Is it ‘expected’ for DSS tenants to fail reference check?

by Readers Question

10:11 AM, 29th March 2018
About 9 months ago

Is it ‘expected’ for DSS tenants to fail reference check?

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Is it ‘expected’ for DSS tenants to fail reference check?

I have never had any DSS lets before and this is the first encounter. My estate agent has recommended a DSS tenant to take up tenancy despite the tenant has FAILED reference checks. The reason given was ‘incorrect or incomplete information on application form’ on the reference report.

Obviously spoken to my well-known high street estate agent and was told it is ‘expected’ for DSS tenants to fail reference checks, but the guarantor passed the reference checks, ‘so it is ok to take on this tenant’.

Due to my inexperience with DSS tenants, could someone clarify these points:-

1) is it ‘expected’ for DSS tenants to fail reference check?

2) does it make it OK if the guarantor passed the reference check?

Suggestions or advice needed.

JC



Comments

Luke P

11:24 AM, 29th March 2018
About 9 months ago

Take a *homeowner* guarantor...at least that way they have a difficult-to-part-with-quickly asset and one that can be called upon regardless of their current credit status. I would suggest 95+% of my few hundred benefit tenants would fail credit checks.

Robert Mellors

17:12 PM, 29th March 2018
About 9 months ago

To some extent it is expected that DSS/HB tenants will fail the credit check because quite simply they do not have sufficient income with which to pay the rent (a credit check does not usually take account of Housing Benefit entitlement), and in many cases they may also have a poor credit history. However, it does seem a bit odd that they have failed due to "incorrect or incomplete information on the form" - surely part of your letting agent's job is to ensure that the form is completed fully? Has your letting agent sent you a copy of the credit check/reference check that they had completed for you? If not, ask for a copy of the application forms and also the rejection from the credit/reference checking company, as it sounds to me like your agent may perhaps be incompetent?

In relation to the actual potential tenant, as Luke says, ensure your get a home owning rent guarantor (get evidence of the home ownership, don't just take their word for it), so that if the DSS tenant does default on paying the rent, or if they cause damage, etc, then you can (eventually) recover the debt from the home owner guarantor.

peter thomson

10:29 AM, 31st March 2018
About 9 months ago

Hi
I have extensive experience of D.S.S. the first thing I always do is to ensure a Tenant Information Sharing Agreement is signed and submitted to the local authority. once this is registered you will be allowed to ring or write and ask anything connected to the rent account/ housing benefit all payments come straight into your bank every 4 weeks, the key is to ensure your tenant is entitled to claim the award granted and there are no other factors which can reduce that award,
with my present tenant I have received payments for almost 2 years and never had one missed. Its guaranteed money and in some instances I've had problems with working people. If you can get a guarantor all the better. I will always get authorisation to speak with the local authority and ask if there have been any payments stopped previously at the outset. In the event off a claim being suspended if everything is in order you receive the back payments.
When you have a good clean D.S.S tenant there's nothing better than looking at your online account and being advised the date of your next payment. My advice check their previous tenancy and DSS payments.

Robert Mellors

10:50 AM, 31st March 2018
About 9 months ago

Reply to the comment left by peter thomson at 31/03/2018 - 10:29
All well and good for existing well behaved Housing Benefit tenants with stable circumstances, but of course new claimants (or old claimants having a change of circumstances, e.g. moving to a new address) will have to claim Universal Credit. With Universal Credit the "housing element" is paid to the tenant, monthly in arrears, after the initial 6 week waiting period (and assuming UC process the claim on time). If the tenant owes at least 2 months rent, then the landlord can apply for the UC to be paid direct to the landlord, however, UC don't even acknowledge receipt of the direct payments and won't speak to the landlord about the UC claim (they will not accept a signed authorisation from the tenant sent in by the landlord). -
See all the posts on here about Universal Credit. The benefit system is seriously rigged against landlords, and tenants can easily find themselves getting into lots of rent arrears, so from a landlords point of view I think it is now incredibly important for landlords to get a home owner rent guarantor as Luke suggested.

Ken Smith

15:30 PM, 31st March 2018
About 9 months ago

Agents are just bothered about selling-you on a tenant. They want someone in there quickly - then their money rolls in.
Agents work for themselves.
I dont take HB tenants ever either.
Not because lots of them are trash either. I have no wish to deal with local authority employees who judge all landlords as scum. I also have no interest in helping the government out by housing certain types.
I prefer people who work. the fact that they are not in the house for about 60 hours a week less than many HB tenants is a massive bonus - far less wear and tear - I'm being serious.
Unless a landlord only has a trash product to let out, then why operate at the bottom end with potentially bad tenants - AND be embroiled in the myriad of rules and regulations that local government involvement brings?
Great properties attract great tenants.
But...always get a guarantor too.

Mandy Thomson

17:46 PM, 31st March 2018
About 9 months ago

A good thorough reference isn't just a credit check, there are other elements such as previous landlord, and employer's reference (most housing benefit claimants are in fact in work). Also, most references don't cover delinquent tenant/tenant history databases, or require bank statements. In the case of a low income applicant, although they may not have much money, how do they manage that money, are their current commitments met and is income going in regularly?

BTW it's possible to have very little money but still have a good credit record and vice versa.


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