More rent – is there a catch?

by Readers Question

17:21 PM, 4th February 2021
About a month ago

More rent – is there a catch?

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More rent – is there a catch?

I have a two-bed flat let to a lady, her child and partner. Rent £630pcm – UC pays £599.99 she pays top-ups herself (as part working/claiming)

Over Dec, there were some issues with her previous partner and the two children they have together, so the kids moved in with her on a very temp basis while the adults sorted this out (I was unaware of this until she called me in early Jan to put me in the picture)

She has just called me again to state that a decision has been made with her first partner (the father of the two kids) that the children remain with her. She has called the DWP, gone over this all with them, explained her change of circumstance and they have apparently agreed to pay me now £900 towards the rent. With UC rent for period due 30 Dec – 29th Jan due, I am not sure if it will cover this period or next month so will just have to see what comes into the account in the next few days.

She said she is now looking for a bigger property but is unsure she will find one as the flat is in the perfect location for her work/kids schools etc, but a bigger house will mean a move further out.

I’m in a bit of shock to be honest, but keen to understand what to do next. Do I up the rent to meet this now by changing the TA, then have the issue of upping the deposit etc or do I leave as it is as she is looking for another house and may well be out very shortly?

Is it normal for the DWP to pay out in this way knowing that clearly 2 adults and 3 kids are in a two-bed flat?

What other implications does this have? Anyone else been in this situation? She is a lovely tenant, so I don’t need to look at this as a point to cease the tenancy, but I am not sure if on the other hand, this is a long term solution either. Wear and tear with all those people in the flat will be more and of course, there is the other tenant underneath who may object to the increased (inevitable not purposeful) noise levels.

Any ideas where to start with this anyone?

Reluctant Landlord

Comments

Harry

9:42 AM, 5th February 2021
About a month ago

Surely if they have agreed to pay £900 they will need to see a copy of a new AST to reflect this?

Smartermind

10:18 AM, 5th February 2021
About a month ago

If you have a tenancy agreement that stipulates £630, you should stick to that. Suppose the woman's partner had moved out instead, you wouldn't have given her a rent reduction for the "reduced wear and tear". A contract is a contract, stick to it. Also why would any increase in rent have to impact on the deposit?

If she stays, then you can review when you renew the TA.

Robert Mellors

10:53 AM, 5th February 2021
About a month ago

Check the LHA Direct website to find out what the LHA rate is for a 2 bedroom flat in that location.

Prakash Tanna

10:57 AM, 5th February 2021
About a month ago

If she is on benefits and in receipt of LHA her entitlement is purely based on her circumstances (no' of adults, children and their age/sex). This determines her bedroom rate. Have a look at this ....

https://lha-direct.voa.gov.uk/bedroomcalculator.aspx

It is irrelevant want size property she is living in. For example somebody who is entitled to a 4 bed rate can live in a 1 bed flat if they chose to. Other issues of over-crowding etc. aside.

You are entitled to charge the rent the LHA will pay and increase is by way of mutual agreement with the tenant. What you don't want is the tenant's circumstances to change (children move out), LHA rate drops and she can no longer afford the higher rate. In that situation the right thing to do is reduce the rent back down again.

If you need any further help or advice get in touch.

David

15:24 PM, 5th February 2021
About a month ago

She sounds like a responsible tenant. The only thing I would check is whether there is statutory over-crowding. Have a look at the part X space standards in the Housing Act 1985. If she is looking for somewhere else though, then this may ok for a short period.

Jessie Jones

10:55 AM, 6th February 2021
About 4 weeks ago

The LHA increased quite a bit in the area where I have a tenant on UC.
But the costs of keeping a tenant have increased massively, with the requirement for an EICR and the necessity to meet higher EPC standards coming in shortly. And then there is the effect of Secn 24 on tax and the inability to recover damages greater than a trifling amount caused by tenants because of the deposit schemes.
The government expect landlords to comply with every single rule, and to pay every singe penny of tax due. My view is that you would be daft not to maximise your income where you can when the government (DSS) are paying.
I don't have this same approach when the tenants are paying for themselves.

RL

10:45 AM, 8th February 2021
About 4 weeks ago

Thanks all - the LHA for a 2 bed flat where she is, is £599.99
Just had the DWP rent payment into my account and its £899.99. I have no idea if the DWP want to see a copy of anything. I have not been asked direct by them or from the tenant requesting anything that they have asked her to provide. If they do - I only have the original agreement which states total rent to be £630 (she pays the top ups)
She is actively looking for a new place and I am awaiting her giving a months notice shortly so there is little point offering her a new TA as she wont wont to sign one anyway.

Just looked up the 'overcrowding' status in Housing Act. She and her partner in one bedroom, two girls in another and son in the lounge. I am assuming this is ok as reference is only made to overcrowding where different sexes share one room and the room sizes are not big enough - in this case there should not be an issue.
Best not to do anything and just wait for her notice then it seems?

Prakash Tanna

11:00 AM, 8th February 2021
About 4 weeks ago

Reply to the comment left by RL at 08/02/2021 - 10:45
You should amend your rent agreement with the tenant so that the amount being charged is the same as UC are paying you from the date that she informed them of the change otherwise you are technically receiving an over-payment for which UC could one day ask for it back. It's not sensible to just do nothing! Always have the paperwork in place to support what it being charged etc. to save getting stuck in the future.

RL

11:16 AM, 8th February 2021
About 4 weeks ago

Reply to the comment left by Prakash Tanna at 08/02/2021 - 11:00
a naive question - but how to I make this simple amendment - will an email to her to explain this and get her to respond that she agrees to the situation, is enough?

Harry

11:21 AM, 8th February 2021
About 4 weeks ago

Reply to the comment left by RL at 08/02/2021 - 11:16
Issue a Section 13 (2) document under the Housing Act 1988

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