Newbie needs advice on HB for current reliable tenant who has lost job

[stolly]

I am new to this site & forum & not up to speed on the abbreviations so I apologise in advance.
I rent a property to a lovely couple who were both in work & had a baby in December. They have always paid the rent on time & have looked after the property. The man has now lost his job & his partners maternity pay does not cover the bills. He intends to find another job but for now he has asked if I would accept a HB claim. Their contract is just about to expire at the end of the month. I am not a seasoned landlord & have no experience of HB. I had thought about possibly saying yes on hte condition that the rent is paid in the normal way in advance incase of any delays- but then again what happens if he is not assessed as eligable???
I would value your advice on this matter

[Mrs Mug]

If your tenant has always been a good tenant, this is not going to change just because he has had the misfortune to lose his job. It could happen to the best of us.

If your tenant is entitled to housing benefit, HB, he should be if he is claiming Job Seekers Allowance, then HB is not paid in advance. Most Local Authorities, LA, pay it 4 weeks in arrears. If all the paper work is submitted correctly, it can still take up to 8 weeks for the tenant to receive the first HB payment.

The amount of HB that the tenant will get is called the Local Housing Allowance, LHA, It depends on the tenants circumstances and which LA pays it. The amount your tenant will get can be found here;
https://lha-direct.voa.gov.uk/Secure/LHARateSearch.aspx?SearchType=LA

When your tenant is filling out the HB form, ask him to allow you to talk to the LA to discuss the claim. Then you will be able to find out how the claim is progressing.

But you must check that your mortgage company and landlords insurance will allow you to have a tenant that is claiming HB.

I hope that helps.

[tom999]

I rent a property to a lovely couple who were both in work & had a baby in December. They have always paid the rent on time & have looked after the property. The man has now lost his job & his partners maternity pay does not cover the bills. He intends to find another job but for now he has asked if I would accept a HB claim. Their contract is just about to expire at the end of the month. I am not a seasoned landlord & have no experience of HB.

Without knowing the full circumstances, I don't believe that anyone can fully answer your question with a simple 'Yes' or 'No', as there are so many variables that are involved. A good tenant that has been paying rent may continue to be a 'model' tenant, but there is no guarantee of this, particularly when their previous income has been drastically reduced.

If you wish to proceed with the letting (based on your limited knowledge), it's essential that you learn as much as possible about the LHA system, e.g. get info./leaflets from your local authority, read the posts in this section of the forum, learn about the HB Regulations, join a national LL's association, meet local HB LL's (the local authority may have a meeting/forum or there may be a local LL's association). Ensure that the tenant; has a UK based working guarantor who is a homeowner, and; can pay a sizeable deposit.

Personally, I would not recommend letting to HB/LHA tenants to a new/inexperienced LL, as the current LHA system is heavily weighted against the LL; if the tenancy takes a turn for the worse, the local authority are unlikely to help the LL, but will almost certainly help the tenant, as it's their LHA claim.


I had thought about possibly saying yes on hte condition that the rent is paid in the normal way in advance incase of any delays- but then again what happens if he is not assessed as eligable???
As mentioned above, the local authority will typically pay the housing benefit (LHA) to the tenant in 'arrears'. 'If' the tenant's LHA application is approved, then the tenant will not usually receive an instant payment, but the local authority should make an interim payment within 14 days.

If you are used to receiving rent paid in advance, and your current tenancy agreement states this, then it's likely the tenant's will fall into arrears, unless the tenant's can top up the rent, i.e. pay the difference beween the LHA received and the rent due.

[pinkwallpaper]

I have had two long term tenants (in different properties) lose their jobs and go onto housing benefit for short periods of time and they both then got jobs and stayed for some time as excellent tenants. If you ask your Ts to leave you are bound to be without a T for a few weeks and will also no doubt have to pay an agent to find you someone else who may not be as good. Yes you may have to wait for a few weeks for your money but surely that is better than the house being empty altogether. I did inform my insurance company as my buildings insurance states property being let to professional people, they had no problem with the short term change.
Yes we are in the business to make money but that doesn't make us heartless!

[hbadvocacy]

Follow the advice you've been given by the various posters by firstly giving your good tenants a chance of remaining in their home.

It's unlikely that the couple's entitlement to Maternity Allowance and Job Seeker's Allowance will be sufficient to meet their requirements. I would suggest they also pursue a claim for JSA (Income Based) which is basically the means tested version of JSA, and very similar to Income Support. At the same time, don't delay claiming LHA as it could lead to a gap in entitlement which you and the tenants will want to avoid.

If they qualify for JSA (IB) then they should qualify for the appropriate LHA rate which is based on the number of bedrooms they, as a family, require. If their income is higher than their JSA (IB) requirements any entitlemnt to LHA will be reduced by whatever the excess is X 65%. For example, if their excess income is £10 they will have £6.50pw docked off their LHA rate.


Ask them to sign a mandate authorising you to act on their behalf in relation to the LHA claim and also write to the Head of Benefits & Revenues requesting the first payment of LHA should be made payable to you as LL.

HBadvocacy
www.hbadvice.co.uk.

[Emma1973]

In my opinion he would be very unlikely to get JSA Income Based, it would be JSA Contributions Based which does not automatically qualify a person for LHA. That doesnt mean to say they wont get any though!

For JSA IB they would also look at his wifes income and even the lowest Maternity Allowance is more than what the Government says a couple need to live on. There are many benefit calculators on the web and probably one on his Councils home page where he can check what they are entitled to.

I hope he's told the Child Tax Credit people as well as they may well be forthcoming with some extra money!

[hbadvocacy]

The truth is none of us really know for definite because there's insufficient detail to assess eligibility to either HB/CTB or JSA (IB). However, in my experience it's better to claim than not and maybe miss out.

JSA (contribution based) is, as you say the more likely of the two to be paid but it's not guaranteed unless you've paid contributions, and in the relevant year. If it's paid it will be either £64.30 or £50.95pw if he's under 25. Maternity Allowance is currently paid at £123.06. As child benefit is now ignored as income for HB/CTB purposes the family should qualify for full or almost full benefit even if their income is slightly above the JSA (IB) rates.

HBadvocacy
www.hbadvice.co.uk.