Universal Credit and possible tenancy questions?

by Readers Question

10:46 AM, 27th December 2019
About 3 months ago

Universal Credit and possible tenancy questions?

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Universal Credit and possible tenancy questions?

Possible Tenant X has incomings of £737.36 in total (£419.94 per month housing element, £317.82 other benefits). UC are deducting total of £95.35 per month for 3 various ongoing unpaid debts/fines. Take out the rent of £450, and his total left per month is £192.41

I have spoken to UC direct (tenant gave full permission) and they say they would agree a direct payment. Tenant X current payment period 10th – 9th of the month, so payment to me 16th of he month.

The Local Council are willing to do a Bond for the deposit of £640 and rent in advance agreed.

Questions I have are:

1. Can I insist that UC also pay me direct the additional rent for the £30.06 which he would have to pay in monthly top ups ? (as he has already history of not paying top ups)
2. Do I really have to issue a Tenancy Agreement before he can use this to make a change to his current UC claim? (I keep being told I have to issue a TA first before a new claim can be submitted, but at the same time I have no guarantee that UC will pay out what they say they will until 8 – 10 weeks in when first payment arrives? (if the tenant actually fills in a new claim form)

Is this a viable tenant?

I want to give the guy a chance, but as I keep explaining to Council (who keep pushing their emergency tenants to sign on to UC as fast as possible) I am not an emergency service myself. There is no way I can sign up a tenant with a TA unless I know in advance that tenant WILL get the rent expected, they CAN afford top ups if they are due and I will get paid direct from day 1. I have asked the Council to consider two months rent in advance then I would pay them back once UC kicks in, but they won’t go for that.

Any advice anyone?

I do tend to house those on Em List with Council, so looking for a private tenant is not an issue in the area I have properties in.

Many thanks Reluctant



Comments

Paul Shears

18:39 PM, 27th December 2019
About 3 months ago

What part of the country is this in?

Robert Mellors

18:56 PM, 27th December 2019
About 3 months ago

I believe that it's unlikely that UC will pay the top up over and above the Housing Element. UC will usually pay the Housing Element to the tenant, not to you, unless 8 weeks rent arrears owed or there are other special circumstances, and even if/when they do eventually pay you direct, they can change this. To request direct payments you would need to submit a completed UC47 form, and quite often these are ignored, and the UC team usually will not discuss the claim with private landlords. (they don't even acknowledge receipt of the UC47 forms, and won't advise you of the progress, or their reasons for refusal).

You cannot get any guarantee of UC paying you direct prior to issuing the tenancy agreement. If you wish to let to this person then you have to enter into the tenancy agreement and hope that UC will pay you the Housing Element direct once you have applied (and if the criteria is met). The tenant can request that it is paid to them, not to the landlord, and although this is ultimately the decision of the UC team, they usually go with the tenant's request.

See the posts by landlord Mick Roberts for a taste of the problems you may face. Also see the posts from Sherelle at Carridon Landlord Solutions, as they also deal with a lot of UC cases. For expert advice see the posts by Bill Irving, and view his brilliant website "UC Advice".

There are some circumstances where UC can be beneficial to the landlord, but not many, and you would need to learn these in order to understand the specific circumstances where these may apply. The RLA run a UC training course facilitated by Bill Irving so if you are contemplating taking on UC tenants, it may be a good idea to attend this (or similar) training.

CARIDON LANDLORD SOLUTIONS

1:13 AM, 28th December 2019
About 3 months ago

Thank you Robert for the mention.
As Robert stated UC will only pay the Housing Cost Element based on LHA, if the tenant is in 8 weeks or more rent arrears in his current accommodation (yours) they will pay third party deductions to the landlord, however if he moves out of your accommodation these payments will seize.
The tenant is required to notify DWP of any change in circumstances this includes moving home, once he moves he is required to log into his online journal and report the change. He then has to contact the Jobcentre to book an appointment to verify his change of address and provide his tenant agreement or a letter from his landlord detailing rent, date of move in and property address failing that no Housing Costs will be paid. For rent to be paid direct to the landlord (MPTL) and / or Third party deductions (TPD) the landlord is required to complete a Uc47 a form ca be downloaded on gov.uk. It is very important to remember that Universal Credit will only pay LHA Rate for the dwelling and will not exceed that and that the tenant was will only have £192.41 to live on.
Please feel free to contact our offices to discuss your case in detail.

Marie

21:58 PM, 28th December 2019
About 3 months ago

Hi Reluctant. I know you really want to help this guy. You say that UC have already agreed to pay you directly. Do you have this in writing? If you don’t, then you cannot rely on it. You cannot ask UC to pay the top-up, but you can ask the tenant to apply to the local council for a discretionary housing payment. Please also encourage your potential tenant to apply to go to the CAB for some debt advice, and to apply to pay back his debts and fines at lower rates, as living on £192.41 per month is way below the breadline. Even the DWP only usually deduct £11.66 per week for an overpayment. Other debts and fines can be paid back at as little as £1.00 per month, if the debtor is struggling. Do everything you can to help this man, regardless of whether you house him. Just don’t set up a tenancy of debt.

Gunga Din

11:07 AM, 30th December 2019
About 3 months ago

I’ve had two applicants in the last few weeks in the same position, and who I felt like giving a chance to, and have the same lack of commitment from the benefits office or UC. I’ve proceeded with neither, as once a TA is written/signed, the tenancy becomes extant and all bets are off about what the authorities may have implied would happen.

I realise the potential for benefit fraud but it’s another example of the authorities failing to work with us, and losing opportunities to house people.

Robert Mellors

11:57 AM, 30th December 2019
About 3 months ago

Reply to the comment left by Marie at 28/12/2019 - 21:58
Although the potential tenant can apply to the council for Discretionary Housing Payments (DHP) to pay the rent top up (UC housing element shortfall), the council can decline this DHP request, as it is discretionary, it is not an entitlement. If it is declined, then the tenant somehow has to manage to pay the shortfall themselves from their UC benefit income (or what remains of it after all the deductions), while still paying all their bills and other living expenses.

In relation to him paying back other debts and fines, yes, he should definitely be going and getting some free debt counselling from the Citizens Advice Bureau, National Debtline, or some other free debt advice service. However, the amount he has to pay back to his creditors each month will vary depending on the type of debt he has, so it is not necessarily correct to say that he can pay back the debts and fines at £1.00 per month, e.g. I believe that magistrate court fines are deducted from benefits at £5.00 per week, but repayments of £1.00 per month may be possible on some consumer debts.

Marie

22:42 PM, 30th December 2019
About 3 months ago

Reply to the comment left by Robert Mellors at 30/12/2019 - 11:57
I didn’t say he could definitely pay back all of his debts at £1.00 per month. I suggested he go and get some debt advice, because £95.35 a month is a crazy amount to be paying, and he may be able to pay some back at as little as £1.00 per month. I am currently paying back an overpayment to the DWP, and their minimum is £11.66 per week. In some cases, I believe they double it. Magistrates’ courts fines are £5.00 per week, as you say. But non-priority debts can be paid back at £1.00 per month. Depending on what the debts are, he could be free of almost a quarter of this debt a month, or a whole lot more.

As for DHP, they are supposed to be allocated to the very poorest tenants to help them to survive, so he does have a very good chance of being accepted, because he meets all of the criteria which they look at when deciding who to allocate the payments to first. 1. He is critically short of money. 2. The top-up is very small. At £30.06 per month, they can’t reasonably expect him to find a cheaper property as an alternative. 3. £30.06 is sustainable over a period of time. 4. If they don’t pay it, the tenant won’t be able to afford to live on the remainder of his income, and will end up losing his home. He will have no chance of getting another, or paying off the debt, because he is literally living on the breadline, and DHPs are literally for those people.

Robert Mellors

23:11 PM, 30th December 2019
About 3 months ago

Reply to the comment left by Marie at 30/12/2019 - 22:42
In agree with what you say, the point that I was making was simply that not all debts can be paid off at £1.00 per month, it depends on what the debt is and who it is owed to.

I agree that he is likely to be granted DHP, but it is nevertheless discretionary, and all local authorities decide these issues themselves, it is not a legal entitlement as would be the case with welfare benefits.

Mike T

10:32 AM, 1st January 2020
About 3 months ago

Which ever way you look at it it's a minefield of problems for any Landlord to take on. A very sorry state for the unfortunate 'possible tenant' who clearly needs help. From the figures quoted the system goes some way to help. What a potential LL has to ask him/her self is 'am I prepared to take the real risk of a large financial loss along with all the headaches ? ' As mentioned several times on this forum, We are not a charity ! This sort of dilemma is what Shelter could be stepping in and helping with ....?

Marie

16:50 PM, 1st January 2020
About 3 months ago

Reply to the comment left by Mike T at 01/01/2020 - 10:32
This lady won’t mind me giving out her email address. She is a solicitor specifically employed by Shelter to help all DSS tenants who contact her from any part of the country who are struggling with their housing, due to any type of inequality or financial struggle, whether it be Universal Credit, discrimination, eviction because they can’t afford to pay their rent, whatever. I suggest all landlords with DSS tenants who are genuinely struggling contact her, and ask her for their help. She also wants to hear from all landlords who have housed DSS tenants regarding the issues which they have faced in housing them, so she can pass it all on to the government to campaign for change. Regardless of what the issues are, she isn’t biased in any way, she genuinely aims to help, so if you have a tenant who is being paid their housing element yet isn’t paying you their rent, for example, she will side with you, not your tenant, and if you wish, try her best to encourage your tenant to pay their rent in order to keep their home. She does NOT represent tenants in court, and she does NOT give legal advice to enable tenants to break the law! She has successfully assisted some landlords to avoid taking their non-paying DSS tenants to court for non-payment of Rent by contacting the tenants, and encouraging them to pay up to avoid eviction. She can be reached on rose_arnall@shelter.org.uk

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