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View Full Version : Tenant's overpaid rent but refuses to leave



Snowbed
19-06-2005, 14:47 PM
I have already posted my scenario/dilema on here a couple of weeks ago. But in a nut-shell: problem tenant who owed me 5 months rent, housing benefit was claimed and this was back dated to the date they moved in to the property. Thus, not only am i now paid upto date, but i have 7 months housing benefit to retun to the tenant. I am also now getting the monthly rent paid direct to me via the HB.

After the replies from members of this forum i have now decided that i want this tenant to move out. The tenant knows about this overpayment and understandably wants it back. I have told him i want him to move out and we agreed that i would give him half the rebate (about £1350) this weekend and the other half when he moved out. When i went round to give him the first payment he said he had sought legal advice and wasn't going to accept any money. He is saying this is his money and i have no right to withhold payment to him. I can't understand 'where he is coming from' on this and why he suddenly got a solicitor involved (if he has). It seems to me that we are now both in a worse situation than before. He, because he has none of the rebate at present and me because it looks like i will have to get a section 21 notice to evict him.

Any suggestions on the way forward from here? Is talking to him the best option to make him 'see sense' or is it straight to a solicitor to get a section 21 issued?

Am I entitled to withold this money as an 'extra bond'? Will the fact that i am holding this money have any effect on my ability to evict him?

For information: The tenancy agreement expired 6 months ago and has not been renewed. I am not worried about the HB being reclaimed from me by the borough council (in case it is a fraudulent claim) as i have already spoke to the Housing Benefit Officer and they have assured me they won't.

Sorry, one last point. Only one person signed the original tenancy agreement, but since then he has moved his mum and dad in (both pensioners) and sister. Will this have any effect on having them evicted? :confused:

Andy Parker
19-06-2005, 16:00 PM
You should issue the section 21 immediately.You can do this yourself the wordings are readily available.The extra 'tenants' make no difference they will be treated as guests of the tenant and will be evicted at the same time.I don't understand the overpayment bit.Have you been paid by both the council and the tenant for the same period or simply overpaid by the council?

Snowbed
19-06-2005, 17:30 PM
Thanks Andy.

Yes, I was paid by the tenant from June 04 to Dec 04. He then stopped paying me. He applied for HB and this was back dated to June 04.

Am i right in thinking that this is now a 'periodic tenancy' and thus effects the section 21 notice i issue?

In yours/anybody elses opinion is it better to get a solicitor to do this for you or is it relatively easy for a novice like myself to do.

I don't think i can but could i deduct any expense of evicting the tenant from the monies i hold?

Andy Parker
19-06-2005, 17:58 PM
The tenancy is periodic so correct notice is section 21 4a.If you research this site you will get enough information to serve the notice yourself (including a copy of notice required).It is really up to you if you would rather use a solicitor.You shouldn't deduct your costs from the money you hold which belongs to the tenant (although I would be tempted to hang on to it whilst the tenant is still in your property).Good luck.

Snowbed
19-06-2005, 19:58 PM
Thanks again Andy :)

zoe
20-06-2005, 12:34 PM
snowbed

Some thoughts.

1) why are you keeping this money when it is not yours ? It should be returned imedietly.
2) I think most councils will not pay HB for a period where the tenant has alreayd paid, this is beceause they would deem that if the tenant could find the money that they should. thus it is very likely that the tenant is commiting fraud. Also in order to get full HB you have to be on a very very low income and it would be unlikely that the tenant would be entitled if they could afford to pay it themselves.

Zoe

zoe
20-06-2005, 12:37 PM
snowbed

Sorry for replying again, but after reading your post it ius absolutely clear to me that you should not be holding on to your tenants money. I should return it now or risk him taking you to court.

Zoe

Andy Parker
20-06-2005, 13:08 PM
Zoe - I have complained about unhelpful advice on a separate thread.Your last two posts definitely qualify.There is no reason to suppose the HB paid is not due and the extra money will come in handy when the tenant pleads poverty over paying the legal costs incurred in evicting him.This money might have to be relinquished if the tenant makes a lot of fuss but what is the point of voluntarily returning it 'immediately'!?

Snowbed
20-06-2005, 15:03 PM
Zoe, I appreciate your reply (as i do all people who take the time to offer their help and opinions).

I agree that this is not my money and i have no intention of keeping it 'long term'. However, as things stand at present it gives me a bit of security. For a long time he had me in a position where he 'held all the cards'(I'm sure alot of landlords have experienced this and know exactly what I am talking about and how I feel).

I have already offered to give him half the money and the other half when he moves out. Why is this not acceptable to him? I can only assume he is wanting to be evicted so he can get a council house. If I am to give him back this money i am relinquishing the only bargaining tool I have.

If he wants to take me to court for this money then he can,(i don't know where i stand legally on this but i don't care). Its now costing me time and money to get him evicted, this is on top of all the stress and worry he caused initially by not paying for 5 months (Jan to May). My wife gave birth to our daughter in March and this was a cause of great worry for us both, at a time where financially we couldn't afford to be paying two mortgages.

Sorry, got a bit carried away there. :mad:

Please let me make this clear, i am not trying to 'rip this guy off'. He will get his money, but i have to protect myself financially.

zoe
20-06-2005, 15:17 PM
Snowbed

I say that the money is not due as I KNOW that if the tenant has paid the rent in advance that the council will not pay it. If you think this warning is unhelpull then so be it.

Also I feel very strongly that the money should be returned to the tenant ASAP. You are not his bank manager and do not have to allocate him his money when you feel like it. he does not have to accept half now and half later he should have it now, which is what his solicitor has probably told him.

The warning about the money being not due to him, is just that a warning, if the council decide that they want the money back they may well claim it from you.

good luck, and congrats to you on teh baby front. I have my 14 week baby, on my lap feeding as we speak !!!

Zoe

zoe
20-06-2005, 15:20 PM
Andy Parker

My post were not unhelpfull. the money should be returned as otherwise the LL is acting outside the law. Also, like I say if the tenant had enough money to pay the rent up front then I suspect fraud, in either case if the HB know he has this money they will want it back as they will only help tenants pay rent they cannot afford.

Zoe

Snowbed
20-06-2005, 15:56 PM
Congrats to u 2 Zoe :)

I have taken on board what you have said, but that doesn't mean too say i agree with what you are saying or that i am going to act accordingly. But again i thank you for your response, this is a forum after all and everybody is entitled to their say.

If it starts getting too troublesome, he can have the money back, but i will continue to keep hold of it for as long as possible whilst the eviction proceedure runs its course.

Rightly or wrongly this is what i am going to do. I think most people in my position would do the same.

Regards Snowbed

Tax Accountant
20-06-2005, 17:06 PM
I suppose I can have my say now for what it is worth.

Thinking about it logically, if there is any overpayment, and there does not appear to be any doubt about it, the overpayment has resulted from the payment of HB to you for the same period for which the tenant had already paid rent to you.

Therefore, if any money is to be returned, it needs to be returned to the HB people and definitely not to the tenant. If you refund any money to the tenant, you will risk a double whammy because the HB people may come back to you later and ask for refund of the overpayment from you. If this happens, you will have no legs to stand on because you cannot argue that you were not aware that HB was paid to you for the period for which there was no rent outstanding. :(

DO NOT REFUND ANY MONEY TO THE TENANT UNDER ANY CIRCUMSTANCES.

If the tenant makes too much noise, tell him that the money will be returned to the HB office and you will also fully acquaint them as well as the local housing officer of ALL the facts. Make him understand that it would be best for him to leave voluntarily and quitely unless he wants to make life difficult for himself.

Properly advised, I would say that you should refund the money to HB office. However, you may be tempted to hang on to it as your insurance for the time when the HB Office come knocking on your door.

Ramnik

Snowbed
20-06-2005, 18:44 PM
Thanks Ramnik. Although yet again i find myself confused :confused:

The housing benefit know that the cheque they issued(for 12 months) included a 7 month period where the tenant had already paid me. The lady at the benefits office actually told me via a telephone conversation that I should take out any arrears owed to me and pay the rest back to the tenant. People on this forum now seem to be saying that this is not the standard proceedure for housing benefit! Previous to receiving the HB cheque, I had to write to the benefits office detailing how much the tenant was in arrears, when he moved in and on what date each month the rent is due. Again the housing benefit office contacted me via telephone and requested this information, saying that they could not process the tenants claim until they had this info.

Although I am satisfied the HB officer will not request any payment from me for either a mistaken overpayment and/or fraudulent claim;I would feel much better holding onto the money rather than giving it to the tenant just in case they do want any of the HB back.

Like I have said previously, the reason I am so confident that they will not request any monies from me (even though it was paid direct to me) is that I have spoke in person to the Housing Benefits officer who said they wouldn't. They said they would only do this if they had reason to believe that the landlord knew it was a fraudulent claim and was with holding this information from them. At this point I expressed my concern that it could be fraudulent as I knew that 4 people were living in the property, one of which was working for the whole duration of the 12 months. She was very interested in this and also the fact that the name the claim was made under was not the person who had signed the original tenancy agreement(the son), but instead the father(pensioner).

They said they would look into the validity of the claim and write to me to let me know that the benefit had been cancelled (if it was found to be fraudulent). At present i have neither heard anything or recieved the first monthly housing benefit cheque (not due until last day of month) and as such I am in 'limbo' at the moment. In my situation, would you (sorry this is aimed at you Zoe) hand over to the tenant the overpayment knowing that either

a.) the claim is fraudulent and so the HB will want it back(although it isn't my problem as they would go after the tenant).

b.) A fraudulent claim will result in me getting no future rent (3/4 months?) whilst I evict them.

If it does turn out to be fraudulent then I can use the balance I am holding to cover any future rent payments until eviction.

Sorry if this is a little long winded

Snowbed
20-06-2005, 18:46 PM
One more thing:

I'm going to see a solicitor tomorrow, so i'll let you know what he says.

zoe
20-06-2005, 19:37 PM
know wonder you are confussed.

Basically if the claim for HB was not fraudulent the money is the tenants, if it is fradulent it is the HB's (recoverable as you say from the tenant).

Either way the money is not yours. You cannot legally hold it to protect against future payments. I know you may think that this is the correct thing for you to do to protect yourself but in the eyes of the law it is not. See your solicitor and see what they say.

Zoe

Tax Accountant
20-06-2005, 19:45 PM
I am putting myself on the line here and say to you that there is nothing further that a solicitor would add to what has already been said here. Perhaps he could explain to you the long-winded procedure that you would need to go through to evict the tenant while the rent arrears and legal expenses continue to mount, not to mention the stress it causes you.

I repeat - if there is any overpayment, it is by the HB and not the tenant. Hold on to all the money in case of the worst scenario and to use it to cover the expected underpayments for rent and to cover the damage to the property you will find when you repossess it. Just as you have to go through the court for what is yours, let the tenant go through the court if he thinks the rent has been overpaid by him. Don't be intimidated.

The tenant is sitting put because he has possession of your property. Similarly, you will stay put with the overpayment because you have possession of it. There is such a thing as counter-claims and eventual set-offs. As they say, possession is nine-tenths of the law. Don't let anyone make you part with the money in your hands until you have your property in your hands in the condition you should expect to find it.

Ramnik

zoe
20-06-2005, 20:07 PM
korongo

The LL cannot use the money in this respect, it is not his money and it is theft. A solicitor will advice the same.

Zoe

Snowbed
20-06-2005, 20:27 PM
I know a solicitor will cost - but i'm using one to do the eviction for me (not confident of doing it on my own) I'll see what he has to say regarding the situation as a whole.

I still think my original suggestion to him of half the money now and half when he moves out would be the best for both parties. By not accepting this we are both going to lose. Oh well.

Keep up the good work, whether i agree or disagree with your suggestions. i'd rather have them than not at all.

I'm off now to bury my head in the sand.

See you in a few months for an update ;)

Jennifer_M
20-06-2005, 21:14 PM
I don't know about the legality of things in this matter but may I suggest you contact the council and ask them what they advise you to do ?

If the council is investigating a possible case of fraud, they will probably come to you to ask for the money back if need be. I don't know what would happen if you have given it to the tenant; maybe they'll go to the tenant or maybe they'll want it from you which would put you in a difficult situation.

So it seems they are in the best position to advise you (they should know if they're likely to ask you for money back).

Keeping the money if you're not entitled to it and/or using it to "blackmail" (sorry if the word is a bit strong) the tenant into moving out, isn't right.
But I do understand you are simply trying to protect your own interests.

Good luck anyway.

Tax Accountant
20-06-2005, 22:10 PM
Zoe states: 'The LL cannot use the money in this respect, it is not his money and it is theft. A solicitor will advice the same.'

Since when has an overpayment been defined as theft, especially as all the parties (apparently) know the position ? And if it is theft, this is in respect of the council's HB money and not tenant's payment of rent.

the overpayment has been by the council and not the tenant. Snowbed will refund any monies to the tenant at her peril.

Jennifer states: 'Keeping the money if you're not entitled to it and/or using it to "blackmail" (sorry if the word is a bit strong) the tenant into moving out, isn't right.'

So is it right that the tenant doesn't pay rent and doesn't move out either?

I know that two wrongs do not make it right, but like Jenifer admits, Snowbed has to look after herself. If she doesn't, it is only she who will lose out.

Ramnik

Jennifer_M
21-06-2005, 08:36 AM
So is it right that the tenant doesn't pay rent and doesn't move out either?


You've answered your own question. Although protecting your own interests is the natural thing to do, it might not be the legal thing to do. Protecting your interests would also mean that you do not put yourself in a situation that would enable the tenant to sue you maybe for blackmail.

Example: You're in your home and a burglar enters a room upstairs. You grab your golf club, go upstairs, the burglar jumps towards you, you swing the club and hit him in the head and he dies.
Although you were defending your home and family, you might well end up in court. I know a judge would usually understand the situation etc., but that guy who killed that 16 year old ended up in jail.

The example is a little far fetched but you understand what I mean.
Again I think the council are the ones best to give advice in this case.

Tax Accountant
21-06-2005, 09:45 AM
Hi Jennifer,

I think we are running away with our imagination when we talk about theft (Zoe) and killing (Jennifer).

We have a culture where the interests of the offender is given far more importance than the interests of the victim. The offenders don't give a hoot to law and blatantly flout it. The very people who live in fear of the law almost always lose out because they are easy prey and in full sight.

For once, the landlord has an upper hand because she is holding more money in her hands as cover against continuing breaches of the tenancy agreement and she should not weaken her position. She has not done anything wrong. On the contrary, she has pointed out to the other party that she has received more money than what was due. She has gone one step further and offered to pay some back now and the rest when the tenant vacates the property but the tenant is not playing ball.

Jennifer, I agree that the council is the best people to sort it out. However, I also strongly believe that the overpayment is by the Council and not the tenant and that is why she should not refund any monies to him. You yourself accepted that doing so may put her in a difficult situation if the council then claims the overpayment from her.

I believe that Snowbed should should issue notice to quit and then see how things unravel. If the tenant takes her to court, Snowbed could easily counter claim for rent arrears and damage to the property that will undoubtedly be due to her by that time. In any case the situation regarding who the overpayment belongs to would also have been most probably unraveled by then.

Good luck to her.

Ramnik

lucid
21-06-2005, 12:56 PM
Just a point of note: it may not be entirely relevent to this case because of the multiple occupancy scenario and the HB claimant not being the official tenant. BUT just because the tenant has already paid rent would NOT preclude that a council would not pay benefit. Disregarding fraud:

What if the claim process was complicated and took a long time to process or papers lost...this happens frequently. The tenant may have borrowed money in the meantime to pay the rent. Or may have used his/her own money. Assuming a genuine claim, this is only affected by savings over a certain amount, several thousand pouinds. So if the tenant were to dip into his below limit savings to pay the rent until the claim were processed and paid what is wrong there. Surely better than falling into arrears.

In additiion there are several reasons why a claim can be made late and backdated, even if the rent has already been paid.. for example illness or if incorrect advice has been given.

The point being you cannot automatically assume impropriety just because a claim is backdated and the rent has already been paid.

Jennifer_M
21-06-2005, 13:00 PM
Karongo,

The killing example was just that: an example.

I never said Snowbed should give the money to the tenant ! I said he should call the council and ask them what he has to do:

- if there is overpayment due to fraud: send the money to the council and evict tenant as normal
- if overpayment due to fraud but the council says pay to the tenant (don't se why they'd tell you to do that) then get it in writing so the council cannot chase you afterwards
- if the council says there was no fraud then there's only the issue of backpayments in the LL's possession and it is effectively the tenant's money.

There is 7 months worth of rent that the LL has already received so the extra money the council gave the LL isn't entitled to and it should be given to the tenant.
I'm not sure but maybe a lawyer could find a case for illegal eviction if a LL blackmails a tenant into moving out by holding the tenant's money (which could put the tenant in financial difficulties etc.).

Again, I say ask the council.