Forms and procedures for LHA Landlords

Forms and procedures for LHA Landlords

15:43 PM, 16th March 2012, About 10 years ago 49

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LHA Top Tips for landlords. Article 4 in a series of 8
The most important things are that you need everything in writing; you need to keep it clear and simple for the tenant and you must understand timings.

  1. Before you offer any tenant your property let them know that you would like to use a tenant referencing agency to do a basic background search. A number of free services exist and you can find some of these tenant referencing services in the Property Services Directory at Property118.com.
  2. Not all tenants will be familiar with the claims procedure and complex forms or long interviews will put off many tenants. Simplify any forms you have, both in layout and wording, be prepared to explain when paperwork must be completed to secure the tenancy and offer to help with completing the forms.
  3. Produce a standard list for the tenant of the information you will need them to provide to complete their application. Proofs of identity, NI number, banking details etc.. to enable you to reduce delays in submitting their application. The council will advise what they are likely to require.
  4. Ensure that the tenant understands their obligations with regard to giving notice on their current home and if appropriate obtain a Housing Benefit overlap form from your local council. This can be paid for up to a maximum of four weeks where an overlap is unavoidable.
  5. It is always preferable to have rent paid direct to you rather than via the tenant. Explain to the tenant that you will seek direct payments so any information they can offer to help with this would be appreciated; for example evidence of a medical condition or debts.
  6. Once you have decided which prospective tenant you want you will need to contact the council and give them the composition of the family, ages and their income details to get confirmation of what LHA rate they qualify for. Don’t forget you will already have an idea as to what rate the tenant qualifies for, but this will confirm it. Always ask for the confirmation to be emailed so you have a copy in case of any problems. If the tenant only qualifies for the single bedroom rate but it is a two bedroom property, try applying for a Discretionary Housing Payment, which is a fund that allows the council to top up any Housing Benefit. It cannot be used to pay off arrears. For the council to allow this the tenant must be vulnerable and at risk of not getting the property, also the rent cannot be higher than the LHA rate for that property.
  7. You can submit a claim for Housing Benefit up to 13 weeks prior to a tenancy start date. The sooner this process is started the more margin you have for unexpected delays. It is worth stating on the paperwork that it is an “Advanced Claim”.
  8. Always ask your prospective tenant to sign a declaration that states you can contact the council about your tenants’ circumstances that relate to the property. The council may otherwise refuse to speak directly with you due to the Data Protection Act.
  9. If there is likely to be a rent top up required from the tenant make sure they understand how much, when it will need to be paid and that you will require this to be done via a standing order. This will hopefully prevent any problems at a later date. If you are intending to use a letting agent they can ensure that payments are set up as a direct debit.
  10. Contact the council to ensure that there are no overpayment claims pending for your tenant which may affect ongoing payments or affect the tenants ability to afford top-up rent where due. When dealing with some councils this is not an option as the length of time it takes to get an answer could be weeks, by which time you could have lost the tenant. Always try though.


Comments

by Ben Reeve-Lewis

20:58 PM, 19th March 2012, About 10 years ago

And therein lies the new thread that Mary suggested. JP has made his point well, that money can be made from LHA tenants, contrary to a lot of info doing the rounds.

I'm not a landlord so i dont see it from the same perspective as you guys. I worry what happens to benefit tenants and I am really pleased to hear JP put another perspective. I'm sure JP aint a saint, he just has different business model and one that helps my social injustice gene. I can more easily sell JPs model to my superiors and help tenants out in the process.

Lets start a new thread and look at UC and how it will impact PRS landlords, social landlords, tenants and enforcement officers, because we are all in this together, that much is clear

by Mary Latham

21:04 PM, 19th March 2012, About 10 years ago

Ben the new thread is live and waiting for your reply

by

21:10 PM, 19th March 2012, About 10 years ago

Yep couldn't agree mor Mark. as has been stated it is horses for courses.
I choose my horse which has been as a result of experience.
By all means let people suffer their own experience and then make additional investment decisions.
I'm  all for a balanced perspective, this however does have to be based on experience.
If experience is negative do you just ignore it as though there is no such risk and carry on regardless.
I have my own experience which is NOT unique and could be reasonably extrapolated accross that investment choice.
To the point where investors may decide not to invest in that market.
The experience is still valid whether one likes it or not; it happened.
Surely parties should be made aware of the inherent risks with various investment models, that is what this site does, doesn't it?

by

21:18 PM, 19th March 2012, About 10 years ago

Being at the coal face , so to speak, have you any conjecture you think might actually be the case that would differ vastly from the the present LHA set-up.
I suppose the bottom line is
Will  the LL  be paid by whoever ? If the tenant fails to pass the rent on?
Will the UC meet the level of LHA.?
Will the Broad Market Area still be used as a template to assess the level of housing benefit for relevant domestic circumstances?
Will full council tax be paid for full LHA claimants as it is presently?.
Clearly I belive these are the crucial questions for anyone thinking of entering specifically the LHA/UC market.
It would be useful now too have an indication as to whether it would be worth it.
Otherwise lots of potential investors will just sit on the sidelines waitng to see how things work out in practice.
The last thing the sector needs is people sitting on their hands waiting to see what is going to happen!?

by Ben Reeve-Lewis

21:24 PM, 19th March 2012, About 10 years ago

The future doesnt look good in that respect Paul. Government are pulling the plug on benefit claimants whilst demonising them all as rioters and feckless ne'er do wells, with the help of the press.

Lets take this debate over to the new thread though

by Mark Alexander

21:30 PM, 19th March 2012, About 10 years ago

Absoultely Paul, this website was created to enable people to share their experiences, good and bad and to allow others to learn from them. That's why I am pleased to have you here to share your experiences and for people like John Paul to share theirs. That way, everybody can learn best practice from each other. The intended result of John Paul writing these articles is to educate anybody going into the LHA market, voluntarily or not (as Mary has said, every tenant is only a P45 or a relationship breakup away from claiming LHA) on what best practice consists of. They can then make a choice on whether to do that themselves, employ a company like Castledene to do it for them or to know what questions to ask a company like Castledene operating in a different part of the country.

by

23:08 PM, 19th March 2012, About 10 years ago

Hear, hear for you and property118.com

by Lynne Davis

11:11 AM, 20th March 2012, About 10 years ago

 A question for JP, Jonathan and Mary (and anyone else who may have an answer): do you know of anyone who is actually using the Credit Union approach already? Is it already up and running in most areas? (I'm thinking specifically of Birmingham for my own interest!)
We're considering going into the LHA market but I think I'd rather use the CU approach rather than rely on getting direct payments and run the risk of having overpayments clawed back.

by Jonathan Clarke

16:20 PM, 20th March 2012, About 10 years ago

Lynne, Sorry I haven`t used the CU so have no hands on knowledge.  My limited understanding is though that there are many different types in operation and there is no uniformity across the country. Claw backs are there yes but it has not proved a significant problem for me and never enough for me to even consider moving away from direct payment.  But fully appreciate its horses for courses. 

by

4:45 AM, 21st March 2012, About 10 years ago

I think for a small LL the possibility of clawback makes LHA an unviable rental solution.
It would be good if it were possible to obtain an insurance policy to pay any clawback if it ever occurred.
It might even encourage me into the LHA arena.
Unforunately without such a policy I cannot afford to risk retaining a LHA tenant if I end up being directly paid.
It does surprise me that the councils take the attitude that if directly paid they can clawback but not if paid to the tenant.
Or rather they can but know the tenants won't pay back as that is why they are on benefit..
Just because direct payment occurs I still don't see why councils think they can come after the LL if a claim proves not valid.
It is not the LL fault, it is the applicant.
Until this matter is addressed LL will continue to avoid LHA.


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