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View Full Version : Is 'private' tenant better than HB/DSS/LHA-funded?



pierccl
16-04-2008, 17:19 PM
Hi

Just about to do (fingers crossed) my first property rental and I would appreciate some feedback on if it is wise to accept DSS tennants or what I call private tennants.

I understand that if you have DSS they pay under market value rent - is this true - sorry still finding my feet in this game

Any advise would be welcome :D

Thanks

Colincbayley
16-04-2008, 17:28 PM
DSS/HB/LHA tenants ( all the same thing ) You charge what ever rent you wish, the tenants now claim Local Housing Allowance if they wish, this will be paid direct to the tenants and the tenants then pay you ( With any top up if needed )

I would look at the tenants as people rather than private/benefit tenants as there are good and bad on both sides. I have turned down an accountant before earning £50/60K PA and went for the single mum on housing benefit. Reference your tenants fully and go by your gut feeling on someone.

Good Luck.

caroline7758
16-04-2008, 19:45 PM
If you want to know what the LHA rates are for your area, look on your local authority's website, or look here:

https://lha-direct.therentservice.gov.uk/Secure/LHARateSearch.aspx?SearchType=PostCode

Remember the rates depend on the household size, not the property size,and that is the maximum they will get, before means testing.

agent46
16-04-2008, 19:55 PM
Some DSS tenants are OK, but there are a few things to consider, IME:

1) Naturally, they tend to be at home a lot more than working tenants, leading to greater wear and tear on the property.

2) They often have children, again, leading to greater wear and tear on the property.

3) They sometimes are, not to put too fine a point on it, particularly civilised. Think "The Jeremy Kyle Show" or to use a current example, Karen Matthews and her ilk, and you get the idea. As such, collecting rent arrears, or dealing with breaches of tenancy can be fraught with problems.

4) If you want to regain possession of the property, DSS tenants will usually only move out when forced to do so by the bailiffs. The reason for this is not willful awkwardness on their part, but simply that most councils (erroneously and unlawfully) tell them that they are not deemed to be homeless until this happens. As such the council will not house them until they are almost literally out on the street.

5) Housing Benefit is paid in arrears.

6) Housing Benefit can be a bureaucratic nightmare for both LL and tenant and payments can often be erratic. When I was doing pro bono work in the County Court, I would estimate that approx 70 - 80% of the defendants in rent arrears possession actions were facing eviction because of administrative problems with their HB payments.

7) DSS tenants don't often have a deposit.

8) DSS tenants, being entitled to legal aid, and having a great deal of time on their hands, are a great deal more litigious when it comes to claiming disrepair etc. In their defence, this may simply be because DSS tenants tend to live in lower standard property. Nonetheless, I have come across quite a few who despite having almost hopeless cases which no-one would fight if they were being funded privately or on a no-win-no-fee basis, are clearly being advised by solicitors who are quite riding the legal aid gravy train.

Just my twopennorth....:)

caroline7758
16-04-2008, 20:16 PM
Tenants can be on Housing Benefit (DSS hasn't existed for years) for many reasons- disability, ill health, etc and should not all be tarred with the same brush.
People not on benefits also have children...
I could go on, but we've had this discussion many times before.

Colin summed it up nicely.

agent46
16-04-2008, 20:23 PM
Colin summed it up nicely.

I think Colin has probably been lucky......;)

Colincbayley
16-04-2008, 20:51 PM
I think Colin has probably been lucky......;)

Luck has nothing to do with it, Good planning, careful referencing of tenants and going with gut feelings is the key.
You can not say that benefit tenants are bad and working tenants are good, it just does not work that way.

House
16-04-2008, 21:06 PM
Agent46's point 4 is an extremely good one. Shortsighted LA's shoot themselves in the foot with this unlawful behaviour as they lose landlords who would otherwise rent to LHA tenants.

As to point 8, being a supplier of Community Legal Service Housing advice I would like to say that there should always be sufficient benefit in every case. A provider must have in mind 'would a person who couldn't wasn't eligible for legal aid pay for the legal help you are providing'.

Unfortunately CLS providers aren't terribly well audited in my experience and a few words here and there in the case write up can show sufficient benefit.

I would also say that I'm an ex housing benefit tenant and they aren't all bad. Trouble is there are probably disproportionately more bad ones compared to non LHA tenants and one cannot really blame landlords who cannot afford to take the risk decide not to rent to LHA tenants.

agent46
16-04-2008, 21:30 PM
Luck has nothing to do with it, Good planning, careful referencing of tenants and going with gut feelings is the key.
You can not say that benefit tenants are bad and working tenants are good, it just does not work that way.

Yoyu've rather run away with the point I fear. I did not state that DSS tenants are bad and vice versa, I merely pointed out the potential pitfalls of dealing with such people. However, if pressed on the point, I would say that on the whole, they do represent a much greater risk than employed people, and in that sense, speaking in actuarial terms, on a cost/benefit basis, they are a bad risk. Moreover, I realise it's probably an extremely un-PC view, but leaving aside those DSS tenants who are reliant on benefits merely by dint of their unfortunate circumstances (eg: the disabled etc), those on DSS are, more often than not, in that situation due to their fecklessness or unemployability. In other words, probably not the sort of people one would choose as contracting partners for a long term business relationship where one's major asset is at risk.

LL/LA's don't specify "No DSS" out of some Daily Mail inspired fit of middle-England spitefulness, they do so based on experience.

Just by way of example, not long ago I was talking to a Housing Officer from a large Housing Association. Approx 80% of their tenants are on benefits. In the course of our conversation, she informed me that around 60% of the rent due to the Housing Association is more than a month in arrears at any one time.

Moving on, even leaving aside the character of the DSS tenants themselves, most of the factors that militate against letting to such tenants are, even if the tenants are utter paragons of virtue without a stain on their character, beyond either the LL or tenant's control. About half a dozen of those reasons are listed in my post above.

Colincbayley
17-04-2008, 07:15 AM
Well, from my experience, there is no difference between benefit tenants and private tenants. The source of someones rent, does not seem to make a difference. It is the person behind it that makes a difference, and in my view excluding all benefit tenants is a no no as you would miss out on some view good people.
As I have said above, there are good and bad on both sides.

barkinbunnies
26-04-2008, 17:51 PM
As a single parent on a low income and living in an expensive area I am in receipt of housing benefit. I do work but my wages don't stretch to the full rent. So I get some help from my local authority.

Whenever I look to renting in the private sector I always take my mum with me when viewing a property. That way the landlord or agent can get to see I am a nice person and that I have 'back up', as in my mother is not sort of a bob or two. Maybe look for things like that, I know the landlords have found meeting my mum reassuring.

But I fully understand why landlords are put off from DSS, the benefit system is a nightmare.

Each time I have moved it has taken at the very least 2 months for the local authority to process the claim. Normally resulting in my mother lending me 3 months rent. However, once it took the housing benefit people 10 months to sort it all out.

Plus the housing benefit people have an applicable rent amount that they set. When I moved in to my current home they said I was paying £75 pcm too much for my rent so they reduced my benefit accordingly. I appealed this and won, but this all took ages.

So I guess if there is a source of help and they seem nice then it shouldn't be a problem, I have never missed a payment and unless something is urgent, like the boiler breaking, I don't make a fuss.

AndyT
26-04-2008, 23:39 PM
We took our HB tenant on because the checks we did came back ok, and we know a woman in similar circumstances who has been a fantastic conscientious tenant.

Our tenant turned into a nightmare 2 months into tenancy and continues to be so. We've been threatened and intimidated to the point we had to call in a solicitor to act as our agent.

Last night Sat, we found out tenant is moving out as police were called in to settle a fracas between our tenant boyfriend and our friends who live next door to rental. The boyfriend told police they just want to move furniture out and get away from the property as soon as possible, of course tenant not given notice and unlikely to return keys so probably go to court to get possession legally. We will begin process on Monday.

From this experience we would only accept another HB tenant if they personally recommended from friends who will act as guarantors and take equivalent of 6 weeks cash deposit prior to handing over keys. The tenant wrote us a dud cheque.

We are prepared for our next tenant and fully prepared to run them through pre-application process as listed on RLA website.

Good luck getting a decent tenant.

johnboy
27-04-2008, 08:13 AM
I have no objections to accepting HB tenants. But i find only accepting them if they pay the deposit and first month rent themselves helps reduce a lot problems you can get.

If someone has their own cash tied up in the property that is a very good reason to look after it and when they move out to leave it as they found it.

susanne
27-04-2008, 09:07 AM
""It is the person behind it that makes a difference, ""

couldn't agree more colin - i have had no problems with any of my own single parent mums - but had problems with two working tenants. (I manage for other landlords also).

LHA is now significantly more than i was charging rent in 3 areas where i have property .... for that reason i think its worth looking at LHA tenants.

i am asking for a LHA tenant to have 2 bank accounts - one for their rent (and then Standing ordered over to me) and another one for their personal money - that has worked very well in the past

re "bounced" cheques - i never accept personal checks - i only take cash or a building society cheque for the deposit/first months rent

caroline7758
27-04-2008, 09:53 AM
[QUOTE=susanne;72658

LHA is now significantly more than i was charging rent in 3 areas where i have property .... for that reason i think its worth looking at LHA tenants.

[/QUOTE]

Lucky you- and your tenants! In York, which has been put in the same area as Selby, the LHA is lower than rent service assessments were before (though of course in Selby it's higher), so it does depend on the area.

Colincbayley
27-04-2008, 09:56 AM
Lucky you- and your tenants! In York, which has been put in the same area as Selby, the LHA is lower than rent service assessments were before (though of course in Selby it's higher), so it does depend on the area.

Also, this will change over time, as the LHA is looked at on a rolling month by month basis. As such the rates will change. It is still very early days.

starlettings
27-04-2008, 10:07 AM
Hi

Just about to do (fingers crossed) my first property rental and I would appreciate some feedback on if it is wise to accept DSS tennants or what I call private tennants.

I understand that if you have DSS they pay under market value rent - is this true - sorry still finding my feet in this game

Any advise would be welcome :D

Thanks


I make a rule, i only rent to people who work for a living. Id put the BUMS on a remote island and feed them rice

agent46
27-04-2008, 13:01 PM
Some DSS tenants are OK, but there are a few things to consider, IME:

3) They sometimes are, not to put too fine a point on it, particularly civilised. Think "The Jeremy Kyle Show" or to use a current example, Karen Matthews and her ilk, and you get the idea. As such, collecting rent arrears, or dealing with breaches of tenancy can be fraught with problems.

4) If you want to regain possession of the property, DSS tenants will usually only move out when forced to do so by the bailiffs. The reason for this is not willful awkwardness on their part, but simply that most councils (erroneously and unlawfully) tell them that they are not deemed to be homeless until this happens. As such the council will not house them until they are almost literally out on the street.

6) Housing Benefit can be a bureaucratic nightmare for both LL and tenant and payments can often be erratic.

8) DSS tenants, being entitled to legal aid, and having a great deal of time on their hands, are a great deal more litigious when it comes to claiming disrepair etc. In their defence, this may simply be because DSS tenants tend to live in lower standard property. Nonetheless, I have come across quite a few who despite having almost hopeless cases which no-one would fight if they were being funded privately or on a no-win-no-fee basis, are clearly being advised by solicitors who are quite riding the legal aid gravy train.

Just my twopennorth....:)

I think this recent thread helps prove my point as all the issues listed above are present in his case unfortunately: http://www.landlordzone.co.uk/forums/showthread.php?t=10948

Colincbayley
27-04-2008, 13:40 PM
I would have to disagree with Agent46, I have found HB ( DSS ) Tenants to be OK, I have had more problems with working tenants than I have with HB ones.
As I have posted before, I don't think you should judge people just because they may be on HB, a balanced view would be a much better stance.
( There is good and bad in both types of tenants )

evsenos07
27-04-2008, 14:34 PM
I make a rule, i only rent to people who work for a living. Id put the BUMS on a remote island and feed them rice

very constructive, theres always one isnt there.

caroline7758
27-04-2008, 18:47 PM
Surely with the price of rice rising, potatoes would be preferable anyway?:mad:

Nic
28-04-2008, 11:03 AM
We used to not mind taking HB tenants. But since the new LHA we haven't. Basically not sure how long it will take a claim to go through and if the tenant will pay direct on time. We have has just one tenant do a midnight flit and it was a working tenant. We currently have a tenant that is moving out the end of this week. But the worrying thing is, that they are HB tenants and the h/b have stopped a payment for some reason and the tenant doesnt seem to be that bothered even though the payment is about £800. Not sure how we go about getting this back as obviously the tenant hasn't that amount of money. And the H/B don't know if it will be paying up. Tried to contact tenant but as usual no answer to any of my calls or texts. How do we get a forwarding address if they are not prepared to give it?

Colincbayley
28-04-2008, 12:02 PM
How do we get a forwarding address if they are not prepared to give it?

You might have to employ the services of a tracing firm. Do you have copy i.d's ( N.I number driving licence etc ) ??

Nic
28-04-2008, 12:31 PM
I have their NI number. They dont drive or have a passport.

Colincbayley
28-04-2008, 13:14 PM
I have their NI number. They dont drive or have a passport.

In which case, at some point in time, they will either get a job, claim benefits or retire and get a pension. As such a good tracing agent will track them down. Shouldn't cost more than 50 quid or so and most advertise as no trace no fee.

leilaanvar
01-05-2008, 14:57 PM
I make a rule, i only rent to people who work for a living. Id put the BUMS on a remote island and feed them rice


This is getting STUPID, i am a student with a young daughter.
i have been looking for private housing for 5 weeks now and NOBODY TAKES HOUSING BENEFIT.

i pay my rent on time EVERY MONTH money is tight BUT i would NEVER put myself or my daughter in to a position of losing my house due to dipping in to rent money!!!!
this is ridiculous, i am not a junkie or sitting down on benefits for the sake of it im at college trying to better myself and get a career.

i am a good clean tenant,i am well spoken, my daughter is well behaved i have my first months rent and deposit.
i do not look like i should be on the jeremy kyle show, i was brought up not dragged up.
eastate agents and landlords have bought me to tears because they have been so rude to me lately

LANDLORDS SHOULD NOT TAR US ALL WITH THE SAME BRUSH!!!

They are discriminating against us because they think we are all low life scum and we are not ....... they should think about this next time they say no ...IT MAKES ME SICK!

and as for the comment i quoted at the top , i hope you are in this position one day through no falut of your own and i hope you are made to feel like scum every time you pick the phone up to ask about a property.
you have no right to talk about people like that

Colincbayley
01-05-2008, 15:03 PM
Not all landlords are the same either. Some except HB/LHA tenants some don't. It is just a matter of finding them.

There are good landlords and bad the same as there are tenants!

I would be more that happy for you to consider one of my properties and I judge all tenants on them, not their method of payment.

leilaanvar
01-05-2008, 15:12 PM
Not all landlords are the same either. Some except HB/LHA tenants some don't. It is just a matter of finding them.

There are good landlords and bad the same as there are tenants!

I would be more that happy for you to consider one of my properties and I judge all tenants on them, not their method of payment.

its nice to know that you are not all the same...where do you have properties ??? :)

boredbird
01-05-2008, 16:15 PM
There are good and bad in all walks of life.
Some people on benefit are there because they have no intention of working, others are claiming through not fault of their own, doesn’t make them bad people.
Private tenants also, some are great, and some with good jobs can be a nightmare.
I think who ever you get, the way you speak to people and treat people makes a difference, going on your own instinct. There are several people on here lately, who can show their rudeness and arrogance in a forum. They are apparently agent's no wonder they get problems, talking to people like s..t.
I have not been on here for a while, but I am disappointed to see some people have made it into their own soapbox.

jeffrey
01-05-2008, 16:23 PM
I have not been on here for a while, but I am disappointed to see some people have made it into their own soapbox.
I agree. See http://www.landlordzone.co.uk/forums/showthread.php?t=10884.

attilathelandlord
01-05-2008, 16:24 PM
Zere vill be no exceptions!

agent46
01-05-2008, 16:31 PM
.... but I am disappointed to see some people have made it into their own soapbox

Saunters by, whilstling innocently, hands in pockets :p


I'm not sure whether you are specifically referring to me, but I have been accused of such things over the last week. In mitigation Your Honour, I am a man of good character, I smile wistfully when I see kittens playing with a ball of wool, I do a lot of good work for charidee and I was terribly, terribly provoked.

paulkay
28-05-2008, 10:48 AM
I have only ever used private tenants which have been fully checked out before hand , I have never had any problems so far.