What steps to follow for a new Housing Benefit tenant?

by Readers Question

15:00 PM, 11th November 2015
About 3 years ago

What steps to follow for a new Housing Benefit tenant?

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What steps to follow for a new Housing Benefit tenant?

I have now found a Housing Benefit tenant and done all the credit checks/ references etc and all is good. They are currently receiving HB in another London borough, but will be moving to my properties London borough so wanted I wanted to know if anyone could briefly outline the procedure I would need to take to get them into my property?steps

So for example do I give them a post dated AST and they then go to HB in my area and claim the HB or should they do the HB form online? Or would it be better for me to go with them to HB offices to do this so that I can see everything with my own eyes?

The parts I am worried about are what if I give them an AST and the HB claim is lower than the expected rental for my property, what if the claim has arrears or claw backs they never knew or told me about? Basically what is the best procedure and series of steps in my situation to protect me!

Any help would be greatly appreciated :o)

Joel



Comments

Luke P

11:02 AM, 12th November 2015
About 3 years ago

Don't forget to have them apply for an overlap of up to two weeks.

Alison King

13:01 PM, 12th November 2015
About 3 years ago

Hello Luke
It is your tenant's responsibility to organise their Housing benefit payments. They would have to give you explicit permission if you were to get involved in their case, but you can call the local housing benefit advice line to ask general questions.
Housing benefit is usually paid four-weekly and in arrears, so if your new tenant is paying their current rent in advance, they should have enough from their final HB payment to cover the first few weeks in your property.
Normally, you would give them a copy of the signed AST on the first day of the tenancy or shortly before, and they will take it straight to the Housing Benefit office to claim their new benefit. It may be worth them contacting the relevant councils in advance in any case, to make sure everything is done correctly and in good time.
One area of common confusion where rent is payable per calendar month in advance, is that tenants often mistakenly think they are being paid less HB then their rent because the HB is split into 13 four-weekly payments.

Recardo Knights

14:23 PM, 12th November 2015
About 3 years ago

Do you know why they want to move, has their LL given a good reference. I've had one of these before as the LL wanted to get rid of a bad tenant. Can you visit them an see how they live, maybe talk to neighbours, noisy, antisocial,l etc.

Friends references should not be trusted, so what references have you got. Do they work?

They should sign a letter stating you can speak to the council in regards to their benefit and find out what they are entitled too. The council will give you two figures (weekly rent, gross rent) multiply the smallest figure by 52 and divide by 12. This gives the monthly payment. If not enough to cover the rent can they pay the top up. The bigger the top up required the less chance the can pay.

My tenants on HB signed their payment over to me, so it comes by BAC directly to my account. If possible are they willing to do this, if they don't want to forget the deal. Can they pay a deposit or is the council guaranteeing it, again no money up front walk away, trouble to get them to pay for damages later.

Joel Hearne

14:34 PM, 12th November 2015
About 3 years ago

Reply to the comment left by "Alison King" at "12/11/2015 - 13:01":

Hi!

I was wondering if there were any checks that I could do to make sure they will actually get the HB they say they are entitled to ? If I give them an AST and then they were to give mistaken or false (on purpose or otherwise) information to the HB claim, I would now be stuck with a tenant in my property who can not pay the rent fully or at all? We do checks on credit and references to make sure the tenants are good but is there not a safe way to know if the HB claim will meet the rent and is a genuine claim with no arrears of HB due on the prospective tenant? It almost seems like you give an AST and hope for the best!

Joel Hearne

15:30 PM, 12th November 2015
About 3 years ago

Reply to the comment left by "Recardo Knights" at "12/11/2015 - 14:23":

Hi!

The references and credit all check out ok, we got a landlord reference too.

So are you saying that you just take a letter signed by the tenant to the HB department and they will verify if the tenants claim will meet the rent? Surely the family would need to come along with me? My main issue which i'm hoping that everyone can see is that the HB claim needs to be verified doesnt it? Its the same situation if you got a private tenant, u need to see wage slips and banks statements etc? So what is the equivalent check with the HB claim?

Lets follow this through, say your prospective HB tenant tells some porkies on the HB claim, you are now stuck with a HB tenant in your property that you supplied an AST to? How does one make sure the HB claim is accurate and will deliver? There could be arrears too which may affect the amount paid out?

Alison King

15:36 PM, 12th November 2015
About 3 years ago

Reply to the comment left by "Joel Hearne" at "12/11/2015 - 14:34":

If they were deliberately to give you false information I believe it would be fraud and you could evict them reasonably easily, but the legal experts on here would be able to comment on that better than I can.
Re their previous payment history I would want to see proof of their regular payments to their previous landlord, and a landlord reference. You would have to get their permission before you can ask the HB office about their personal circumstances.

Joel Hearne

17:01 PM, 12th November 2015
About 3 years ago

Reply to the comment left by "Alison King" at "12/11/2015 - 15:36":

With regards to permission do you know how that is organised? Because HB departments are not well run.

Imagine this, a HB tenants replies to my property advert, I check references/ credit history etc and all good. They then tell me their family size etc and they fill in the HB online calculator and it shows they would be entitled to enough to pay the rent based on my AST. I then let them into my property to discover later that a mistake was made by the tenant on the HB claim which is now lower than the amount for them to pay the rent, what happens now?

What i'm driving at is that is there a secure way to establish what the HB claim will be for a paranoid landlord? Because once the tenants in, its going to cost to evict them just like having a private tenant who you suddenly discover does not earn what you thought they did?

Thanks

Alison King

19:06 PM, 12th November 2015
About 3 years ago

Reply to the comment left by "Joel Hearne" at "12/11/2015 - 17:01":

Hello Joel. You will be able to find out from your council, for example, Manchester where my properties are has it on their website: http://www.manchester.gov.uk/info/200008/benefits_and_support/4249/local_housing_allowance/2
I use this to help work out what is reasonable to charge my tenants and also what they can expect to be able to claim. I only have one HB tenant at the moment who is charged a fair bit below this rate as that's what I think is fair for that particular property.

Robert Mellors

21:10 PM, 12th November 2015
About 3 years ago

Hi Joel

If you don't know your way around the Housing Benefit system, then you are best staying away from it, as there are loads of potential pitfalls.

However, if you are going to press ahead with this then you need to make sure you do everything yourself, because tenants say they will put in a HB claim then they don't bother doing it, so do it with them and make sure you get a receipt from the council, (for when the council "lose" the claim).

If you give copies of any documents to the council, get a receipt, because they will lose the information and deny it was ever handed in to them.

Check the tenant's maximum HB entitlement on the "LHA Direct" website. - However, remember this is the maximum entitlement for the household, not their actual entitlement, as it does not take account of the tenant's income (or capital). Likewise it does not take account of the "Benefit Cap" that will affect almost all tenants in expensive parts of the UK, (e.g. ALL of London).

If the tenant tells lies, makes a mistake, or does not provide the requested proofs, then the Housing Benefit claim will be cancelled, and any HB already paid will be recovered from the person it was paid to. Likewise, if the HB Dept make a mistake and pay too much HB or pay it when the tenant is not entitled to it, then they will also seek to recover it from the person it was paid to, even though the overpayment was caused by the council themselves, (but there may be limited grounds to appeal against the recovery).

Also, be aware that the HB is normally paid to the tenant (unless you can persuade the council to pay it direct to you), and if the tenant chooses to spend it rather than pay the rent with it, then there is very little you can do about this except issue court proceedings for eviction (and ask the council to pay the HB to you, for the remaining many months it takes to evict the tenant).

If the tenant starts work, and fails to notify the HB Dept, then this will create an overpayment and this will be recovered from the person it was paid to. If it was paid to the tenant, and there is still an active HB claim, then it will be deducted from the ongoing HB payments (so how will they then pay you your rent???). This type of HB overpayment can occur even when the council are notified, because it takes them a while to calculate the tenant's new HB entitlement, and during that time overpayments are likely to occur.

If the HB is paid direct to you the landlord, and a HB overpayment occurs, then the council will recover this from you, NOT from the tenant.

Always, ensure that the tenant has provided a rent guarantor that is an employed homeowner (and you have referenced and credit checked the guarantor).

Joel Hearne

18:57 PM, 13th November 2015
About 3 years ago

Reply to the comment left by "Robert Mellors" at "12/11/2015 - 21:10":

Gosh! I never knew it was this bad. Now I see why agents do not want to take on DSS tenants, probably nothing to do so much with the tenants only but all the uncertainty of the actual HB claim and the fact that the money could get claimed back!

Surely the government should be checking all the validity to claims and if the tenants make mistake the government should be liable and the landlords rent should be safe. That would instantly make more landlords want to rent to DSS?

I see why you now insist on a property owning guarantor so that if any claims go wrong you have a chance of being paid?

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