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


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Comments

Janet Carnochan

18:01 PM, 20th January 2015
About 6 years ago

Reply to the comment left by "Joel Hearne" at "20/01/2015 - 16:55":

Mick Roberts if I am correct buys houses for 35k each and gets approx. £400 per month. Giving him a return of 13.7% For the value of your house he spreads the risk over many houses and many tenants. I however cannot buy houses in my area for that price and now won't touch HB tenants. The hassle isn't worth the return. Out of two I have been stung twice. The council in my area aren't ogres but they do suspend clams. I am still outstanding rent from a tenant who is long gone, she was too lazy to sign on so kept getting her claim suspended. When I got fed up and served an eviction notice she never ever sorted her claim out as why should she as the money would only come to me. Hence I never got the money. I now rent to working families only who I credit check.

Graham Durkin

18:20 PM, 20th January 2015
About 6 years ago

Reply to the comment left by "Joel Hearne" at "20/01/2015 - 16:55":

Joel ,whatever we say good or bad its your decision that counts ,reading your posts its clear you want these tenants ,well take them, all I am saying is try to reduce your exposure if it goes wrong ,as i said because they are classed as homeless the housing dept have a duty to help them. I would still like to get their money as well thereby taking DOUBLE DEPOSIT just in case .My experience with people that have been put in B&B is that they have been EVICTED, the council will put up a deposit for people who are required to leave a property because its being sold as vacant possession is essential for the sale(but if they have a live tenancy they could be seen as making themselves homeless and then the housing depts liabilities change somewhat), but the tenants generally have to find their new residence themselves.As mentioned by others H/B tenants can be hard work ,if your up for it then go for it but expect the worse then you won,t be taken by surprise .just think of it like this ,
I had an immersion tank with a central element that needed changing, duly done by a plumber ,temperature set, Economy 7 happy days .got a call 3 weeks later not working ,remove metal cap and found temperature setting changed to MAX therefore it tripped out ,luckily it reset ,but when I asked the tenants who took the cap off and changed the setting ,they all swore blind that they never touched so I said I must have come down and changed it just so i could revisit.Wasted 2 hours of my time,Please let us know how you get on

Joel Hearne

22:07 PM, 20th January 2015
About 6 years ago

Hi,

I do appreciate your comments and experiences and I do take on board your points. Because I have a 4 bed property the council tenant does seem a good long term choice to rent to a family unit if it is hassle free so I am going to try it and see what happens. I will update to let you know. Mick Roberts rules, wow, what a yield! Still I guess he is just lucky to be in the right part of the UK. The yield I am getting in London is 7% so I cant complain.

Nick De Jongh

9:27 AM, 21st January 2015
About 6 years ago

Just a little trick I picked up over the years. Once the Tennant has signed the TA serve them with a notice 21 three days later and make the contract for only 6 months. If they do not pay their rent you have one months rent plus the deposit, so by the time you can apply for possession you have lost nothing (Two months notice required). You then get the hearing date around 6 weeks later and 2 weeks notice by the court so they are out in 8. This way you reduce the risk, you further put pressure from the beginning on the tenant to keep up with the rent or they will be out. HB tenants are renown for not paying because the council pay them direct and they spend the money. Good luck and as a lot of people said 'BEWARE' I have lost over £8000 in the last year thanks to HB tenants and now refuse to take any. Only heard of the above trick at the last procession hearing a week ago.

tony tony

10:02 AM, 21st January 2015
About 6 years ago

Reply to the comment left by "Peter Johnson" at "19/01/2015 - 18:23":

if they have 3 children over ten dose not make them elegable for 4 bed rate , i think you should look into this more closely or you will end up with the 3 bed rate, 2 children of the same sex are expected to share the same bedroom untill they are 16, so unless one is 16 and the other 2 are different sex and over 10 you wont get it

tony tony

10:08 AM, 21st January 2015
About 6 years ago

Reply to the comment left by "Ian Ringrose" at "19/01/2015 - 22:02":

if you had known the l.h.a. system you could of got your rent , the problem with most peeps is they dont understand how to go about getting things like overlap payments , which the councill would of payed you if you had got your tennant to sign a letter stating certain criteria

tony tony

10:12 AM, 21st January 2015
About 6 years ago

Reply to the comment left by "Nick De Jongh" at "21/01/2015 - 09:27":

why didn't you get the council to pay you direct?

Graham Durkin

11:47 AM, 21st January 2015
About 6 years ago

Reply to the comment left by "tony salmon" at "21/01/2015 - 10:12":

When i now issue a TENANCY AGREEMENT I always write an additional clause stating that this Tenancy is only offered on the understanding that the RENT is paid DIRECT TO ME , all of my tenants prefer this method as it take the issue of handing over the rent personally when other bills need paying.

Nick De Jongh

14:46 PM, 21st January 2015
About 6 years ago

The Local authority only pays the landlord direct after they are 8 weeks in arrears. The HB fell short and the tenant was in and out of employment. Very few Local Authorities pay the landlord direct. None of the London Borough I dealt with do.

Graham Durkin

15:09 PM, 21st January 2015
About 6 years ago

Reply to the comment left by "Nick De Jongh" at "21/01/2015 - 14:46":

I totally agree with your first point,however if you request a vulnerability form(around 7xpages) this is an approved method of direct payment to the Landlord. I believe the introduction of UNIVERSAL CREDIT nationwide will create the biggest problem for PRIVATE SECTOR LANDLORDS as yet again the payments will mainly go direct to the tenants in the majority of cases .The local authority will then be paying more out in B&B than before cos the landlords are fed up of non paying tenants. regarding my extra clause ,if i don,t get the nod to receive payment then i find another tenant.As we all know LOCAL AUTHORITYS have a very difficult job trying to get private landlord on-side and it will get even harder in the future .

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