Joint Tenancy and effect on Housing Benefit

Joint Tenancy and effect on Housing Benefit

9:57 AM, 5th August 2014, About 9 years ago 9

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We have a sale and rent back property owned for 6 years and 10 months now. Current tenants have been in occupancy since outset and are mother and son who is now aged 24 (father was also a named tenant at outset but died within 2 years). Both mother & son are named on the AST and signed witnessed etc…

My view is that they are joint tenants with joint and several liability. In the last few months a rent arrears has occurred (always fine before) and I have suggested to the mother that she ensures her son is aware of the debt as he is also liable for it. Her response is she did not know he was a Joint Tenant and if so, she has been incorrectly claiming to high a level of Housing Benefit. I have no idea how HB entitlement works, and obviously her claim is her responsibility and nothing to do with me as Landlord. Although as her recent payment of rent has been sporadic, we now have her HB being paid direct us as Landlords. Joint Tenancy and effect on Housing Benefit

The end play is unavoidable in that we will have to go to court seeking eviction once over 2 months arrears, but any information on the Joint Tenancy affecting rates of HB would be appreciated.

If anyone has experience of this please make yourself known as we want to do all we can to help her out.

Many thanks


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Mark Alexander - Founder of Property118

10:03 AM, 5th August 2014, About 9 years ago

Hi Stuart

This is very worrying. I'm not an expert of Housing Benefits but I do know that they can be reclaimed from a landlord when the benefit was paid directly and where the claimant was not entitled to that benefit.

There is some protection and where a landlord has no knowledge of an illegal claim then occasionally the benefit isn't repayable. However, given the circumstances (joint tenancy) then I think that argument is flaky at best.

It seems you are in a catch 22 situation.

Does the son live at the property?

Is he working?

Subject to the answers to these questions there may be some positive angles that you could pursue.

Stuart Ross

15:50 PM, 5th August 2014, About 9 years ago

Thanks Mark

Son does live at the property, work pattern is unknown but at best appears sporadic. Classic benefits family, which to be fair has not been a problem until recently in our 6.5yr + relationship. I do have to bear in mind that this was particularly good sale and rent back for us, which is why I have been patient with the sliding rent arrears.

However as arrears is now over 2 full months, and there is little prospect of the situation improving - repossession proceedings will be unavoidable.

My concern is not over HB being reclaimed from us as we have only received 2 payments (8 weeks in arrears) and this was put in place so we had some level of certainty over min cash flow from this particular property. In the greater scheme of things I have pretty much written off 4-6 months rent by the time we hopefully get full VP.

The point I really wanted to get debate going on was the potential quandary of needing all adults in a property named and party to the AST from a management point of view. However, it is the first time I have been aware this potentially affects the level of HB claim the tenant(s) can make.

I have just called the HB admin office and spoken in generic terms about the situation and the need to have all occupants named. The chap on the other end of the line did say - in theory as Joint Tenants, both Mother and Son would need to make their own separate HB claim based on 50% of the rent. However, in practice provided she has stated the son is living in the property a slight reduction to her HB entitlement would be made (and I believe this is the case). In short - not quite the issue the tenant imagined... However I have advised her to formally confirm with the HB Office for absolute clarity.

Thanks for your comments.


John walker

15:51 PM, 5th August 2014, About 9 years ago

Reply to the comment left by "Mark Alexander" at "05/08/2014 - 10:03":

If the HB is being paid directly to the landlord ,it is presumably only recently that the rent arrears have occurred. If the tenants are otherwise good tenants, I suggest you continue to receive the rent (HB) directly. Is it your business if the tenant is wrongly claiming HB? We have insufficient information to conclude that this may be the case. Is it worth a potential lot of hassle over two month's rent?

Stuart Ross

17:02 PM, 5th August 2014, About 9 years ago

Reply to the comment left by "John Walker" at "05/08/2014 - 15:51":

Thanks John

It not so much an issue about the rent - more the fact I had never come across the fact that there could be a negative effect on A HB claim for Joint Tenants.

The tenants have only been good tenants by virtue of the fact they have paid the rent on time for just over 6 years. Unfortunately, now that has been broken and we are only receiving what amounts to approx 3/5 of the rent as HB - it is not a position I can allow to continue without any assurance or the rent will be paid in full and viable proposal for arrears to be cleared. Something has obviously altered in the tenants life, but it cannot be at our cost, beyond the initial limit we are at. She says she cannot pay any more than she is (square root of nothing on top of the HB payment).

I suspect in reality she is working to being made involuntarily homeless so she can secure council/housing association accommodation. I have offered her a joint meeting with the HB Office and any debt counsellors to help her find a solution, but she turns this down.

Thanks for your comments - much appreciated.

John walker

17:21 PM, 5th August 2014, About 9 years ago

Reply to the comment left by "Stuart Ross" at "05/08/2014 - 17:02":

Hi Stuart,
I had assumed the tenants were receiving HB previously to its being paid directly to you. It would appear your premise of the tenants wishing to be made involuntarily homeless could well be correct, in that she/they have refused mediation and negotiation. In that case I think your proposal to seek VP is your only course of action. Any particular reason why HB does not cover the full rent?

Mark Alexander - Founder of Property118

18:20 PM, 5th August 2014, About 9 years ago

Reply to the comment left by "Stuart Ross" at "05/08/2014 - 17:02":

Hi Stuart

I concur with your suspicians regarding involuntary homelessness.

Time to call in Landlords Action I think - please see >>>

9:06 AM, 6th August 2014, About 9 years ago

Slightly depressing reading this thread.

There is no such thing as a typical benefits claimant. 6 million different people claimed JSA last year. They would have had to claim Housing Benefit too. That is a fairly high proportion of working age people in this country.

There are more people in work and in poverty than out of it. Recent research shows that after bills and before food working families have around £6 a day to live. Over the next 3 years the cost to taxpayer of paying Housing Benefit to private landlords via working families will rise by £13 billion. That is the equivalent of every household giving your sector £500 a year.

If you have had a Housing Benefit tenant for 6.5 years, in your area that would equate to circa £40000 of state subsidy - taxpayers money - paid to you.

Eviction is expensive to you. Rehousing to taxpayers, even more so.

Can you see a more sensible solution within what you have already written here?

9:09 AM, 6th August 2014, About 9 years ago

while you are applying for VP, you could ask your tnt to apply for a discretionary housing payment to help with the top-up of rent she needs to pay.

With regards to involuntary homelessness, i'm afraid your tnt will be struggling to prove she is not intentionally homeless, if the reason you are evicting her is due to rent arrears, someone is intentionally homeless if they do a deliberate act, and not paying your rent if you have the funds available is a deliberate act.

if you serve a S21 then your tnt could argue she had no defence to stay in the property, but it would be unlikely that a local council would see this and find a duty to house her and not address the arrears as part of their enquiries.

Stuart Ross

11:13 AM, 6th August 2014, About 9 years ago

Thanks all for comments. The thread was originally querying the issue of Joint Tenancy affecting the level of the tenants HB claim and that she felt it could mean she had been over claiming.

I have since spoken with the local HB Office in generic terms i.e no landlord/tenant/property details. They advised that whilst Joint Tenants should have individual HB claims based on 50% of the rent. However as my tenant has her own HB claim - provided she has stated that her son resides in the property then a small percentage deduction will have been applied to reduce the amount t payable. In that case their view was it was not strictly correct but no additional monies would have been claimed so they would not be overly concerned.

As mentioned we have only just started receiving the HB, as the tent has been making sporadic payments to us of late. As no tenant/claimant authority has been given , the HB office are bound by Data Protection issues and cannot discuss specifics of the claim. Result is we just receive the HB which does not cover the rent.

I have arranged a meeting with HB Office, Tenant and Myself on Friday where I hope authority will be given so I can develop a better understanding of the claim. It does not seem correct to me that the HB payment we are receiving is approx 60% of the 4wks rent. For info the rent level on AST is approx 70% of the market rent level as we structured this for the initial 5 years when we purchased - I have not increase rent above this level.

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