Reducing rent to help tenant but he's on LHA

[churton]

We have been aware that a good tenant of ours has been having difficulty with rent and were considering lowering rent by £10 week to help keep her at property. Was told on this forum that we needed to do new AST which would mean lots of palava and protecting original deposit etc. Today we have recieved form from local council asking for info as she is claiming housing benefit. What sort of ways do you advise to help tenants. Can we contact council about this?
Thank you

[socrates]

Is your tenant on HB or LHA - if HB it is worth converting them to to LHA - before I give a full answer let me know which they receive

[churton]

Hi there,
I am assuming it will be LHA as is applying now and has private landlord
Thanks

[socrates]

OK confused here are they currently private tenants of yours who have fallen on hard times and are moving across to claiming benefits?

What are the first three letters of the property postcode and what is the weekly rent at present before any reduction you intend to make?

[churton]

Sorry to confuse you:), yes you right she has fallen on hard times. The weekly rent is £140 Post code CH4.
Thanks

[socrates]

I am assuming its 3 bedroom - LHA rates West Cheshire (£150.00 per week) or Wirral (£137.31 per week)

They can claim this amount which will be paid to them directly and you have to arrange with them to pay you.

If they are working they will have to contribute.

Visit the Benefits Office with them and make sure they give written permission for you to be able to discuss their claim.

Read some other threads on here for more tips.l

[Michael Clayton]

1. You are charging £140.00.
2. The LHA is not known. (You have not said how many bedrooms and/or occupants there are).

You can keep the existing AST. There is no need to go through the "palava" of changing it. This is because you can negotiate at a lower rate - but this might not even be necessary!

To explain:-

If your tenant's LHA is equal to (or greater than) £140.00, maximum rent will be awarded for HB purposes. The only shortfall will occur if their means test shows an income level that is above the level of need.

Example:- Income (£70.50) versus level of need (£60.50). Excess income £10.00. (65% of excess i.e. £6.50 is then deducted from maximum rent).
That is £6.50 is taken away from any HB. So if you decide to cut the rent (for example) to £130.00, you are not helping your tenant as they will still have to pay £6.50.

However, if your tenant's HB is less than the rent payable, then you can help in those circumstances by reducing the rent payable down to an amount closer to the LHA. And don't worry about setting a level of rent that is lower than on the AST. You are not ripping the council off. This is because the LHA would cap the amount of HB in any case.

Hope this makes sense!