it it can be very profitable
I do both LHA and private so I experience both tenant profiles . I`ve done this for 20 years so I`ve worked out the risk profile for each tenant type and each property I invest in . I would have abandoned LHA 19 years ago if it didn`t work. My council gives me RIA and the deposit and guarantees any shortfall for a period with DHP. Its underwritten by the government in effect

tony tony

14:14 PM, 7th June 2019
About A year ago

Reply to the comment left by at 07/06/2019 - 12:10
if you work with the housing aid department they will do that for you

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