Hi everyone. I’m looking to rent to someone who is on universal credit. The council is offering an incentive that would act as a deposit but it will be kept by the landlord after the tenancy.
Does anyone know if this deposit would need to be protected? Considering that the landlord keeps it afterwards and it doesn’t go back to the tenant?
Thanks
Have you vetted the tenant? Desperate councils are known to offload problem tenants with prospect of carrot
1 Like
Is the council actually doing this unilaterally or just for this tenant? I’d steer clear of any incentive. It’s there for a reason.
Your instincts are right about any money that is supposedly given you “as a deposit”, but protecting it is going to make it tricky to get it back at the end of the tenancy if the tenant objects to it being withheld and there’s no reason for it to be withheld. You can guarantee the council will wash its hands of any responsibility to sort that out when it comes to it.
The Council want to get the worst tenants off their lists .Do not do it.!!!
3 Likes
We’re vetting him now. Asking for documents etc
you must have had too easy a life so far and are looking for a harder life ? This will not be to your benefit.
2 Likes
If you are set on doing this make sure you dig deep into their background. If you get it wrong it could be a huge mistake.
Be really careful, personally I would be finding my own tenants, ask yourself why councils are paying incentives
1 Like
Ok. Thanks everyone for your advice. I will dig around carefully and think hard before committing. Would it make a difference if he had a guarantor?
not to me, the council will say they give you all their backing, but that fades away after signing. You need my barge pole. Not used it for a while.
1 Like
What’s the reason you are considering going this route? A guarantor is definitely better but that alone is not enough to sway things for me.
Landlords have the pick right now, you are far better off not taking any chances not when you don’t have to, I would let it pass.
If you have in writing that this is an incentive payment that is not expected to be returned to the Council or given to the tenant at any time, then its not a deposit and you don’t need to protect it.
I would also urge caution accepting tenants from the Council.
1 Like
Is it something similar to the rent deposit scheme??
So, here’s a scenario for you. The tenant will have their rent paid to you by the council so they’re not going to default on that. Instead, you find that they’re ruining the carpeting, have scratched the wooden floors badly and haven’t cleaned for the first 6 months they’re in the place. There are holes in the plasterwork in several places and a door is hanging off.
Are you now prepared to start the eviction process which will cost you considerably and take 18 months minimum? And you’ll now have to sue the guarantor for damages to simply get back to financial even… and that’s if you’re successful and they actually pay you. Then you’ve got all the work to put the place back to normal before you can let it again and start to make money.
If you’re willing to go through that, and you think the guarantor is able and willing to cover that expense, then go ahead.
It may never happen, but it’s definitely worth considering the risk that it will and the cost to you in more than just money.
DONT DO IT. If the council is offering an “incentive” there is a reason and that reason is an awful tenant they need to unload onto you. The council will do and say anything to get you to take this dreadful tenant but once they are in your house there will be absolutely no support from the council whatsoever
DON"T DO IT.
1 Like
We have (sort of) got rid of a tenant we acquired via the council. The council paid the deposit and an additional incentive to (partly) compensate for the lower rent we accepted when we took a tenant through them. As a result, the tenant had a heavily subsidised rent, lower than any comparable accommodation in the area.
The tenant was totally nit-picky about everything, particularly mould - which accumulated because they didn’t heat and air the place adequately.
We advised at outset that after the 1 year tenancy agreement expired (Council wouldn’t accept our normal 6 month AST), the rent would go up.
When we messaged the tenant to advise of the increase (although they’d already heard it at the outset), said tenant refused to pay the increase or sign a new contract.
Fortunately for us, the tenant’s circumstances changed and they moved out. We are still in dispute with the council to claim the balance off the deposit. Apparently, it’s necessary to issue a Section 13 if a tenant doesn’t accept the increase. We’ve not had this issue with previous tenants, so we’re unaware.
As with other landlords above, I’d try and steer clear of the council candidates - unless you’re really desperate.
1 Like
Even if you are desperate do not do it ,or you will end up even more desperate.
1 Like
As most others have said, if the council are incentivising this tenancy there is likely a good reason for them and a bad one for you. Check into the circumstances very carefully and thoroughly, although I would be inclined to agree with the general consensus that this application should be avoided.
If you were so inclined, and your property and / or adjacent residents are not so precious, then tell the council you want an unequivocal unlimited guarantor liability from them in a clearly written contract. Their response to this will tell you volumes.
I once looked at the incentives “hands off” scheme for a London borough.
- capped rent £300 lower than the going rate
- no liability for damages
- I had to prove this and that just to get into their pool.
The upside 
£1500 incentive for a two year contract. For those of you who can count, the lower rent would cost me £7 over 2 years.
I didn’t get a reply when I asked them if they forgot a 0 on the incentive i.e. £15000 not £1500.
Don’t do it!!!
1 Like