Providing emergency accommodation instead?

by Readers Question

14:34 PM, 18th November 2019
About 4 weeks ago

Providing emergency accommodation instead?

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Providing emergency accommodation instead?

Being a private landlord is a nightmare. So given the latest headlines I am thinking of going down the route of providing Emergency Accommodation instead.

Where do I even start?

Surely it can’t be any more stressful than evictions, tenants doing a bunk, arrears etc and I know the Council I deal with have plenty on the Emergency Housing list as they call me for help as it is!

I have a good reputation with the Council so for once I might just turn the tables and get them to take responsibility of managing the tenant instead.

Many thanks

Reluctant



Comments

Robert Mellors

17:27 PM, 18th November 2019
About 4 weeks ago

Some councils are putting single homeless people in shared rooms in B&Bs. No, not their own room in a B&B, but four single people, complete strangers to each other, in bunk beds in a room. This is fact, it is happening now.
- Not sure how the councils justify this against fire risk assessments, safeguarding issues, risks of bullying, intimidation, drug/alcohol abuse, security of persons and possessions, mental health issues, offending behaviours, sexual exploitation, violence, etc, etc, but nevertheless it is happening in some local authorities right now.
- Of course, all the health and safety regs that apply to private landlords do not apply to councils (and even if they did, it is the councils who are the regulatory authorities, and they cannot prosecute themselves).

As homeless numbers continue to increase, it is potentially a great time for B&B owners that accept homeless people placed in their accommodation by local authorities, i.e. "emergency accommodation".

WP

9:18 AM, 19th November 2019
About 3 weeks ago

I have a two bed flat and an happy to take anyone who needs and upgrade from a one bed who already has HB claim in situ. I can liaise with the Council and a Bond can be given as a deposit or cash paid ad I will deposit into DPS.
Issue comes when its someone on the Emergency accommodation list. The Council will give a Bond or cash deposit and will pay the first month RIA but then its up to the person to make a claim with UC. Inevitably the tenant wants a contract to make the claim, but I dont want to put myself in the position of giving out a TA when I dont know for sure if the tenant has actually applied for UC yet. Even if they have there is a delay so no payment will way after the RIA runs out. If they have actually bothered to apply and get the full allowance for a two bed great, but often comes back with 1. they havent applied the DWP say they wont backdate anyway 2. They have applied but not entitled to a two bed, only a one bed allowance and they are supposed to pay the top ups themselves. I'll leave it to your imagination as to what happens next.... at a loss how to prevent this????? Any ideas anyone????

WP

9:20 AM, 19th November 2019
About 3 weeks ago

...as a result wondering if I can class the two bed flat as some kind of 'emergency accommodation' with the Council that way they have the joy of dealing with all this. The Council happy to wash their hands of a tenant once they have a TA with a private landlord, despite me doing them a favour and housing their 'unhousable' for them!

Fiona

11:21 AM, 19th November 2019
About 3 weeks ago

https://www.google.com/search?q=sarah+walker+eventbrite&oq=sarah+walker+event+brite&aqs=chrome.
This is a link to an event I'm going to next week about social housing. I've seen her speaking at PIN meetings. She really knows her stuff about all aspects of social housing, including developing for this sector. Hope that helps ?
Fiona

Robert Mellors

9:14 AM, 20th November 2019
About 3 weeks ago

Hi Fiona
Do please feedback to this site the outcome of your event.
However, I believe that the course/event you mention is probably about the leasing of properties to social housing providers, who will then use the property as emergency accommodation or supported housing. This is in effect a rent to rent (R2R) scheme. (If the leasing to social housing providers is so profitable, why charge £300 to tell people about it? - I've run private sector leasing schemes since 2004 (and have studied them since 1997 and will happily tell you about it for free, including the negatives).
I think this post is more about how the landlord can let directly to the Council, for them to use as emergency accommodation, thus enabling him to invoice the Council's housing/homelessness department direct, rather than setting up an AST between him and the occupant (who would then be the tenant) and having to rely on the tenant paying the rent via Universal Credit, (and of course being subject to the other various landlord risks and obligations).

There are certainly ways in which landlords can provide emergency accommodation direct to Councils, (I was dealing with these 15 years ago when I managed a Council homelessness department), but again there are pros and cons to this sort of arrangement.

As stated in my earlier comment on this thread, there is a desperate need, as Councils are resorting to all sorts of practices in order to provide emergency accommodation, and the demand is likely to increase as more and more private landlords exit the housing market, and particularly the letting to benefit tenants.

8:22 AM, 21st November 2019
About 3 weeks ago

Obfuscated Data

Alison King

9:19 AM, 21st November 2019
About 3 weeks ago

Reply to the comment left by Robert Mellors at 20/11/2019 - 09:14
I've been to one of Sarah's talks and it wasn't about rent to rent. It was about how to set the property up and work with the council, and understanding legislative requirements. However I've also spoken to an agency that specialised in providing temporary accommodation for the council using privately owned property. They presented themselves as a housing association, not rent to rent but maybe the boundaries are a bit blurred in some cases

Fiona

8:54 AM, 23rd November 2019
About 3 weeks ago

Reply to the comment left by Robert Mellors at 20/11/2019 - 09:14Hi Robert,
Yes. I will provide feedback after the event. As Alison says below, it isn't about R2R, although that is certainly possible in this sector. .
I've been doing a lot of DD on this sector for quite a while. Motivated by having the absolute tenant from hell last year, and resolving that I needed to get out of the industry. Having said that, I do love property, and I was a bit stuck.
Over the last year, I've spoken to a lot of people doing it. But when I've dug deeper, they are doing it wrong. Either not on the correct lending, so essentially mortgage fraud, or not set up correctly with health and safety, or being mislead by the council, and being hung out to dry.
It's not easy to get it right, but if done correctly, could potentially mitigate against all the aspects of property that I loathe. Number one being what I consider to be one of the most inequitable relaitionships/contracts in the world. Tenancies.
Namely, having someone in my life, that by law, can be completley and utterly abusive towards me, threaten me physically, have what are clearly weapons in a house meant to intimidate me, and the police turn up, and say there's nothing they can do ? ? ?
This incident went far far beyond financial implications. I'm very pragmatic about things like that. It's a risk we take. However, the emotional and psychological distress ?
Once was enough for me. I'm out. I need to find a different way to carry on being in an industry I actually love, and that I'm good at.
I shall let you know !
Thank you so much for your very kind offer, to give me free advice. You do have a lot of experience.
I've got a good friend in Liverpool, John Burton, ex gangster, turned legit. He has set up a charity, Inside Connections, housing and training young offenders. He is going to be speaking at the event too. I will hopefully be leasing my properties to him. I guess that is half the battle. trusting, and having a relaitionship with your end-user. This is indeed, essentially R2R, as you say. But I feel confident about his organisation and what he's doing. I'm lucky. ( well, actually, I've worked hard)
Hopefully, other people interested in pursuing this as a strategy, can learn how to do it safely, and legally, and profitably. Whilst also meeting a huge demand.
I don't believe any strategy in property is a get rich quick scheme, passive income, and without risk. Such nonsense.
I will certainly update about the event.
Thank you Robert.

Robert Mellors

10:11 AM, 23rd November 2019
About 3 weeks ago

Reply to the comment left by Fiona at 23/11/2019 - 08:54
Great reply Fiona, thank you for sharing this with us, and for offering to feedback on the event you are attending.

Sorry for your "tenant from hell" experience, it is often that type of experience (or moving away, or ill-health, or financial losses, etc) that prompts owner landlords to seriously consider leasing their properties to a R2R organisation/charity.

I note that you have chosen to go down the route of Rent 2 Rent as your strategy for getting out of the landlord/tenant relationship (although you may still be liable as a landlord for some things even within a R2R arrangement). I am a firm believer in R2R as a POSSIBLE solution for a great many owner landlords (but as I've been doing R2R for 15 years I would say that wouldn't I?!!), but unfortunately it is an arrangement that is sometimes being abused by the "get rich quick" property trainers, who fail to point out the risks and liabilities of these R2R type arrangements. It is good that you are leasing your property to a person/organisation/charity that you know and trust, however, the lease agreement will also need to be comprehensive and robust so that both parties fully understand their respective rights and responsibilities, risks and liabilities. (I need to update my lease agreement to include what happens when the owner dies and nobody takes responsibility for the deceased's estate, - as that reality has happened!!).

R2R is also mis-named in some instances, and some are being, in my view, incorrectly set up using "management agreements", (so in reality this is more like a letting agent arrangement, albeit with a guaranteed rent element).
IMHO a proper R2R arrangement is where a company leases a property from an owner landlord (for a set rent) with the express intention and agreement to sub-let the property in whole or in part to sub-tenants. The R2R company should be responsible for any damage done by their sub-tenants, and for the payment of rent to the owner (regardless of whether the R2R company has sub-tenants in or not), and for any evictions etc that may be required.

As well as feeding back to us about the event, it would also be interesting to know if your planned strategy (as it is now) is amended in light of what your learn at the event.

Robert Mellors

10:28 AM, 23rd November 2019
About 3 weeks ago

Hi Alison

I am often approached by "relocation companies" that claim to be working with Councils to source private landlords willing to let the council place people in the landlord's accommodation, with guaranteed rent. However, when I start asking them questions about the exact nature of the arrangements, e.g. is a a lease to the council, or a lease to the company, or a tenancy with the person(s) placed in the property, how is the rent guaranteed, who's responsible for damage done by the tenant, etc, etc, they usually do not give me a straight answer, or they try to answer but their answers indicate that they are simply a letting agent. I've never had one yet that has been willing/able to answer all the questions, or admit that they are simply a letting agency. This makes me very wary of such agencies.

If the agency/housing association you've spoken to are genuine, then they should be willing to provide you with a copy of their proposed lease agreement, and if they claim to be a housing association then they should be able to provide evidence of this, e.g. check if they are registered with Companies House as a not-for-profit company limited by guarantee (or one of the other legal status's) that would enable them to meet the criteria of a housing association within the definition laid down in s1 Housing Association Act 1985.


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