The issue are mortgages, insurance and if renting a flat, the freeholder clearly advising not to rent to DSS. Unfortunately tenants are not fully aware of many terms and conditions that stop landlords from renting to good tenants like you.
However I also agree that people on benefits are better protected in case of rent payments defaults or other issues that may arise forcing the landlord issuing section 8.
We need to look the all picture, judge wisely and balance the final decision… trust me, is not easy, especially nowadays with Covid crisis and government legislators changes.
Hope this helps to understand what landlords faces when it comes to and over their property keys to a perfect stanger.
1 Like
Experian is good for credit check and also ask tenants if they got CCJ record.
If they say are not sure then most likely they do have. Its just cost a small amount and it cost very small amount from gov.uk website and quick. If they agree to do check for themselves then its good but we have to keep in mind that if they have moved into different places and it has to be checked at all different address.
One of the problem with some tenants they do not register on electoral register as they would not like to be traced.
if they are good tenants then will tell you before hand that they have bad credit score because they made mistakes but they do have a guarantor.
Simple way to do is that there should be a register for tenants to register and landlords can check or landlords have to register and send a report at the end of tenancy.
I would especially would like OpenRent request to keep the records of all landlords and tenants.
2 Likes
someone is going to say we cant keep a record of tenants and landlords because it breaches the Data Protection act.
1 Like
Direct payments can still be suspended if the tenant does not fulfil their obligations to renew the necessary paperwork with the council. No system is foolproof.
I would only be completely at ease if the council created a system wherein they stood as full guarantor for the HB tenants. If they won’t create housing for them, and want to rely on the PRS as their social housing scheme, they have to take responsibility for their tenants.
After all, I can attach the earnings of a working tenant to recover debt, so why should it be any different.
I know there are some councils that take on the contract to sublet to their HB tenants, and guarantee the rent and the property condition in the process. Why not all councils. The answer is, they don’t want the responsibility, yet they want to control the PRS through legislation to do their job for them.
4 Likes
chris 35 Good points there. True about the paperwork not wanting the responsibility and to control us. Now there must be council people whe read these posts , why do we never hear from them? Are they cowards , too afraid of our response?
3 Likes
I am afraid I would prefer not to take Housing Benefit Tenants. I have done this in the past only for the authorities to discover the tenant was working and not qualified to receive the benefit. Because it had been fraudulantly claimed and I’d received the funds directly from the council, I had to repay it all. It was more than six months of rent, then the tenant stopped paying rent altogether and I didn’t receive any further rent until finally evicting them. This was supposed to be my pension. Yes, working tenants can stop paying rent, but I don’t have to repay what they have paid. It’s sad for all those honest tenants on benefits, but the risk is too high for me.
4 Likes
exactly so This can happen . It has never happened to me as I dont take on HB tenants No matter what anyone says the risks are greater
Madness, it makes no sense for the council to claim it back from you. (was this perhaps because the benefit was paid direct to you, rather than via the tenant? That would be a possible downside to having payments made directly)
Benefits paid to a Landlord can always be clawed back if the tenant has made a false declaration (lied). If they dont answer a query from the council the payment will stop. Stear clear.
1 Like
My historic rule has been never to take HB tenants. In saying that in recent years I have found that so many people are on HB that one has to be selective in choosing the right tenant.
There are many people who have had good jobs, families but who have fell on short term difficult times vv the those who dwell on the benefit system and have no respect for people, family or property (it has to be said as we know there’re out there).
Those in the former tend to be good tenants and I have bent over recent years my rules to find that all in one case have I had good long term tenants whom I have excellent relationships with. A key factor in communicating and ensuring both sides are happy with the tenancy. I also find that as these tenants get on their feet they stay 3-4 years and are happy to work with me over 2-3 months to find a new tenant (without voids) and allow me to get the property redecorated and up to our spec for the new tenant. A major plus for the landlord and it really helps the tenant deposit.
Only in one case did I have a tenant who went sour, whilst rent was paid the damage was significant and the lesson I learnt from that was to not renew an AST without renewing the guarantor. Now all my properties have guarantors as standard so even if HB potential tenants must have a guarantor with their own (not rented) property. Landlord’s are getting squeezed in many areas and we must ensure we are protected with this last method of tenancy.
When advertising you could save a lot of wasted contact by using some or all of these:
- Make your advert clear
- Give a typical profile your tenant should be, profession, working
- Ensure you state the maximum number of people in the property (over time you’ll learn with experience why!)
- You could even add a point of affordability, even add a quick list to aide those potential tenants to show income vv livability but with the statement that the list does not cover everything but a guide. Note if UV tenant the housing association should undertake and copy you an affordability copy from the tenant.
- State guarantors with own (not rented property) will be required
- Ensure your pre enquiry mandatory questions are comprehensive to filter out hopeful time wasters and hence ensuring pre qualified (1st stage) prospective tenants.
- Speak to prospective tenants from 5. if you cannot meet them, video conference using one of the many apps available.
- If the new tenant is local, arrange a meeting at their home, a good guide to how they keep property.
- Look on FB and other media to view prospective tenants.
- Landlords are not charities, do your due diligence as though you are running a business (which you are).
- Do not go for the sympathy when choosing, use the facts , even when you have good facts; fall back on your gut feeling. Very often no matter what you see or hear , the little voice inside you gives the best advice.
- If you can have your own website, list your property (ies), add links to the deposit and anything else appropriate. I also have a secure property by property tenant access which holds all the certificated, user guides, links to professional bodies and I ask the tenant to confirm via email when read and understood. This covers you in many cases where you must provide information to the tenant. It also ensures you only have to provide or update in one place. WordPress is free and fairly easy to learn with lots of video tuition. It doesn’t take much maintenance and saves you so much time in the long term. It’s also a good place to keep more property photos and videos to assist online viewings.
- When you’ve done the above you’ll find renting more enjoyable, easy to maintain and a better return on your efforts.
- Most sensible tenants will have contents insurance, if you request these include accidental damage and the landlord’s fixtures and fittings this helps everyone. If the tenant accidentally damages something that is covered their insurance may cover it and helping to protect the tenants security deposit. If their washing machine causes damage to another property all parties may have redress. So this request will help. I have had a couple of instances where this has happened and all parties were protected. I would add one comment that you suggest the tenant has a non voluntary excess contribution. It only costs a few pounds more and in the event of a claim will pay dividends. A HB or UV tenant may find it more difficult to find the voluntary excess fee.
- Of course you don’t have to do any of the above, you may use your years of experience to aide you or perhaps you may find one or two ideas above to make your life a little easier when renting to UV, HB or other tenants.
Good luck
5 Likes
This thread has really gone way off the point here and become yet another set of posts for and against benefits tenants.
The point of the post was to alert landlords to the risk they are facing because of a structural issue with the Openrent website, namely that the “DSS income accepted” button could lead to them breaking the law. Can I urge other landlords to complain directly to Openrent about this as we will otherwise see more of these cases going to court or costing the landlord thousands of pounds in out of court settlements.
3 Likes
Hi David,
There are cases where landlords have mortgage terms, conditions from superior landlords (e.g. freeholders giving leaseholders permission to let to tenants) or insurance terms such that they can’t let the property to tenants who claim benefits. The Competition and Markets Authority (CMA) requires agents to present consumers (tenants) with material information about the transaction so as not to mislead by omission. (See pages 23 and 24 here.)
In these cases, it is appropriate therefore for the landlord to include this information at the earliest possible opportunity (i.e. in the advert), since enquiring tenants would clearly need to be abreast of it in order to make an informed decision about enquiring to the property.
We allow landlords to advertise ‘DSS income accepted’ because of the existence of cases described above. A rather different scenario is where landlords who have no justification for rejecting all benefit claimants, advertise ‘No DSS’ or similar, and in doing so indirectly discriminate against people on the basis of their protected characteristics. Such a policy from the landlord may indeed risk that landlord being challenged. But OpenRent has always advised all landlords to assess each enquiry on its own merits and not to have blanket policies that reject whole categories of tenant.
The cases which have reached a judgement in court are the most extreme cases, where two agents both had explicit ‘no DSS’ policies, where they made no defence or attempt to justify their policy, and where the tenant being represented was arguing they were being indirectly discriminated against on the basis of a characteristic protected by the Equality Act.
I think it’s fair to say that landlords who have a blanket policy of discriminating against tenants on the basis of protected characteristics, with no justification, have always faced the risk of being sued, since this has been illegal since the Equality Act commenced in 2010. I don’t understand the recent court cases to have changed anything on that front.
I hope this helps answer your original question,
Sam
2 Likes
Sam, the legal opinion of the lawyer that led the recent prosecution in the Tyler v Paul Carr case was that these mortgage terms and/or insurance terms were almost certainly also illegal and that they were gradually disappearing as Shelter and others were challenging them. She even urged landlords to challenge them as they are potentially leading them to commit an unlawful act. It seems likely that within the next few weeks we will see all such terms scrapped.
1 Like
J113,
I don’t take out landlord insurance against non payment. Why? Because in the areas I buy, they won’t offer it. Also, they won’t offer it anywhere in the current situation. So I have to manage my own risk. Wouldn’t you do all you can to mitigate risk to your income? Property rental is my sole scource of income. If I don’t get paid, I don’t eat, or pay my mortgage. Is my own home being at increased risk worth it so you can have a nicer house? I think not.
I’ve banged on a lot about this but I now tell DSS tenants that they are welcome if the benefits authority will sign as legal guarantor, which they won’t. Why is that? Maybe they don’t trust claimants to pay us? I’m yet to receive an answer to that question.
It’s not landlords that are being unfair, we are simply protecting our income. It’s those paying the benefits that you need to turn your attention on. Have you even asked if they will act as guarantor in a legal capacity? It’s you that needs to start asking for something to be done, not us. Why would we take a risk on a benefits tenant when other options are open to us? It would be silly as its UC that are the untrustworthy party.
You say the money is guaranteed, it’s not. I’ve ended up in court twice because the benefits agency changed their rules & stopped paying. All it takes is one politician to change their mind about which demographic they want to impress & that’s us lot out of pocket. So far, my losses total just over £1000 because of political system changes. And that’s after 2 court battles that meant I lost 2 days I’ll never get back. How fair is that?
Please don’t lecture us on how awful we are. I’d rather you put your energy into getting UC to act as legal guarantor. That’s all we need to make this argument go away. Come back to me with a reply from them please. Why won’t they sign an AST as guarantor? I’d love to see their squirmy response.
In response to the original question, if you’re not confident about ticking the no DSS box, add a statement to your ad. DSS welcome on production of a letter from Universal Credit confirming they will sign as legal guarantor to the AST. Job done.
7 Likes
UC are never going to act as a guarantor as it can’t be known what the benefit entitlement would be throughout the tenancy period. Why should the taxpayer guarantee rent when the tenant may no longer need support?
I allow UC tenants, normally this would require a personal guarantor who is often in a better position than a lot of tenants so can give a landlord more security not less.
I have no intention of getting involved in benefit system as if tenant doesn’t pay then the guarantor has to although claw back now only applies to landlord if the landlord personally lied or didn’t report an obvious error such as being paid too much rent. I believe this changed a while back.
1 Like
A bit more info here on ‘clawing back’ rent in our post, 8 Things Landlords Need to Know About Universal Credit.
If I rent to a benefit fraud, will I have to pay back all the rent I collected?
“A landlord will not be expected to pay back the housing element unless they are in some way complicit in the fraud.
“If a landlord is being paid directly and they are aware that a tenant has moved out and they continue to get payments, then this will result in an overpayment and the landlord could be asked to repay the over paid amount.”
You may be asked to repay some or all of an overpayment by Universal Credit, if you’ve:
- misrepresented or failed to disclose relevant information
- been paid more than the rental liability amount
- received payments after the claimant has moved out
1 Like
problem is we dont trust the council they always want to stitch up landlords and get back as much as possible in licence (TAX) fees. anything to fill their coffers. , the charges for permits for work on buildings, ,for skips, for council services, the add on for overheads are outrageous .Makes Dick Turpin look like a saint.
4 Likes
I would like to hear comment from landlords that rent directly to the council for them to install benefit tenants under their direct management, and how that experience has worked out for them.
I believe they are mostly in the South / London boroughs, but I could be wrong.
It appears to me to be the only way to solve the problem, unfortunately the majority of Councils are afflicted by ‘clavicus inclinus’ (slopping shoulders), and have no inclination to accept any responsibility for the tenants they purportedly support.
I have an application from an 18 year old the Lancashire Council want to house and mentor in the real world. They have written a glowing reference, and confirm they will provide him with support and direction until he’s 25. Initially it was confirmed the UC payments would be paid directly to the landlord, then when I asked for written confirmation, suddenly it became a job for the tenant to get UC’s agreement to direct payments of rent…
I also asked for a written undertaking from the council, that they would intervene if the young man become a nuisance and disturbance to the other tenants in the block, to remove him without the need for legal recourse of an S21 / eviction by the landlord. Since the introduction of the current Covid restrictions on evictions, this is my biggest concern.
Finally I’ve insisted the council stand guarantor for the duration of his mentoring, whether on benefits or working independently.
My agent, who is obviously keen to fill this vacancy on our behalf, has replied that they don’t believe this will be forthcoming. The final outcome being that he will be rejected without the guarantees.
I know from past experience of a very mature woman renting, with the support of the abused women shelter / organisation, that when things go wrong they disappear into the ether, and all the promised support simply vanishes, and the landlord is left to their own devices.
As I’ve said previously, if the council are unwilling to provide social housing for HB tenants, and are also unwilling to stand guarantor for those who cannot provide a private one, then this situation of landlords objecting to HB tenants will continue.
3 Likes
Your view that you would be on your own without any council support is correct. Do not trust a local council in anything they say
5 Likes
Even donot trust UC as they do not pay directly to landlord once the property is rented.
It says Landlord can claim directly but UC do decline direct payment.
Because recently I got an experience and taking their time more than what we think it should take.
Only way is that UC or council or government have to become a guarantor and I don’t think that will ever happen.
3 Likes