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Jax
16-07-2005, 12:34 PM
Hi Everyone, I have just joined the forum and would appreciate advice if anyone can help on the following issues:

TENANT

I have a prospective tenant for my 2 bed maisonette. Single mum with 15 month old child. She came with parents, looked round, went away and came back to agree to the property that day.

She says she split with partner, another part of UK. Living with parents so no utility bills, her passport is "lost in the post" and she is baulking at paying 1 month rent in advance and is asking if I will pay it back when her Housing benefit comes through although security deposit available and happy to pay that.

I am nervous about lack of id. If i do tenants checks I feel they would come back with nothing useful as she lived with a partner, no utility bills there, hasnt worked etc.

Should I be nervous? and I should ask for 1 month plus deposit, shouldn't I?

I know that I have to give deposit back depending on dilapidations but do I have to give back anything else? Doesnt it depend on whether she stays to the correct end of tenancy etc? or if absconds etc.

TENANCY AGREEMENT

I need 1 for her and 1 for me. Where is the best place to get one? I purchased 1 from OYEZ but I am not sure if they are standard?

I want to include a break clause in a 12 month contract, how do I word this or should I just go for a 6 month initially to see how it goes.

I see in other posts people suggest using an agent for first 6 months..

What am I paying for, can I get them just to draw up the contract or should they collect rent as well. The prospective tenant wants to pay directly to my bank account and set up a standing order from mother for the other amounds over the HB. About a tenner a week into my account as she has no bank account.

If anyone has experience of this area I would be most grateful.

Jax :confused:

MrShed
16-07-2005, 13:14 PM
I wouldnt personally be TOO nervous about lack of ID, but I would be very concerned that she cannot pay a month up front, I would not be taking this particular tenant on!

MrWoof
16-07-2005, 16:56 PM
I have a mixture of HB and full paying tenants. Don't worry about her being unable to pay a month in advance, if you were on benefits, could you find that and a deposit? Get a pre-tenancy determination from the local HB office, if that is less that the rent, ask her for a top up payment, this is payable in advance, if she can't make this then leave her alone. Lack of ID could be a problem, passport 'lost in the post' why was it in the post? I know Royal Mail is increasingly unreliable but I've heard this one much too often. She must have some form of ID for her benefits, get her NI number, better still, download a tenancy application form from this site and use that.
The OYEZ tenancy agreement should be OK, I used a Lawpack one but don't give her a 12 month agreement, make it 6 months, it goes periodic after this anyway. The deposit can be used to cover damages (not normal wear and tear) and unpaid rent.


I see in other posts people suggest using an agent for first 6 months..

What am I paying for, can I get them just to draw up the contract or should they collect rent as well. The prospective tenant wants to pay directly to my bank account and set up a standing order from mother for the other amounds over the HB. About a tenner a week into my account as she has no bank account.Jax :confused:You are paying for the agent's experience, get an agent registered with a professional body and it's money well spent, go for full management at first.
It doesn't matter who pays the money as long as your agreement is with your tenant, make sure she realises that she is responsible for the whole rent even if HB pay most of it. Also, make sure that HB is paid directly to you (or your agent), not to the tenant.

bornlivelife
17-07-2005, 07:28 AM
I would take tenant on unless sure shes not lieing about lack of anything. If its genuine then maybe ok, but if shes lieing about it, what else is she hiding and do you want a lieing tenant - its a partenership having rental property and you need to trust each other. On list of best to worst tenants this doesnt sound too high up the list to me...

Jax
20-07-2005, 20:03 PM
Thank you for your comments, the lady in question has now agreed to pay rent and bond in advance, off her own bat as she really would like to secure the property.

My further question is this, as she will be paying in advance, does she get the months rent back, assuming she fulfills the contract. She is sure that because the council are paying they will pay until her last day in the property and I will be covered

I appreciate that the bond will be for dilapidations etc and this will go back.

I seem to have a real problem getting my head around advance and arrears.

Does anyone else have this problem

zoe
20-07-2005, 20:08 PM
it is normal for tenants to pay rent in advance. She pays for the month and then stays for the month.

You should forget the fact that HB are paying and just ask her to pay from her account, in advance, in the normal way. She will receive the HB on a four weekly basis but you do not need to worry about this.

Keep it simple.

MrWoof
20-07-2005, 20:29 PM
My further question is this, as she will be paying in advance, does she get the months rent back, assuming she fulfills the contract. She is sure that because the council are paying they will pay until her last day in the property and I will be covered

I appreciate that the bond will be for dilapidations etc and this will go back.

I seem to have a real problem getting my head around advance and arrears.

Does anyone else have this problemDon't confuse 'bond' with 'months rent'. You may have charged a deposit equal to one month's rent but the two are entirely different. The deposit is kept separately and you may not touch it until the end of the tenancy when it must be handed back less any amount kept for dilapidations. As for advance and arrears, the tenant pays in advance, for example, for the month 20th July to 19th August, rent is due on the 20th July. HB can be paid directly to you or to the tenant, either way, the tenant is responsible for the whole rent and as HB is paid four weekly in arrears and in my area at least, takes 10 weeks to be settled, I find it best to ask the tenant for a top up and have the HB paid directly to me. Also, HB is not paid up to the last day, it is paid to the last Saturday the property is occupied, if she leaves on a Friday, HB won't pay that week, its down to the tenant.

Jax
20-07-2005, 22:19 PM
Thank you all.

I do understand bond and rent are different, and treated as seperate entities.

I am sorry but still slightly consfused so let me explain hopefully more clearly.

The tenant wants to move in on first monday of september the 5th I think for an agreed period of 6 months

She will pay 1 month in advance, now what she is saying to me is that because she is paying 1 month in advance, and then HB will kick in and be backdated to 5 September, I will have had 2 months rent for september.

and she is to have it back at the end.

Is this correct?

I have no desire to withold anything from her, however, dont want to do meself out of cash either.

I thought as Zoe pointed out you pay for the month you are staying in advance but it does look like I will get 2 payments for september.....

mjpl
21-07-2005, 08:10 AM
Has anyone broached the subject of the above concerns you face while dealing with benefit tenants?

I would always council an element of caution when dealing with a tenant in receipt of benefits. There are complications with the id side of things.

1) Clawback - This has nto gone away. You may be in a luck council area who will guarantee against it but they are few and far between. In simple terms if the council find out that your tenant was not entitled to benefits for any reason (ie. part time work) they will sue the recipient of rent for all the money back. There is no time limit for this. If the rent is paid directly to you it is you who will be repaying it.

2) Repossession - Nearly all local authorities are only obliged to suppply housing immediately for someone who has been evicted. If a benefit tenant moves out in accordance with a section 21 notice, this constitues voluntary homelessness thus absolving the council of the need to supply alternative housing. In my company 95% of all benefit tenants have to be evicted through the courts.

3) id - if the person is not who she says she is you tenancy agreement will be invalid. Equally by accepting rent a periodic tenancy will be created. How will you recover possession if you do not know who is in your property?

Sorry if this has all been discussed already

zoe
21-07-2005, 12:15 PM
Jax


Keep it simple. Have the HB paid to your tenant and then have the tenant pay you. This way you will not receive double payments ect.

Just keep the HB issue seperate from the rent.

As others have said there are other advantaged of not having the rent paid directly to you and I would strongly advise against this.

Zoe

mjpl
21-07-2005, 13:14 PM
I agree. I will post a little more slowly this time to avoid spelling mistakes.

If the tenant states that she will be receiving a back payment, then this payment can refund her the amount she has already paid you.

MrWoof
21-07-2005, 16:11 PM
Jax, the best way to handle this is to calculate the total rent due over 6 month term, when you get the HB figure (a weekly amount), calculate that over 6 months, subtract one from the other and you have the amount due from the tenant. Subtract what she has already paid and divide the remainder by the outstanding period of the tenancy. That gives you her remaining monthly top up.


Has anyone broached the subject of the above concerns you face while dealing with benefit tenants?

I would always council an element of caution when dealing with a tenant in receipt of benefits. There are complications with the id side of things.

1) Clawback - This has nto gone away. You may be in a luck council area who will guarantee against it but they are few and far between. In simple terms if the council find out that your tenant was not entitled to benefits for any reason (ie. part time work) they will sue the recipient of rent for all the money back. There is no time limit for this. If the rent is paid directly to you it is you who will be repaying it.

2) Repossession - Nearly all local authorities are only obliged to suppply housing immediately for someone who has been evicted. If a benefit tenant moves out in accordance with a section 21 notice, this constitues voluntary homelessness thus absolving the council of the need to supply alternative housing. In my company 95% of all benefit tenants have to be evicted through the courts.
To the best of my knowledge, clawback is a thing of the past. My local HB office assure me that it is now law that any overpaid HB is claimed back from the claimant, not the LL regardless of who receives the HB (unless the LL had knowledge of a false claim). Second point, the situation is just the opposite, a section 21 notice is a repossession notice, there need not be any fault on the tenant's behalf and is definitely NOT voluntary homelessness! As I found out recently, even non payment of top up or rent is not considered intentionally homeless if the tenant is receiving HB.

mjpl
21-07-2005, 16:32 PM
As mentioned in my previous post this is a council orientated problem. There are some that operate in a fair manner but others do not.

I am presently going through the courts on no less than 7 accelerated possession orders with two councils that certainly do not accept a s.21 notice. A s.21 notice is a notice of possession and not eviction. Under the Protection of Eviction Act 1977 it is made very clear that only the courts may evict a tenant. Most councils are fully aware of this.

Equally I suggest you speak to your own council's regarding clawback. At least one of the council areas we operate in unashamedly prefers agents to receive rental as they are the easy target for clawback.

You have been warned

mjpl
21-07-2005, 16:53 PM
This excerpt was taken from the office of the Deputy Prime Minister today:

Clawbacks

The previous section reported that in both the survey and in the qualitative interviews clawback was mentioned by some landlords as a disadvantage of direct payment of HB.In this context, landlords felt that Housing Benefit claimants had failed to meet their obligation to give notice to the landlord before leaving the property, but the system in effect 'penalises' not the tenants, but the landlords: it is the landlord who must pay back the rent received after the tenant left the property, despite the fact that they were not informed the tenant had left.

A range of other situations in which 'clawbacks' had also been experienced by landlords emerged from the second qualitative study, and landlords tended to find clawbacks a matter of concern. Experiences of clawbacks included: tenants moving in and out of work (thus changing their entitlement to Housing Benefit); tenants making fraudulent claims; Housing Benefit being disallowed because of the death of a tenant (though the property had not been cleared); and tenants (erroneously) being deemed to have left the property (one was actually on holiday while another was temporarily in a nursing home). While accepting the principle that overpayments must be recouped by the local authority, landlords tended to feel that the clawback system is expedient rather than fair as it is easier for local authorities to recoup money from the landlord than from the tenant, even in circumstances where the landlord was not at fault.


Clawback is alive and kicking.

MrWoof
21-07-2005, 18:05 PM
The info about clawback is interesting, all I can say is that it has not yet affected me but when I spoke to my local council, they assured me that they had stopped doing it as a result of a change in the law. I'll check again. Regarding the S21 though, certainly, councils won't house on a section 21 notice, they require at least a court order and in my area, a bailiffs date as well but it is not regarded as intentionally homeless, how can it be? I recently went through the procedure, the council asked me why I served notice and I sent in the rent records, that's when they told me that non payment of rent is not considered to be intentionally homeless with a tenant in receipt of HB. The reason they gave was that benefits are to be used for food and clothing. I put the point that a roof over your head is nice as well but they replied that it was a national government edict, not local, also that local councils were suffering as well.

MrWoof
22-07-2005, 07:33 AM
MJPL, I've just re read your post, I see what you are saying now, if the tenant leaves just on the s21 then they are indeed intentinally homeless, tough on LLs with a problem tenant but fair to the majority.

mjpl
22-07-2005, 07:43 AM
Sorry, I meant to resond last night. Yes, that is what I meant. It is also unfair on the good benefit tenant who wants to leave in accordance with the Landlord wishes but cannot due to authority bureacracy. Of course it is the tenant who takes the blame.