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heebs

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hello all

I have just taken on a housing benefit tennant for my 4 bed one recep house after reading your post about having 100 good dss tenants..

The rent i agreed and signed for on a 12 month ast is £1600...the lady has 3 children..one autistic ..

She told the agent she would get 100% of the rent from the council however i asked the agent to if she could provide a letter of guarentee from her ex husband incase of any shortfall to which they agreed and i signed the contract..since then the agent has text me to say the tenant is very embarrased to approach her ex and will meet any shortfall

but the council has sent me a preliminary letter for housing benefit for her saying they are currently paying her £800per month..this is only half my rent...

Can you advise if i am in trouble...or will the council re asses to nearer the rent amount of £1600..and if they dont what is my position...

Sorry for the sos...but need some advise from the more experienced members here.

Hope you can calm my nerves or improve my knowledge

thanks in advance

worried landlord of 1 house

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Many landlords shy away from DSS applicants. The tenant will have undergone a pre-tenancy determination and councils have set rates for set property types so you are unlikely to convince them to pay more. If you have a DSS applicant make sure they are fully referenced and a guarantor who should also be referenced and earn at least 3 times the annual rent. If not, it's just not worth the risk. If your agent is not pursuing safeguards then ask what they are doing to protect your interests, or go elsewhere.

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I agree with the comments already posted, however the poor chap already has a peasant ( sorry DSS tenant) in his property and it sounds like that there is no guarantor.

Mr landlord all you can do now is hope the rent payments are made on time, with DSS tenants any bill or small crisis, can throw their finances into disaray. Make sure you have a strict plan for sending letters as soon as the rent is overdue and read up on the appropriate action, listen to no excuses.

The changes to Housing Benefit payments allow for the payment to paid to landlord if the the rent is two months overdue. Also keep up regular mangement visits, tenants tend to behave if they know someone is watching.

Finally its amazing how many single mothers allow there x's back into the property whilst still claiming benefits (why it's as though they never left!!). Make sure you know who is in your property

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Hi heebs,

I will ignore the bigoted remarks (from those peasant landlords who previously replied to your post). Most landlords receive state benefits (as well as DSS tenants) and everyone would do well to remember that the NHS, State schools, State Pension, Child Benefit and Child Tax credits etc etc - and NHS dentists ! - are claimed by the majority of us ....

Now to your complex DSS question .....

The answer to this question is not straightforward as there are many variables- and there could be many reasons why your tenant is only receiving £800 from the Council against the £1600 rent from your property. This answer assumes that the Housing Benefit claim was submitted prior to 7th April 2008 (when the Local Housing Allowance replaced the way that Housing Benefit claims were assessed prior to that date).

1) As GPEL commented - a pre-tenancy determination should have been done (by the Rent Service) prior to the tenant moving into the property and this would have established the MAXIMUM amount of rent that the Council would pay for your property.

If a PTD was not undertaken then the HB application will be referred to the Rent Service whilst, in the meanwhile, an INDICATIVE level of HB will be paid to your tenant. So, the £800 might be an indicative payment subject to the Rent Office confirming that £1600 is a fair market rent, in which case, the benefit paid will rise to £1600 retrospectively.

2) However, HB is a MEANS TESTED benefit. So, if the tenant is working or has lots of cash invested etc then even if the Rent Officer does agree that £1600 is a fair rent then the tenant might only receive £800 in benefit (because of the income that they have from other sources - including child maintenance payments from the ex-husband).

3) You are going to hit problems if the Rent Service say that £800 is a fair market rent and you are expecting a DSS tenant to find an additional £800 a month from other means - that is simply NEVER going to happen.

4) You need to go an speak with the tenant and get them to arrange a meeting between YOU, THE TENANT and THE BENEFIT OFFICE so that you can sit down and understand the true situation. There are too many variables to know, right now, what the outcome is going to be. Maybe the Rent Officer has undervalued the property, maybe the tenant is rich, maybe the rent level is indicative, maybe the tenant has completed the HB claim form incorrectly thereby receiving less benefit than they are entitled to and they need to pay your rent, or maybe you are in deep trouble with a tenant with no obvious means to pay you the rent for the next 12 months.

Finally, it all very well saying that you need to get fully referenced guarantors from DSS tenants. Are you all living in "Cuckoo Land" ? The reason why DSS tenants need to claim benefit from the state is because their friends and relatives are probably "financially disadvantaged" as well. In other words, the parents can't help the children which is why the state is having to help them!

Hope that helps .........

Mark

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Hello Mark...and everyone else who responded

Mark..many thanks for giving the time to lay out all the options...I think the council hasnt decided the rent as yet and are giving her a prelim rent until they access...the tenant did agree to give me a letter of gaurentor from her ex in ireland but 2 days after moving in she told the agent she was embarrased to approach her ex and would meet any shortfall.

In the one week she has been in the prop she has txt me several times all in aid of finding out suppliers to switch to her name (although i already did that day 1)...so she seems responsible in character

I went to the prop this friday to pay the man who came to fix the garden fence...she wasnt in but she had made the place nice...put protective pads on all the furniture..fresh flowers..(expensive ones)..and ....wait for it....a huge brand new 50 inch LCD tv...and more white goods in addition to the ones i provided

she isnt working as she looks after her 9 yr old autistic son

maybe she will pay the shortfall...if she doesnt i am taking the tv as compensation..even i cant afford it and i work 18 hours a day like a dog..and my prop is going into neg equity ...and i have so much financial stress...how can these dss people live so well...

will keep you all posted

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Finally, it all very well saying that you need to get fully referenced guarantors from DSS tenants. Are you all living in "Cuckoo Land" ? The reason why DSS tenants need to claim benefit from the state is because their friends and relatives are probably "financially disadvantaged" as well. In other words, the parents can't help the children which is why the state is having to help them!

Hope that helps .........

Mark

Mark appreciate the sentiment and the logic ...BUT this is a very inaccurate assumption ...I know this as i have got/had plenty of "dss" tenants who do have access to an "A1" gaurantor ...... with parents such as doctors , councillors, directors, teachers, lecturers, ......also grandparents aunties uncles ...ex partners ...even family friends .....

I do respect that a fairly high percentage of this group dont have access to such tho , just like a lot of professionals dont pass refrencing, and most prop is not suitable for btl .......

I have the same approach to ALL of these situations

WALK AWAY

Running a business is hard enough without tying one hand behind your back !

This is not to say that i am not involved in "Social Housing"...i am.... i have 3 properties full of asylum seekers/homeless (18 people)

BUT these are let direct to the local council on 3 yr leases....the point being that the council WILL PAY the rent (and 3mths in advance!)

So this is not " i wont have peasants in my props" more

"minimising exposure to potentially very stressful and expensive scenarios with people who clearly have no financial substance"

I also have around half a dozen long term "dss" tenants who are absolutely great ..(BUT WITH A1G)

Heebs

I have an autistic child as well .....if the child autism is "severe" enough to warrant pads on furniture ...the mother is probably getting high rate disability allowance and a host of other benifits above the "norm".....

"i am taking the tv" ..........would be considered theft ...with serious repercussions ....i strongly advise against this course of action .....if you end up in court over possession this will seriously NOT help your case ....and is not the action of a responsible LL ...i feel this would put you in the bracket of rogue LL without a doubt.

The Rodent

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Hello All

THe response from Mark highlights the problems when dealing with DSS/Hb claimants and local authorities. The tenant has agreed to pay 1600pcm for the property and now is only able to pay 800pcm, surley the tenant should have found out how much benefit she was entitled too before signing the AST. But it has now become the landlords problem.

The local authorities encourage tenants into the private sector but provide no or little backup if things go wrong. Private landlords and agents are forced to act like social workers and councillors to people who are in dire need of proffessional support.

As for this Guarantor there is one or there isnt, what was the agent doing? As far as I know guarantor documents are unenforcible if the guarantor is not in England or Wales ( I stand to be corrected on that one).Guarantor's in my experience should always be home owners and should be consulted before the tenancy begins.

At the end of the day most landlords just want the rent paid on time and be secure in the knowledge that the tenant is keeping the property in good order.

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Hi all,

Although I commented that guarantors are hard to find for DSS tenants - the guarantor issue is going to get a whole lot more important now that the Local Housing Allowance has been introduced (from 7th April 2008) and the benefit, for all new claims, is going to be paid DIRECTLY to the tenant !

Locally, we have 8000 DSS tenants looking for housing and - to protect the landlord and ensure the rent continues to be paid - I will be only helping tenants claiming the LHA if they provide a guarantor as we move forward - even though I am not going to be able to help the majority.

I am of the opinion that the majority of DSS tenants are not going to withold ALL of their LHA rent from the landlord (as that really would be very stupid and a fast way to eviction) but I am concerned that, for example, during December a "couple of hundred quid" might get borrowed / diverted / mis-appropriated to pay for the turkey and presents for the children.

As a landlord - I am going to have to take a business judgement on whether LHA (and the loss of a couple of hundred quid every Xmas) is going to be a price worth paying for ZERO void periods over 18 years (as these DSS tenants raise their families in my rental properties).

The businessman in me says "£200 loss for zero voids" seems like a good deal although the "old school landlord" says that I am owed £200 and should evict for rent arrears!

Pragmatically, a good DSS tenants who stays for 18 years must be a better financial proposition than a working tenant that moves every 6 / 12 months thereby creating potential void periods and the cost of finding new tenants etc etc. This judgement is made with the knowledge that the rent is almost certainly going to be a little short each Xmas.

How can I encourage my DSS tenants to pay their rent in full each Xmas - perhaps I should hold a raffle for a TURKEY and the DSS tenant is entered for the draw as long as the rent arrives on time. This will mean that 1 tenant will get the turkey legitimately paid for ... and I will hopefully get the rent I am due from the rest .....

TRENNERS TENANTS TURKEY DRAW .......

Thoughts ?

Mark

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Carrot and stick sounds a bit better to me ........

Turkey or Debt collector ........ :blink:

The businessman in me says ....speak to local butcher/merchant get a good deal on bulk order ...then sell to tenants for cheaper than local shop (ensuring small profit for yourself!!)

easy to manage ...just give vouchers to hand in to meat merchant ....leaving you not having to see or touch the birds!

also easy to collect just add £1 amonth to rent !!! if they leave b4 xmas --no turkey !

If rent is shy you have a couple of quid in hand and can send the dc round !!!

Mark do i detect something of a U turn here:

First:

Finally, it all very well saying that you need to get fully referenced guarantors from DSS tenants. Are you all living in "Cuckoo Land" ? The reason why DSS tenants need to claim benefit from the state is because their friends and relatives are probably "financially disadvantaged" as well. In other words, the parents can't help the children which is why the state is having to help them!

and then:

Locally, we have 8000 DSS tenants looking for housing and - to protect the landlord and ensure the rent continues to be paid - I will be only helping tenants claiming the LHA if they provide a guarantor as we move forward - even though I am not going to be able to help the majority.

Or did i misunderstand ?

The Rodent

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Hi Rodent,

Not really a U turn more the case of "putting on a seat belt".

I really believe that the right DSS tenant is a great business proposition. When the rent was paid directly to the landlord it was pretty much a "no risk" proposition as I have great access into the local DSS office and can get virtually every claimant through the HB process - thereby meaning that I get the rent directly from the Council.

The additional requirement now, though, is to find a tenant who is a) entitled to benefit and :blink: is going to pay me the benefit once they receive it from the Council.

Entitlement is easy ..... getting tenants that will then pay me the cash might be more difficult (although this is yet to be fully proven and I don't want to run up huge rent arrears finding out) ......

So, a guarantor - to guarantee that the tenant will handover their benefit - is what I will be demanding in the future.

Fortune favours the brave - Guarantors protect the cautious !

Mark

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A good agent, who is properly representing the interests of their clients (the landlords), wouldn't accept an applicant on unemployment benefits without a fully referenced guarantor to back it up. No guarantor then no tenancy. Not to take a guarantor goes against industry best practise and to see it otherwise is poor judgement.

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If it is industry best practice to get a guarantor for DSS tenants then it should also be industry best practice to get a guarantor for tenants that work.

After all, just because a tenant claims a benefit shouldn't make them any more likely to be problematic than a tenant that receives a wage AS LONG AS YOU ARE SELECTIVE.

The point is that it doesn't matter how they pay the rent - as long as they pay then rent - and it doesn't matter how they look after the property - as long as they look after the property.

Just carefully select the tenants and everything will be fine - select the wrong tenant and it makes no difference if they are working or not !

Mark

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oops doubled up on the reply!!

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I agree Mark.

It's the selection process that should be spot on and not the fact that someone does or doesn't claim any benefits.

I recently took a guarantor on a young working couple.

Why?

Well I just wanted to.

A safeguard.

For my own peace of mind.

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As any one with experience of HB claimants as tenants will know only too well (very much including you ,Mark) the biggest problem with HB clients is not actually the client(assuming they are carefully "selected") but HB dept , who stop benefit for no apparent reason, T circumstances changing and HB not being informed, this is not just a discussion over the T enthusiasm to hand over the HB ......these are risks over and above those presented by a "prof" T.

Also factor in the fact that generally they are finacially challenged and have to meet part of the rent themselves.

And when an arrears situation presents they are not financially equipped to deal with it.

Taking a sensible overview you are in a position of higher risk which needs to be addressed sensibly ...

So less squabbling about "peasants" etc it is a statistical exercise which deems a G to be a prudent and neccessary factor in the equation.

"during December a "couple of hundred quid" might get borrowed / diverted / mis-appropriated to pay for the turkey and presents for the children"

Kinda gives the game away a bit !!!!!!

Not the sort of T i want for my business.

The Rodent

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Can't beleive some of this. Yep, DSS applicants and adults under 21 whether working or not - get a guarantor, they're both part of the highest risk category. If your agent thinks a guarantor's not needed for DSS applicants then ask them to personally underwrite the tenant's obligations and see what they say.

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I agree with Simon (odd that!) that HB dept can and WILL suspend payments from a Tenant at the drop of a hat!

Advice here would be to make sure that the T gives appropriate permission for you as a LL/LA to speak directly with the department on their behalf when your filling in their claim form. Infact I would INSIST on this.

Many 'Professional' LL's seem to come to me with stories of being owed £thousands and I personally don't get this.

Why do they wait so long????

I have recently been instructed by a LL to take over a property with £1100 debt, in 3 weeks we have recovered £635 and will be getting a further payment of £409 on Monday. Of course the LL is over the moon, he knows the agent was s**t but that's a different story . . . . .

The only difference between me, the LL and the previous LA is and was that I spoke to the T, spoke to HB and resolved the issue without having to involve any outside sources. The T is certainly well on their way to being up 2 date, the LL is happy because I've just given him £500 cash (he's had NOTHING since 21st December 2007) and the T is happy because they've not been evicted!!!!!!

If/Should a payment from a T be 1 - ( THAT'S ONE!!) day late i'm on the phone to them, calling around there, tying up their guarantor etc haha,

As far as Christmas goes then we personally adopt a 'savings scheme' whereby the T can (and they do) pay a little extra each month so ensuring that the December payment is FREE for them and that we already have it in the bank.

It works if it is administered correctly.

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I totally agree with J4L. To manage DSS tenants you need to be able to manage the Council / HB department (and this is why so many landlords / letting agents can't deal with DSS tenants).

So - it's got nothing to do with the tenants and everything to do with the Council. HB claims, of course, get suspended - but if you (as LL or LA) handle this situation correctly then it is really easy to get these claims unsuspended prior to the next payment date.

However, if you put your head in the sand then these claims might be suspended for months (waiting for the tenant to provide the correct information required by HB to unsuspend the claim).

J4L's comment about getting yourself nominated as a 3rd party on every HB claim is excellent advice. Also - tell your tenants that you want to attend their HB meetings with them (at the Council) so that you can understand what is going on with their claim.

PS: I have been so successful it letting to DSS tenants (without guarantors) in my area that I now have a full-time ex-HB assesment officer on my staff.

Oh - and non of my 100 DSS claims are currently suspended and non of my tenants are in rent areas.

In summary - if you are owed money by DSS tenants, it's not the tenants fault, it's not the Council's fault - it's your fault (for not managing the tenancy properly).

DSS tenants - love 'um all - (well maybe not all <grin>) !!!

Mark

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I totally agree with J4L. To manage DSS tenants you need to be able to manage the Council / HB department (and this is why so many landlords / letting agents can't deal with DSS tenants).

So - it's got nothing to do with the tenants and everything to do with the Council. HB claims, of course, get suspended - but if you (as LL or LA) handle this situation correctly then it is really easy to get these claims unsuspended prior to the next payment date.

However, if you put your head in the sand then these claims might be suspended for months (waiting for the tenant to provide the correct information required by HB to unsuspend the claim).

J4L's comment about getting yourself nominated as a 3rd party on every HB claim is excellent advice. Also - tell your tenants that you want to attend their HB meetings with them (at the Council) so that you can understand what is going on with their claim.

PS: I have been so successful it letting to DSS tenants (without guarantors) in my area that I now have a full-time ex-HB assesment officer on my staff. .

Forgive me ........I am a LL not a BlxxxY Social worker or HB case worker working for free.....

Also please enlighten me as to how you could sort out a few simple HB problems:

1. T has partner living with them which HB have become aware of ..and have stopped payment

2. T has been "accused"of working whilst claiming

3. A "rare"one this (NOT!)...HB have lost documentation ...for the 5th time ...even though you as LL have faxed emailed and hand delivered documents WITH a receipt

4. T refuses to go for interview

5. HB have miscalculated claim (their fault and now have reduced benefit to 1 quarter of previous in order to reclaim overpayment )

6. T forgot to declare "some of their income"

The above ALL relate to ONE T that i had ...........and as previously pointed out T had no financiall substance to put acc right ........Threat of dc ...and ....tara ....gone ...............(in the days B4 i had a G in place !!!!!!!!!!!!!!!!!!!!)

NONE of the above will apply to a "prof " T so lets get real here ........HB T present a far greater risk ......PERIOD

Oh - and non of my 100 DSS claims are currently suspended and non of my tenants are in rent areas.

In summary - if you are owed money by DSS tenants, it's not the tenants fault, it's not the Council's fault - it's your fault (for not managing the tenancy properly).

DSS tenants - love 'um all - (well maybe not all <grin>) !!!

Mark

What a Fxxxxxx Pile of Sxxxx (apologies for the French) but, Mark this is an insult to any LL ...

A T signs an AST, it is their resonsibility to make sure rent is paid NOT the LL .....

I am A LL not a free social/HB case support worker .......

If you need to employ an HB officer within your organisation then you are clearly demonstrating how big problems can/are be with working in this sector without considering the relevant risks

The Rodent

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I totally disagree that HB is a safe bet. To say that they are on a par with professional working tenants is a load of rubbish.

Some may be, but the majority not.

The money they "earn" is so different.

Most of my tenants will earn an average wage of about £26,000 per annum. Their total rent including bills is £400. They will get about £1,600 after tax, = £1,200 of cash for living.

How much do HB tenants have, maybe the £400 rent paid, but what £50 a week for living expenses = £217 a month for living. Nearly £1,000 difference!

There is such a big difference here, even if one of my tenants loses their job, they should have enough money to cover it for quite a while, and if not....they would then get HB and be in the same position as your HB tenants, but would be much more likely to get another job quickly!

The way you talk about it Mark, it feels as if you think the world owes HB tenants a favour and that they are the peole we should all aspire to.

A question for you... Would you marry any of your HB tenants, are you friends with any of them? would you let them look after your kids? would you lend them £100 of your own money as a favour? If the answer is yes to all of these then maybe you're right, I suspect the answer would be no, in which case their character doesn't sound that great?

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Managing HB is easy.

It's about communication, patience (sometimes) and a little business accumen

Simon and problems 1,2,3,4,5,6, ? Easy. May be you need a good agent to do these tasks for you. Oh yeh you WOULDN'T WOULD YOU. Haha.

Any way Mark has taken a slating here but in my opinion he's absolutely correct, many many LL/LA's do bury their heads because they are not 'social workers/HB case support worker' and have NO intention of putting themselves out to ease the situation for THEMSELVES also.

You guys just keep sending the 'problem' T's to Mark and myself, I'm happy to take MOST on under FULL supervision.

As for Matthews comments i'll answer

Would you marry any of your HB tenants, I'm in a relationship so probably not, Sarah wouldn't be too happy as I've promised to marry her first! haha

are you friends with any of them? Every ONE of them!! Yup! We get invited to all their BBQ's and house warming parties!

would you let them look after your kids? Mine are a little old to be looked after but some of our T's I'd happily recommend.

would you lend them £100 of your own money as a favour? I'd have no problem with this.

These T's trust me from the off. They understand not to push the situation out of reach.They rely on me for certain things, and that's fine. It's called managing!

This is one of the areas that we do better than anyone else because we are ultimately acting for the LL and want to get his/her money to them each month as quick as is humanly possible.

If 'go-it-alone' LL's want to be more productive then they should be doing these things aswell and then they wouldn't experience 1) too many problems 2) too much delay in getting their rents in.

Yes let's give people more independance, the new LHA structure is the governments way of introducing this but remember that people that have been spoon fed for years may need a little guidance on which way to approach this. LL's/LA's have this experience so why not pass this on? Thus making your future a little more bearable.

Or alternatively stop bemoaning LA's and find one that does all this and pay them to do it. Easy really.

Mark? You and I and people with the same attitude are gonna make a killing in this game. ;)

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