Hand keys to T without receiving first month's rent?

[MR M]

I know the answer to this is "Don't do it" and in normal circumstances I would always take the 1st months rent and deposit in cash before handing the keys over. In the past, I have always rented to tenants who are working and have never handed the keys over without doing the above but, I have a property that I am intending to rent to a young unemployed girl with a baby who is currently receiving DSS benefits. She has paid the deposit to secure the property (20% of the total rent amount) which I would normally deduct from the 1st months rent, so I have this up front, but she has said that she cannot pay the remainder of the 1st months rent on day 1 until she gets her housing benefit through. She says this should take about two weeks, but I have a feeling it might be longer ?

She says that she is OK paying the damage bond which is equivalent to the 1st months rent payment, which I have to protect within 14 days but she says that she cannot afford to pay the 1st months rent up front as well, which I can understand. Furthermore, I believe that I will always be in arrears with the rent payments, due to her claiming her housing benefit and then waiting to receive her payments ?

As I say, I have never rented to tenants on benefits before and would appreciate any advice from Landlords who do, regarding the above.

Also, can I request that the Local Authority make the rent payments direct to me to a) speed things up and b) make sure I actually receive the rent payments?

I have asked her to source a Guarantor who is in full time work and a house owner which she has and I will be completing a full Schedule of Condition Report prior to her occupation.

Any advice would be welcomed. Thanks in advance

[tom999]

I know the answer to this is "Don't do it" and in normal circumstances I would always take the 1st months rent and deposit in cash before handing the keys over.
Advice is not to 'don't do it' but do be aware that there are risks involved and do all you can to minimise them; many new landlord's (LL's) in this sector have been burn't - read the other posts in this section.

Single mother's with young children can be good tenant's (T). This usually works best if (1) T works part-time (or intends to), (2) T has a support network, e.g. family and relatives nearby who can help out.

Pre-tenancy, LL should ensure (ideally):

T has a guarantor who is a working homeowner.
Written permission from T to discuss claim with local authority (LA).
Claim has been approved by LA before accepting tenancy.
Deposit of 1 month's rent and rent (1 month's rent) in advance.



I believe that I will always be in arrears with the rent payments, due to her claiming her housing benefit and then waiting to receive her payments ?
Two things: (1) LHA claim is between T & LA (LL has no say in this). (2) Tenancy is between T & LL (LA has no involvement in this).

In most cases LHA payment is made direct to T and it's their responsibility to pay rent to LL on time. There is never any guarantee; LL makes a choice to accept T and takes the risk.

LA's typically pay LHA to T 4 weeks in arrears. Within 2 weeks of claim acceptance, T can apply for an interim (part) payment before next payment is made.


Also, can I request that the Local Authority make the rent payments direct to me to a) speed things up and b) make sure I actually receive the rent payments?


LA will not make direct payments to LL unless:

T is classed as having severe health problems (mental and/or physical) or difficulty managing their finances. (Direct payments to LL's stopped with the introduction of LHA in April 2008)
LL a registered social landlord.
LL is a Housing Association or council!
Tenancy started before 1989.
T is 8 weeks in arrears (even then, direct payments to LL are not 100% guaranteed).


Other things LL needs to consider:

Mortgage: whether lender accepts HB T's.
Insurance: whether covered for HB T's.

[Emma1973]

Tom has covered most of it, but in reference to the time scale in which her case can be processed is a lottery! If its just a case of moving one claim to the other then it can usually be done pretty swiftly. If its a new claim then it can be 8 weeks, averaging what most LA's are saying at the mo.

You can ask for an 'interim payment' or 'payment on account', but you have to wait until 14 days have passed before you can do this, and at that point it may not be for the correct amount of rent. But, the tenant has to supply absolutely everything needed to process her claim before this can be done. If she slips up and doesnt give them all the info you could be waiting the full 8 weeks. Local Authority may try to tell you interim payments are discretionary, they arent, everyone claiming LHA or HB is entitled to one!


direct payments to LL are not 100% guaranteed

This is only on 2 grounds, the LL is not a 'fit and proper person', and 'when it is in the overriding interests of the claimant to continue to have the LHA paid direct to them'

Fit and proper counts for such things such as LL being involved in fraudulent activity, had sanctions against them, not told them of change in circumstances, refused to pay back overpayments, etc. However if T still has arrears the payment does not go to them, but the LA come up with other ways of making payments.

Overriding interests usually comes about when T's are witholding rent to carry out their own repairs. Only considered when T has been advised to do so, and is using the proper process!

Other than those two, the LHA must be paid to the LL.

Just keep your eye on the payments, and the minute that 2nd payment is overdue write off to the council to request payment to yourself! However, they will not consider this until 8 weeks has actually passed. And if she manages to bring it to under 8 weeks, payment revert to the claimant.

And thus ends todays lesson on HB/LHA!

[MR M]

Thanks for your response Tom999,


Advice is not to 'don't do it' but do be aware that there are risks involved and do all you can to minimise them; many new landlord's (LL's) in this sector have been burn't - read the other posts in this section.

Have started reading other posts with interest already and will continue on with this


Single mother's with young children can be good tenant's (T). This usually works best if (1) T works part-time (or intends to), (2) T has a support network, e.g. family and relatives nearby who can help out.

She has noted on her Tenants application form that she does not do any part-time work but her family are close by and her Mum is now going to act as Guarantor


Pre-tenancy, LL should ensure (ideally):

T has a guarantor who is a working homeowner.
Written permission from T to discuss claim with local authority (LA).
Claim has been approved by LA before accepting tenancy.
Deposit of 1 month's rent and rent (1 month's rent) in advance.



Guarantor (Mum) is a home owner (mortgaged) and is in full time work. Yesterday, I dropped off the Guarantors application form downloaded from LLZ and await its return
Is permission to discuss theTenants claim just a letter which I would draft getting the Tenant to sign and sending to the Local Authority or something more formal ie a specific form from the LA?
The Tenant is leaving one rented property to move into mine and already has a claim in place for receipt of her current housing benefit payments. Can the Tenant make the claim to the LA, prior to the expiry of her current Tenancy Agreement or must she wait until the day/day after my AST commences to notify the LA? ie can she submit her claim in advance of her moving-out date?
The Tenant can pay the damage bond on Day 1 but cannot afford to pay the 1st months rent also but has paid a 20% securing deposit deductible from the 1st months rent, so I'll have to just wait for the balance of the rent to come through when she receives her payment. Given that she is only swapping over properties and other than that, her circumstances are not changing, I would hope that this should be done fairly quickly by the LA (Here's hoping anyway)


Is there anything in the meantime which I would need to provide to either the tenant or the LA, to avoid any unnecessary delays? eg letter confirming the rent amount, my contact details, copy of AST with tenancy commencement date marked on etc. etc.



Two things: (1) LHA claim is between T & LA (LL has no say in this). (2) Tenancy is between T & LL (LA has no involvement in this).

In most cases LHA payment is made direct to T and it's their responsibility to pay rent to LL on time. There is never any guarantee; LL makes a choice to accept T and takes the risk.

LA's typically pay LHA to T 4 weeks in arrears. Within 2 weeks of claim acceptance, T can apply for an interim (part) payment before next payment is made.

I will see how receipt of the 1st payment goes and may look into the interim payment side of things in more detail.



LA will not make direct payments to LL unless:

T is classed as having severe health problems (mental and/or physical) or difficulty managing their finances. (Direct payments to LL's stopped with the introduction of LHA in April 2008)
LL a registered social landlord.
LL is a Housing Association or council!
Tenancy started before 1989.
T is 8 weeks in arrears (even then, direct payments to LL are not 100% guaranteed).


Other things LL needs to consider:

Mortgage: whether lender accepts HB T's.
Insurance: whether covered for HB T's.


I will check on the last two, thanks for the advice

[MR M]

Thanks for your response Emma1973,


Tom has covered most of it, but in reference to the time scale in which her case can be processed is a lottery! If its just a case of moving one claim to the other then it can usually be done pretty swiftly. If its a new claim then it can be 8 weeks, averaging what most LA's are saying at the mo.

Yes, it will be a case of moving one claim to the other as she is moving from one rented property to mine


You can ask for an 'interim payment' or 'payment on account', but you have to wait until 14 days have passed before you can do this, and at that point it may not be for the correct amount of rent. But, the tenant has to supply absolutely everything needed to process her claim before this can be done. If she slips up and doesnt give them all the info you could be waiting the full 8 weeks. Local Authority may try to tell you interim payments are discretionary, they arent, everyone claiming LHA or HB is entitled to one!

Is there a specific LA form which outlines what the Tenant must provide or would I be better speaking to the LA direct in the event of this happening?

[Emma1973]

Is there a specific LA form which outlines what the Tenant must provide or would I be better speaking to the LA direct in the event of this happening?

It cant be done by you, it has to be done by the tenant in writing. The T has to specify it is an interim payment that is applied for, not a discretionary housing payment as this is a completely different thing.


Is there anything in the meantime which I would need to provide to either the tenant or the LA, to avoid any unnecessary delays? eg letter confirming the rent amount, my contact details, copy of AST with tenancy commencement date marked

Yep, get all that ready so she can take it in immediately. If this is a definite move then she can tell the council now, some councils have change of address forms. If its a move in the same area she shouldnt have to make a new claim, if they insist she does, she can use the rapi-reclaim form. If she is moving from a different area, she can claim up to 13 weeks before she moves, but wont receive the money until she does.

So if its a def you are going to take her, get her to go to LA asap with the Tenancy Agreement, and fill in a change of address form. While she is there get her to ask whether she needs to make a new claim, LAs seem to differ on this, Richmond dont ask you to, Dover does :rolleyes: If she does then she has all the info with her to make a new one.

Is she on Housing Benefit at the moment, or Local Housing Allowance?

[MR M]

Thanks Emma1973,

I am not certain whether the Tenant currently claims Housing Benefit or LHA but she has only been in their current rented property for about 9 months. Would that mean that she claims LHA then? I can try to find out if the answer to the above is not yes.

She is definitely moving in though, so I am just drafting out the AST now.

Regarding "the Rent" section. I normally include wording along the lines of

"£500.00 (Five Hundred Pounds) per calendar month, payable in advance, by equal monthly payments on 1st of the month, the first such payment of £500.00 to be paid on the signing hereof"

however, this is not suitable in this situation as :-


She wishes to pay every two weeks instead of per calendar month as this is when her payment is received from the Local Authority
Her payments will not be "in advance" as she is unable to pay me until she receives her benefit payment. Should this therefore read "in arrears" or is that a different legal term?
Her 1st payment will not be received when the AST is signed, it will be received when she receives her first benefit payment, which could be some weeks later


Can any legal eagles suggest a line which I can insert into my AST which clearly defines the above and covers me

Also, my current AST still refers to the Housing Act 1988 - Is this still current or has it been re-issued at a later date or had any dated amendments which should also be noted in the AST?

[jeffrey]

The Housing Act 1988 as amended still applies, unless the letting is excluded by s.1 thereof or Schediule 1 thereto.

[MR M]

Thanks jeffrey,


The Housing Act 1988 as amended still applies

So at the start of my AST, Do I need to note the amendment date after my reference to "under the provisions of The Housing Act 1988 (as amended 19??)" and if I do, what date was it amended?


unless the letting is excluded by s.1 thereof or Schediule 1 thereto.

Could you clarify what this means please.

[jeffrey]

So at the start of my AST, Do I need to note the amendment date after my reference to "under the provisions of The Housing Act 1988 (as amended 19??)" and if I do, what date was it amended?
The 1988 Act was amended by the 1996 Act and others. Just show "Housing Act 1988 as amended"- that's sufficient.

unless the letting is excluded by s.1 thereof or Schediule 1 thereto.


Could you clarify what this means please.
Section 1 of the Act defines some cases which are outside the Act's scope; Schedule 1 to the Act lists others.

Here's a link to its text: http://www.statutelaw.gov.uk/legResults.aspx?LegType=All+Legislation&title=Housing+Act&Year=1988&number=50&searchEnacted=0&extentMatchOnly=0&confersPower=0&blanketAmendment=0&TYPE=QS&NavFrom=0&activeTextDocId=2128236&PageNumber=1&SortAlpha=0

[MR M]

Thanks jeffrey,

I was also hopeful that I might receive a suggestion on the wording which I could insert into my AST to cover the situation which I described earlier ie




She is definitely moving in though, so I am just drafting out the AST now.

Regarding "the Rent" section. I normally include wording along the lines of

"£500.00 (Five Hundred Pounds) per calendar month, payable in advance, by equal monthly payments on 1st of the month, the first such payment of £500.00 to be paid on the signing hereof”

however, this is not suitable in this situation as :-


She wishes to pay every two weeks instead of per calendar month as this is when her payment is received from the Local Authority
Her payments will not be "in advance" as she is unable to pay me until she receives her benefit payment. Should this therefore read "in arrears" or is that a different legal term?
Her 1st payment will not be received when the AST is signed, it will be received when she receives her first benefit payment, which could be some weeks later


Can any legal eagles suggest a line which I can insert into my AST which clearly defines the above and covers me

[jeffrey]

"£500.00 (Five Hundred Pounds) per fortnight, payable by equal fortnightly payments in arrears, the first such payment of £500.00 to be paid on the fourteenth day after the date of this Agreement"
Is my emboldened wording OK?

[Mrs Mug]

She wishes to pay every two weeks instead of per calendar month as this is when her payment is received from the Local Authority

Our HB tenant also pays us fortnightly. But this means that there are actually 26 payments per year not 24. Therefore to keep the rent equivalent to £500 per calendar month, we give our tenant two payment holidays a year. Otherwise, the rent you charge should be approx. £230 per fortnight.

[jeffrey]

But isn't HB/LHA paid four-weekly, not two-weekly?

[tom999]

But isn't HB/LHA paid four-weekly, not two-weekly?

In my experience, yes.

But, if HB/LHA does not cover rent, then T may be topping up with other benefits, which they may be receiving fortnightly.

[Mrs Mug]

But isn't HB/LHA paid four-weekly, not two-weekly?

Maybe different councils have different rules. But my tenant receives it fortnightly.

[MR M]

Is my emboldened wording OK?

Perfect. Many thanks jeffrey :)

[havensRus]

But isn't HB/LHA paid four-weekly, not two-weekly?

Maybe different councils have different rules. But my tenant receives it fortnightly.

Some Councils do indeed pay the LHA fortnightly. There is a tick box in the application form where the T can opt to receive every two weeks or every 4 weeks.

[havensRus]

"£500.00 (Five Hundred Pounds) per fortnight, payable by equal fortnightly payments in arrears, the first such payment of £500.00 to be paid on the fourteenth day after the date of this Agreement"

Is my emboldened wording OK?

The £500 is due per calendar month, but payment is in equal fortnightly installments. I'd have thought it should then read:

£500 (Five Hundred Pounds) per calendar month, payable by equal fortnightly payments of £230.14 in arrears, the first such payment of £230.14 to be paid on the fourteenth day after the date of this Agreement.

[MR M]

"£500.00 (Five Hundred Pounds) per fortnight, payable by equal fortnightly payments in arrears, the first such payment of £500.00 to be paid on the fourteenth day after the date of this Agreement"

Is my emboldened wording OK?

I used and adapted jeffreys wording above to read:

"£230.77 (Two Hundred and Thirty Pounds and Seventy Seven Pence) per fortnight, payable in arrears, by equal fortnightly payments, the first such payment of £130.77 to be paid on the fourteenth day after the date of this Agreement"

The reason for the initial payment being £130.77 BTW, is that the Tenant has aready paid £100.00 as a securing deposit, which I have agreed to deduct from the 1st rent payment.




The £500 is due per calendar month, but payment is in equal fortnightly installments. I'd have thought it should then read:

£500 (Five Hundred Pounds) per calendar month, payable by equal fortnightly payments of £230.14 in arrears, the first such payment of £230.14 to be paid on the fourteenth day after the date of this Agreement.

I haven't submitted the AST to the Tenant yet, so I can still alter the wording but is there any 'legal' difference between the two statements ie £500 pcm or £230.77 per fortnight?

I notice that there is a difference between your rent calculation per fortnight (£230.14) and mine (£230.77) havensRus. I worked it out as £500 x 12 months = £6,000.00 / 52 weeks (x 2 weeks as rent is to be paid fortnightly) = £230.77. Is this correct?

[Mrs Mug]

I notice that there is a difference between your rent calculation per fortnight (£230.14) and mine (£230.77) havensRus. I worked it out as £500 x 12 months = £6,000.00 / 52 weeks (x 2 weeks as rent is to be paid fortnightly) = £230.77. Is this correct?

I use £6000 / 365 days x 14 days = £230.14.

[MR M]

I use £6000 / 365 days x 14 days = £230.14.

Hmmmmm..........so who's right, me or thee :confused:

[jta]

Your tenant might be happier to pay 240 pounds a fortnight with a two week 'free' period at Christmas.

6000/50=120x2=240x25=6000.

[jeffrey]

The £500 is due per calendar month, but payment is in equal fortnightly installments. I'd have thought it should then read:

£500 (Five Hundred Pounds) per calendar month, payable by equal fortnightly payments of £230.14 in arrears, the first such payment of £230.14 to be paid on the fourteenth day after the date of this Agreement.
Yes- but why then say £500 (Five Hundred Pounds) per calendar month at all? Better to say: £6000 per year.

[havensRus]

I
I notice that there is a difference between your rent calculation per fortnight (£230.14) and mine (£230.77) havensRus. I worked it out as £500 x 12 months = £6,000.00 / 52 weeks (x 2 weeks as rent is to be paid fortnightly) = £230.77. Is this correct?

No. I also use the same calculation method as Mrs Mug. That is:
daily rate = (£500 x 12) / 365
fortnightly rate = 14 x daily rate
weekly rate = 7 x daily rate


Yes- but why then say £500 (Five Hundred Pounds) per calendar month at all? Better to say: £6000 per year.

jeffrey, same end result. a lot of tenants can identify with a price per month or week, rather than per year.

[jeffrey]

But per year basis is better, as it's always the only way to apportion.

[susanne]

""Is permission to discuss the Tenants claim just a letter which I would draft getting the Tenant to sign and sending to the Local Authority or something more formal ie a specific form from the LA?"

i have inserted a clause on page one of my tenancy agreement which says that the tenant agrees to allow the specific Local authority to discuss the tenants claim with the LL.

re how to word rental payments etc - i have several LHA tenants (some paid fortnightly in arrears, some monthly) and i leave the rent period as the standard single monthly payment.

This helps me produce an accrued arrears schedule very quickly - which may be useful one day down the line in the tenancy...... - especially when asking the council for direct payment

[Esio Trot]

Is permission to discuss theTenants claim just a letter which I would draft getting the Tenant to sign and sending to the Local Authority or something more formal ie a specific form from the LA?

I would suggest that you have the prospective tenant sign a separate document. This is easier to fax and to photocopy.

The first clause in this document is that it is irrevocable both during the tenancy, and after the tenant vacates on any matter to do with the tenancy. The other major clause is that the tenant gives permission for their claim to be discussed.