Council Guarantee Bonds are useless

by Readers Question

12:26 PM, 8th December 2014
About 5 years ago

Council Guarantee Bonds are useless

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Council Guarantee Bonds are useless

I let a property out to a tenant who had no deposit but had a guarantee bond provided from the council. Council Guarantee Bonds are useless

This bond covers damage up to a certain amount and contains helpful clauses such as ………..

“The council will use all reasonable endeavours to ensure that the tenant is fully advised of her responsibilities as a tenant. The Council is committed to work towards resolving any difficulties between the Landlord and tenant by negotiation where possible and may assist in matters relating to the tenancy if the Landlord so requests.”

As an extra protection I added an extra clause to the tenancy agreement where the tenant authorised information sharing with the Landlord and did NOT want the Data Protection Act (DPA) applied.

Then one day the council stopped paying her Housing Benefit to me so I phoned them up and they told me they can’t discuss anything because of the Data Protection Act! Hang on a mo I said, luckily for me I’ve got one of your bond thingies and an authorisation to discuss from my tenant.

I sent them their bond and the tenancy agreement opting out of the DPA and was referred through various different department and officers but they all are still just blindly quoting the DPA and refusing to discuss anything or help me at all.

A couple of weeks later the tenant is just plainly avoiding me, arrears are mounting up (past the bonded amount) and S21 and S8 notices are now served but the council still refuse to speak to me.

Can they do this?

Can all the their helpful promises in their bond all be cancelled out just by the Data Protection Act?

Thanks for reading.

Regards

Ronanch



Comments

Jessie Jones

16:39 PM, 8th December 2014
About 5 years ago

Ronanch,
I am sorry that you are having difficulties with the HB office regarding the Data Protection Act.
In the future you might like to try an alternative approach; Draft a separate document for the tenant to agree, authorising the HB Office to discuss her HB claim with you to keep you informed of any changes to her HB claim and reasons for them.
As a stand-alone document it would be less likely to attract the view that your AST has an unfair clause, notwithstanding that you will have achieved the same goals.
Your tenant cannot 'waive' their rights under any Act. And it is the HB Office who must comply with the provisions of the Act, not the tenant.
Really this is only a matter of wording, but legal people make a lot more money than Landlords, often over just a few words.

Janet Carnochan

18:19 PM, 8th December 2014
About 5 years ago

I have used the bond system a couple of times. In my area the bond cannot be claimed on for unpaid rent, it can only be claimed on for damage. Didn't have any hassle claiming for the damage. However I have only ever had 2 DSS tenants and have been left out of pocket by both. Now won't touch them, as I have enough hassle without that.

Simon M

19:34 PM, 8th December 2014
About 5 years ago

Ronanch,

Housing & Housing Benefit are different departments. Where HB is paid to a landlord, some HB departments ask the tenant to agree to sharing HB claim information with their landlord - but this is part of the HB claim process - and your tenant may not have agreed. Councils have been penalised for breaches of Data Protection, so the rules are drilled into the staff and if your tenant didn't tick the box, she has instructed the HB Department NOT to give you information about her HB claim. The HB Dept may not have access to the bond in Housing, and any instruction on the HB claim will take precedence anyway - and may post-date the bond. The tenant would need to provide a new written instruction for the HB claim to be discussed with you.

As a BTL landlord I also wouldn't trust a bond scheme, as it will have been approved by the Council's legal counsel, and will commit them as far as they're prepared to go and no further. The bond is against damage not unpaid rent, so you only have their assurance they'll undertake reasonable endeavours for anything else.

From the purpose of your posting you appear to be happy to keep the tenant - even now - if you were receiving the rent including all unpaid rent? This may now be your strongest argument with the Council. I'd contact Housing Dept, explain the tenant's HB used to be paid direct to you, it's stopped and you can't find out why from the tenant or the HB department. So, although the tenant has been OK you have reasonable costs to meet you have been left with no choice but to commence proceedings to evict. If this can't be sorted out, the Housing team will shortly have another homeless person or family to rehouse. It's in their interest to help you keep the tenant.

Housing should then contact the HB team to find out why HB is no longer being paid - as explained above they may still not tell you. If the tenant is still entitled to HB, they should work with the tenant to try to reinstate payments, and if not because the tenant has enough money they may be able to encourage tenant to pay you. Housing Dept should recognise this is a constructive approach and you might find a more helpful response.

Alan Loughlin

19:51 PM, 8th December 2014
About 5 years ago

my point exactly, give them all a miss.

Jason J&C Partnership

8:24 AM, 9th December 2014
About 5 years ago

Unless I missed it - what Council was it?
I had a similar experience where Rochford Council in Essex over a 9 month period and who behaved in a bi-polar manner and passed me around departments, did not share information but expected to get it from me and quoted policy and process at me countless times
I also felt like I was the enemy and owed more to them than just assisting them discharge their responsibilities.
Can we 'Name and Shame' the Councils (and Tenants but that might be a step too far), who mess landlords about and take us for mugs?

Mark Alexander

8:31 AM, 9th December 2014
About 5 years ago

Reply to the comment left by "Jason J&C Partnership" at "09/12/2014 - 08:24":

I am happy for Councils to be named and shamed PROVIDING comments are posted in your own name and that Councils are notified by you and offered a right of reply.
.

Roanch 21

9:18 AM, 9th December 2014
About 5 years ago

Mark, I will do that once this is resolved.

In the meantime I made an official complaint against them for obstructing me. Result was the Chief Exec has emailed me and asked me not to contact them any more. It looks like the whole of Housing dept and HB dept will be unavailable for a week whilst they deal with this. The thing is I do have genuine issues with other HB tenants and bonds and can see that these emails have not been read or acknowledged for several days, which is yet more examples of obstruction. Any one else been black balled by their council? It annoys me how heir bond contract uses words like reasonable, endeavour, committed, negotiated to describe how they will approach any difficulties I may have.

I know - I should have avoided HB tenants / council bonds. And I will in future. Here's the email from Chief Exec .....

Dear R,
I refer to various emails which you have sent to a number of Council staff during the last few days. I note they concern your tenancy agreement, information regarding your tenant and issues of data protection.
Please be advised that the relevant officers are collating information relating to your concerns to enable the Council to provide you with a co-ordinated response to the matters you have raised. I intend to have this response sent to you by the end of next week (12 December 2014).
I would like to take this opportunity to assure you that I do appreciate the urgency of the situation. I would however ask that you please refrain from emailing or telephoning Council officers so that we may concentrate our efforts on assisting you by investigating each issue fully so that we may provide you with a substantive response within the stated timescale.
Yours sincerely,
Chief Executive

r01

16:12 PM, 9th December 2014
About 5 years ago

Councils can and do release information Ronanch - for example: https://forms.torbay.gov.uk/AuthorityToDisclose

Check with the relevant council to see if they have such a form and if so, question why they are being so "flipping" (feel free to insert your own substitute word), difficult.

R

Jamie M

22:30 PM, 9th December 2014
About 5 years ago

They are fobbing you off. They only understand one thing, Being held to account, shamed, pointed out, uncovered, pain and discomfort, how ever you describe it. Take them to court and they will pay, Because! they don't want to be in the spotlight, show up to be as utterly useless and dishonest as they are AND if they lose its NOT THEIR MONEY, its ours!
Good luck

Roanch 21

18:51 PM, 12th December 2014
About 5 years ago

An update.

A few weeks ago I was notified that Hb was stopped for one of my tenants on direct payment. I tried to contact tenant over the weekend but got no response (they can be damn good at avoiding you). On Monday I phoned the council just to find out why the HB was stopped, just normal common sense relevant questions - did she forget to sign on etc, is she working, in prison, dead, won the lottery etc and if they knew if she had abandoned tenancy or moved elsewhere. The sort of thing that would take up just a 3 minute simple conversation. BUT they couldn't discuss anything at all with me, despite their bond promising committed helpful endeavours to negotiate and resolve any issues and despite the tenants written authorisation to speak to me. The Benefits Manager was particularly rude and obstinate so I made a complaint that she was deliberately obstructing me and today I got an apology ....

"....I can only apologise for the inconvenience you have experienced by the approach previously taken....Please clarify the information you still require so the Council can consider the disclosure of these without further delay. Please email this to the Benefits Manager.....Yours sincerely .... Assistant Director, Customer Services"

They spent exactly 4 weeks, and wasted countless taxpayer resources including Dept Heads, Legal team, Directors, and Chief Executive. Just to obstruct me in my simple request.

Thank you all for your interest and help.

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