Local Housing Allowance and rent increase?

by Readers Question

9:49 AM, 15th June 2020
About 5 months ago

Local Housing Allowance and rent increase?

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Local Housing Allowance and rent increase?

Is there anything that prevents a landlord from charging the full Local Housing Allowance (LHA) to DSS claimants?

The LHA is the amount that the DSS will pay in rent for a benefit claimant in a particular area, dependant on the number of rooms that they are entitled to. This LHA used to be capped to the bottom third or so of average rents in that area. This cap has recently risen quite substantially.

For example, in my area a person on benefits who qualifies for a two bed property can claim up to £550. This has risen from £470 at the start of the year.

I have a tenant who currently pays £450 for such a property, funded entirely by the DSS. It has occurred to me that I am being foolish by not seeking the maximum LHA rent from her, since it is the DSS that will pay.

So can I simply serve her with a Form 4 (Section 13(2)) proposed new rent and expect the DSS to fund her to the tune of £550 in full, or will there be some resistance from the DSS? (Standard AST, long term tenant, rent not increased for the last 2 years)

In case anyone thinks I am being selfish, I am simply looking at ways to afford the increase in tax we have to pay following the Section 24 rules.

Jessie


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Comments

WP

15:52 PM, 16th June 2020
About 4 months ago

Reply to the comment left by Bill irvine at 16/06/2020 - 15:46
No they are not automatically paying the increase. If I have to issue a Form 4 then, if it the contract was an initial 6 month AST, and now is way past that (tenant been there over 11 years) how much notice do I need to give him now? Its not clear to me 🙁 thanks

Bill irvine

16:08 PM, 16th June 2020
About 4 months ago

WP

If you’re a member of the NRLA speak to its Advice Line staff who can fully explain how to complete the section 13 notice when you’re planning to increase your tenant’s rent outwith the contractual period.

You need to give no less than 1 month’s notice. Separately, your tenant(s) needs to advise the Council or DWP of the revised rent liability to allow a “supersession” to be made.

Bill

WP

17:06 PM, 16th June 2020
About 4 months ago

about to join the NRLA. Anyone got a discount/referral code they would like to share please?

Darlington Landlord

17:13 PM, 17th June 2020
About 4 months ago

Reply to the comment left by WP at 16/06/2020 - 17:06
if you put GBP-058 in the promotional code box I think that will work - its £15 discount. Otherwise I would need your name and email to send a refer a friend link

WP

17:14 PM, 17th June 2020
About 4 months ago

Reply to the comment left by Darlington Landlord at 17/06/2020 - 17:13
thank you 🙂

raj beri

7:35 AM, 20th June 2020
About 4 months ago

Most of my LHA tenants are still with the council. I called the council and advised them that I would be rent increases and also asked them what process they would like me to follow in terms of notification of a rent increase

They were happy with an email to the tenant and the council being copied in.

I gave the notification in line with the start date of the tenancy agreement - it wasn't always 1 months notice but they seemed to accept what I did

For DWP, I have asked tenants to enter the rent rise on their journal. One has been approved

Another one is pending - complicated as it's a joint AST

Bill Irvine has been advising me

Mick Roberts

8:41 AM, 20th June 2020
About 4 months ago

Just give 'em months notice for rent increase.
If on UC, tell 'em to put new rent on Journal in Report a change section.
UC shun't refuse if been 2 years.
U not being selfish, u got to get as much rent in as u can while u can with no extra direct cost to the tenant, to help u/us when the Council & Govt come after us for some more charges/taxes/regs that end up coming out the tenants pocket. We end up undercharging tenants for years when HB LHA keep the amounts too low.
Sounds like she not on cap with only getting 2 bed rate.
WP, if u only charging £470& they allowed £550, UC will only pay what u r charging. If U are charging £600 & tenant allowed £550, UC will pay £550.
I'll copy u something below that might make u not feel so guilty & how to do it. If u get on with your tenants as I do, they just put it on journal for u.
HB tenants, my woman in HB takes my email as copy proof.

U should really join Bills site on Universal Credit advice-Link further down, as you'd be £240 better off now as you'd have had info about this in March. And UC daftly pay the whole of April even if tenant got paid 10th April.

XXXX 2 XXXX Gardens £625pm
And also DWP UC District manager, notes for you at the bottom.
Dear XXXX,
Advance Properties has made the decision to bring your rents more in to line with what costs Landlords have had increased upon them. For years, if you didn’t know, we have tried to look after you with small rent increases, but if you didn’t know, your rent is much cheaper than what the market commands in these times of onerous legislation. Please look & you will see.
Rental Property has gone through a very testing time since 2018 & the Government & Councils implementing all sorts of costs & charges & Legislation on ALL Landlords, to try & get at the minority bad ones. This however has increased costs massively on the good landlords & tenants that didn’t have a problem before.
We now have to do Fitness tests on new rentals £150 each house.
Electrical Installation Condition reports organisation & implementation £300+ each house.
Selective Licensing £890 just for one house.
Legionnaires checks £70 each house.
EPC’s £80 each house.
Data protection checks £40.
Carbon Monoxide detectors & smoke detectors, when wired, £300 each house.
Getting registered with Information Commission officer £40.
Floorplans, Inventories £90 each house.
Landlord has to criminal check himself & has to prove he has Right to live in UK
Increased staffing admin behind the scenes.
As you’ve seen, checks/inspections on your houses now with smoke alarms-Should be much more detailed checks.
Consultant & Legal fees to keep pace with legislation & staff training.
Letting Agent costs for new tenancies & house swaps £70pm each house.
All the above is extra costs we din’t have when many of u moved in.
Landlords are selling in their hundreds due to the increase in costs & the burden of ever increasing legislation.
Landlords are being fined when they get something slightly wrong.
As a company, we are really struggling to keep abreast with these constant legislation attacks, so much so, some of u know all new ones/swaps, we are having to place with Letting Agent.
The biggest changes are Selective Licensing & Universal Credit. Costs an absolute fortune in time & money to keep on top of it.
There are many Landlords out there who aren’t compliant, who are becoming unstuck every week.
We have no intention of selling on you & want you for the long term.
For us to continue & keep your property compliant, we cannot keep your rents as low as they are. So please excuse us for having to increase your rent to somewhat nearer normal levels.
Too cheap a rent & eventually that Landlord can go bust, it is the constant increase in charges by Govt & Councils that has forced this on us & you.
As with all other business’s, our company has to increase costs in line with inflation, builders costs rising, materials, fuel, property insurance etc. etc.
Even more so, with recent Government changes regarding Clause 24 Landlord Taxation, dubbed the tenant tax & also the Nottingham Selective Licensing Tax which the Council are asking for up front all in one go.
As of 31st March 2020, You will have been renting your property for one year or more.
So as of today, we hereby give you at least one months notice that we will be increasing your rent to £625 per month from 31st March 2020, & this will be your annual rent increase.
If we don’t do this & you are still living here in 10 years-Which we hope you are, we will have a problem with some big unexpected repairs. As roofs 10 years ago was approx £2,000. Today they are nearly £4,000. In 10 years they could be £7,000 & if the same low rent after inflation, there wouldn’t be enough funds to pay for these big repairs.
Please telephone me should you wish to discuss this letter.
If you are claiming Universal Credit UC, could you please notify them of our intentions & pass this letter on also. In other words, please read below:
UC require you by their rules to notify them of rent increases. However they also don’t make it easy & say you can’t tell them till it has actually happened. Whereas it is tenancy law/rules, that I must tell u at least a month before. Bonkers that you can’t tell them though, as you have been able to tell Housing Benefit 2 months before for 22 years. And they just put it on system.
Please put this new rent amount on your journal. UC also want us Landlords to tell them, but don’t tell us how we should tell UC also.
Although initially, you have to pay me out of your own pocket, ask UC to refer you to the LHA rate applicable at the time to help you with this rise.
You may, if you wish, like to use the enclosed draft letter to UC as a guideline & ask them if they could refer it to the LHA rate applicable at the time. If you prefer, you can write your own out. Whatever you choose to do, please send UC a copy of this letter, along with a copy of the enclosed draft letter (or your letter), as soon as possible. If the LHA rate renewal is not due, ask UC to save these letters & pass it on to the LHA rate when it is due to be looked at it.
Some notes below which is correct on the subject, although most UC staff don’t know:
The onus is on the tenant to report the change. Alternatively, if I’m receiving the "housing costs" direct, I as your landlord, am also obliged to notify the DWP of any material change in your circumstances, including an increase in rent charge.
Dear DWP District Manager
I write to advise you that our tenant above, their monthly rent has increased with effect from above date. Their rent is currently paid direct to us, as his/her landlord, so we’re obliged to notify you of any change that has a material effect on his/her rental charge.
You work out the Benefit Assessment Period BAP, and I’m notifying you to insert this change during the course of their BAP. Please ensure that the change is applied during the BAP period in line with Universal Credit regulations and DWP’s Advice to Decision Maker’s Guide. Details are included in the following UC Advice:
bulletin https://universalcreditadvice.com/articles/2699/
Please acknowledge this notification as sufficient to make the necessary changes to his Universal Credit award or, if not, explain why you’re refusing to apply this notification of a material change to their “housing costs element”.
I look forward to hearing from you.
Yours sincerely,
Mick Roberts (Creditor Ref Number. XXXX)

Prakash Tanna

8:51 AM, 20th June 2020
About 4 months ago

Reply to the comment left by Bill irvine at 16/06/2020 - 15:46
Hi Bill, I disagree that the LA would need to see a correctly completed s13 Notice or that such notice is required for them to increase the rent inline with current LHA rates.

I spoke to my tenants and explained why the rents were going up and that it would be covered by their HB/UC payments unless they were on a benefit cap, in which case I would reverse the increase. They agreed and I notified the tenant/LA by way of a letter which the tenant accepted.

One LA tried to be clever and wrote to the tenant to ask if they were given the appropriate notice period. The tenant responded to say they accepted the increase on the date stated by mutual agreement. Nothing further was needed.

Is there anything in statue that gives LA powers to question the legal nitty gritty of AST's or variations/amendments/rent increases along the way? I guess, it would be an issue if the tenant was not complicit and challenged what the Landlord proposed ?

WP

8:55 AM, 20th June 2020
About 4 months ago

Reply to the comment left by Mick Roberts at 20/06/2020 - 08:41
thanks Mick - where do you find out who your District Manager is for the area you have tenants in please?

Mick Roberts

9:15 AM, 20th June 2020
About 4 months ago

Reply to the comment left by Prakash Tanna at 20/06/2020 - 08:51
Prakash,

I think Bill is referring to the proper proper way we must do it. As some tenants some authorities may decline unless u 100% perfect. I had one tenant do a moaner even though she'd be £40pm better off, but she saw sense in the end.

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