Hi,
I’m going to share my very recent and still current experience and I hope it prepares others. If I’d known what I now know I would have been much better prepared.
I know not everyone is the same and I know what mistakes I made (I should never have gone ahead). This is a share of what I am experiencing (its not over as I write) and I am not saying it applies to everyone.
When you see the question on the boards “thinking of taking on a council / DSS tenant” almost everyone will reply “don’t do it” . If you are inexperienced or just haven’t come across this before (like me) then the question you might ask yourself is “Why not ?” Council pays their deposit, Universal Credit pays rent…
I accepted a DSS tenant. She seemed nice enough and the property was perfect to her stated needs, near a school, she said she couldn’t drive, needed a fresh break etc. I was helping another person who could do with a helping hand and I was told by the council that Universal Credit would pay her rent direct so it seemed low risk. The council even checked the AST and were happy all was in order, so I took her on. The problems that follow pretty much started within weeks.
So to put right a myth. Universal Credit pay rent direct.
No. UC could pay direct but in fact the tenant has full control. After 3 months mine stopped paying yet still receives benefits in full. Now it is sporadic payments. I have applied direct to UC 9 times and for unknown reasons they won’t pay direct, I think the tenant tells them she is not in arrears or something I don’t know, but I don’t get rent as per AST, the closest to an explanation from UC has been “you need to discuss with your tenant”.
Deposit - council rent deposit scheme, guaranteed to pay the deposit.
No. A horrendous trap. In a nutshell the council say they will pay the deposit, its released to the landlord directly AFTER the tenant has signed and moved in and comes with (for me anyway) a proviso it must be repaid to the council. Once you have signed the document agreeing to this they release the deposit to you.
You must lodge the deposit BUT under the current deposit protection schemes the deposit is ONLY released/repaid out to the lead tenant i.e. not you or the council. There is nothing to stop them skipping off into the distance leaving you with the commitment to repay the deposit to the council.
I am sure this was not intentional but it actually makes the landlord 100% liable for the deposit, you have to hope the tenant will repay the council but you cannot force this to happen, you have full risk. So to repeat that, the deposit schemes pay out the council deposit directly to the lead tenant.
So in effect you are just giving the tenant the councils money but you are tied up to repay the council.
I didn’t lodge it but instead took this up with the deposit schemes and then my MP and the Minister for Housing who said you should get the council to agree with the tenant.
In my deposit court case the judge said I should have asked the council to take it up with the tenant. Great, but in 30 days that whole pathway was impossible to conclude, worse as I had already allowed the ‘desperate’ tenant to move in with a reworked (incorrectly) AST which in itself is a legal document so really was not possible in 30 days to find out and then change it to correct the pitfalls.
I can say here if you consider a DSS tenant you must treble check your AST for pitfalls. The council 3rd party deposits must be repaid to the council which I didn’t find out about until after tenant moves in and signs an incorrect version of the AST, I was liable.
I tried to resolve this and went outside the 30 days to lodge but I was assured by tenant she understood and the council assured us ‘we’re here with you every step of the way’
Not so.
I kept pursuing this with the DPS and went well over the 30 day limit and eventually they confirmed/they have told me “there is no provision within the scheme to pay the deposit directly to a third party”. So you cannot guarantee the council will get back the deposit they put up for the DSS tenant.
The benefit tenant (the lead) is paid the deposit by default - on ALL the systems.
Also you cannot put the council as a lead tenant. Why ?, you cannot have an organisation as a lead tenant.
My tenant went for the compensation she was ‘due’, she instructed a no win no fee solicitor and got 1.5x penalty (£1500). That’s what everyone tells you but what they don’t tell you is this. Consider, how do these solicitors make their money. My tenant won, I had to pay costs. Her solicitor submitted a bill of over £8500 in costs.
And of course I’ve had to pay my own solicitor as well which was about £2500.
That’s £12,500 and she didn’t even pay the deposit !.
How so?, well what the solicitor did in my deposit case (and its legal) was tie in a builders invoice demand from a company for £2500 + demand the max 3x deposit amount + 1x the deposit. I knew nothing of this work or company nor did I accept to pay 3x the amount, so I did not settle. They said their client was forced to pay this builder invoice to stop them hassling her, due to my apathy towards a poor single mother. Naturally no mention of the 2x antisocial behaviour complaints, withholding rent etc.
At the last minute they withdrew half their case accepting the deposit was lodged, but out of time. As its a deposit case the invoice was not brought up and the judge ignored it but it seems didn’t ignore costs that were involved with action they didn’t take.
Over £8500 in costs presented yet I exchanged just 12 letters/emails with her/my tenants solicitor and never spoke to them on the phone.
But it doesn’t end there. I now am also facing a dilapidations charges/court case, my tenant says the work done by the company (she says ‘instructed by me’) that she was forced to pay was shoddy and needs more builders in to repair. She wants compensation for substandard uninhabitable living. I am accused of renting with damp issues, no hot water or heating.
Yet none of this exists.
They have said that their client was forced to pay the builders who were harassing her (because I had not paid them) and was ‘forced to pay’ £2600. Where did that money come from? she has never paid deposit or rent and has arrears. Apparently the builders left the flat uninhabitable. Its all under “instruction from their client” so the solicitor is blameless.
I checked on companies house, not only was the company that she says she was harassed and forced to pay the bill of over £2400 non existent, it had been struck off over 3 1/2 years ago. But the last named director was her father. I told her solicitor this but they still pursued the bill for months saying it was me who instructed my tenants father. I’ve never met him in my life.
I am being shredded to pieces. I want to get the flat checked but every obstruction to gaining access to the flat is being put up. I had to instruct a solicitor. Its impossible to sleep with all the jargon and pre action protocols being sent out. She (tenant) asked Environmental Health to go round and has also instructed a surveyor, at apparently a joint cost. She/her solicitor say its uninhabitable, EH say “no its not” but apparently the Env Health report won’t get me very far, I will have to instruct a surveyor as well.
In under a year a DSS council tenant on benefits will have cost me close to £20,000.
DSS tenants, its easy money for solicitors. I spoke to my local housing partnership who themselves say the number of ‘dilapidations cases is growing’. All it costs a solicitor is time, their own time to make as much money as they can, the benefit tenant is legally aided or no win no fee.
For me as a landlord with a DSS/Council tenant its a case of how deep are your pockets. For me its become a case of how much finance can I raise to defend myself against this, can I re-mortgage etc.
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So when someone says late deposit might cost you 1x the amount, or “why not take on council/DSS?” you might want to consider what I am experiencing, its real. There is no way to avoid the above and you have to trust me when I say it was a lovely flat. She has ripped out the kitchen flooring and disposed of (or sold I don’t know) the cooker and there is nothing I can do about it, court action takes months and costs a fortune, DSS tenants are legally aided all the way. The deposit doesn’t cover arrears let alone anything else.
The real shame is that there are genuine people out there who need housing, I was one once, 30 odd years ago having a tough time but there is a growing number of non genuine. It affects your health, mental well being and everything you believe in humanity. I have increasing debts. All this in under a year. I so regret the day I said yes to her.
As for her rent arrears, they still exist and yet she still gets paid full UC for housing. There is something called offsetting and if you take a tenant to court for repossession based on say 2 months arrears if they can show the deposit not lodged or make a dilapidations/disrepair claim then these get taken into account (= more costs) and can be used to offset the arrears and bring them back under 2 months then you can’t use that. Back to square one.
But it doesn’t work the other way, I still had to pay the deposit compensation to the council tenant and the costs to the solicitor, but she has not reduced her arrears.
With social/DSS tenants I would ask myself if the worst happens can I afford to get involved in litigation with them, its no cost to them, they have nothing to lose; My own costs could be substantial and, as they are DSS, I will probably never recover these costs.
This article below is about 10 years old but still valid, eye opening, written by a solicitor for solicitors. Its about S8 but the pitfalls I have experienced are all there.
I am trying to get repossession (S8) but its been over a year and I still have many pitfalls in this, the law is full of technical defences. Would someone who has to pay their costs would get involved in a technical defence to what is obviously a repossession (i.e would they commit money for a technical point not a glaring error) but the govt provides legally aided solicitors to the DSS tenant for this matter = bottomless pockets.
