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bob
15-05-2005, 14:23 PM
I have found a tenant which i would like to take on,only problem is they are dss and the lender doesnt allow this.Can i get around this somehow,or would it be better to avoid it?

davidjohnbutton
15-05-2005, 15:20 PM
Take them on as non-dss tenants - once they were in they applied for DSS didn't they?

bob
15-05-2005, 15:44 PM
But what about the insurance,wouldnt that become void?,and if the lender found out what could they do?

Ericthelobster
15-05-2005, 16:00 PM
Take them on as non-dss tenants - once they were in they applied for DSS didn't they?What difference does it make whether they became DSS after they moved in? Surely to avoid the insurance becoming void, they would have to be evicted, harsh as that sounds.

The best solution would be to talk to the insurers, and if they can't help (likely; although maybe they do a more expensive policy that permits DSS?) then if the OP definitely wants these tenants, he'll have to cancel the current policy and take out a new one.

IMHO it's not worth mucking about with this; if the tenants manage to burn the place down, you can bet your life that the insurance co will investigate at length and do anything they can to avoid paying out, and a sniff of something slightly untoward (like DJB's strategy above) is all they need!

bob
15-05-2005, 16:11 PM
but even if i had a valid insurance for dss,wouldnt it cause a problem that the lender doesnt allow it?

MrWoof
15-05-2005, 16:24 PM
Have you checked with the lender about the DSS problem? The only requirement my lenders have is that the rent is at least 130% of the mortgage. It seems very strange because what would happen if the tenant really was initially working and then lost their job, what about someone about to retire? Would you be expected to throw them out? Bear in mind that your contract is with the tenant, they are responsible for the whole rent. Also, the DSS do not help towards housing, this is for the local authority and is Housing Benefit which is either paid to the tenant or direct to you on the tenant's behalf, either way, the tenant is responsible for the rent whether they receive enough money from work or HB.

bob
15-05-2005, 16:34 PM
The lender stipulates no dss,but i think the tenant is claiming housing benefit is this the same as dss?. I havent actually bought the property yet,but have already made the mortgage application and have said that it wont be occupied by dss,but this tenant would be good as i know them.

MrWoof
15-05-2005, 19:06 PM
As far as I am aware, HB is not DSS, not sure what a DSS tenant is:confused: . I note that you are buying a place with a sitting tenant:eek: , have you made absolutely sure that it is an AST, stipluate to your solicitor that only an AST between you and the tenant is acceptable. Doesn't matter how well you know the tenant, I got started in the letting business because a 'friend' who was renting a place from me prior to buying it, walked out and left me almost broke, I had to let it out as I couldn't afford to wait while it sold. Never looked back though.:D

Paul_f
15-05-2005, 19:12 PM
If your lender states that you must not let the property to persons on housing benefit then stick to it! I'm surprised David Button has suggested you try and circumvent this by what can only be described as deception; insurers are not known for their generosity towards such people. It will be a breach of your mortgage too, and will possibly void some aspects of your home insurance should you choose this route.

Yes! DSS (Dept. of Social Security - a government dept.) and HB (Housing Benefit - a local authority dept.) claimants are one of the same for this purpose. It means they won't/don't/can't work and have insufficient means of support otherwise. It just means that they also might claim other benefits from the DSS for which they are entitled except those concerning housing, and these are dealt with by the housing dept. of the local authority.

Energise
15-05-2005, 20:00 PM
I think you should read that clause more carefully because there is no 'Department of Social Security' anymore. If there is a clause excluding all claiments of what was the DSS it seems an extremely broad exclusion, it would for example exclude a fully employed person claiming disability benefit, that I would suspect could fall foul of the 'Disability Discrimination Act'

Paul_f
15-05-2005, 20:27 PM
Yes Energise I take your point. I was just indicating the common interpretation of what everyone seems to understand as it's meaning. I realise the dept. has since been absorbed.

A fully employed person claiming disability benefit would not be entitled to housing benefit in the same way as the unemployed, and it would not be a breach of the DDA or the mortgage if the mortgagor restricted the tenancy that imposes a condition on the landlord not to allow persons who are not in gainful full-time employment at the outset.

Energise
15-05-2005, 20:53 PM
Hi Paul f I wasnt trying to be pedantic (sorry if it appeared that way) but was questioning the validity of the clause in this instance. If the clause specifically says "DSS" then the proposed tenant would not be excluded as he is not claiming "DSS".