HB tenant in arrears with former landlord

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    HB tenant in arrears with former landlord

    Hi all,

    We bought a tenanted (HB) property at auction and on the day of completion the sellers solicitors sent us a statement of over £3k of rent arrears which we paid. We now talked to housing benefits but obvs they don't want to discuss the payments that were made directly to the previous landlord because of data protection but they looked at a few payments they made that weren’t captured on the statement we had from the seller. So now we don’t know if the statement was fabricated or we are dealing with a bad tenant. The tenant is a single mum who doesn’t speak English at all but from my understanding the landlord was always paid directly by the HB.



    Now the flat is in a very poor state and if we are to evict the tenant we will have to refurbish it but have no funds. The council said that we need to make a new tenancy agreement with the tenant in order to get the rent paid. Any advise please?

    #2
    the sellers solicitors sent us a statement of over £3k of rent arrears which we paid.
    Why on earth did you do that?

    It was not your debt.
    In fact it had nothing to do with you at all, it was a matter between the tenant and the ex-LL/agent.

    Unless of course you had agreed to buy the debt along with the property.
    (But again why would you do that? Did you read the legal pack carefully before buying at auction?).

    They may well have been getting direct HB payments, but if the rent was higher than the LHA rate then there can still be outstanding arrears if the tenant didn't top-up the difference.

    I don't think that you actually need a new tenancy agreement, just a letter informing the tenant that you are now their landlord and giving your contact details. (I stand to be corrected there).
    There again a new tenancy agreement would make everything clearer.

    Something else to think of:
    Do you know what has happened to any deposit that the tenant may have paid to the ex-LL?
    Have you agreed to take responsibility for that as well?
    If there was one then where is it now? Has it been passed to you, or returned to the tenant?

    I'm sure others will be along pointing out more stuff you have probably missed/not considered.

    Comment


      #3
      Indeed:

      Have you served notice(s) on tenant (copy to council if you like) compliant with s3 & s48?? If not, no rent due, possible criminal offence.

      No new tenancy required, just old tenancy and that/whose notice(s). But council may not understand the law on these things...

      It's the tenant who owes you rent, not council: Pursue her, s21, s8,McOL..
      I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

      Comment


        #4
        We were attracted by the good price of the flat and having no experience at auction we have thrown ourselves into the deep waters thinking it would be a good bargain. It wasn’t! The sellers had everything covered in the legal pack and our solicitor was a little careless. Our solicitor advised us to take legal advice from a tenant solicitor.


        Strangely the deposit isn’t mentioned in the old contract and from what I understand from the tenant she didn’t pay any deposit. But as I said the house needs major decorations if we are to rent it out to another tenant we cannot afford to serve her eviction and to have the redecoration done.


        We dis serve her section 48 and she did sign a letter to say that she agrees for the rent to paid to our account however the council requested for us to have a new tenancy agreement.

        Comment


          #5
          Hey, I made mistakes when I started: I then resolved to learn: And did: And am still learning: And still making mistakes!

          Suggest you read s3 LL&T 1985
          http://www.legislation.gov.uk/ukpga/1985/70/section/3

          in particular 3(3)
          (3) A person who is the new landlord under a tenancy falling within subsection (1) and who fails, without reasonable excuse to give the notice required by that subsection, commits a summary offence and is liable on conviction to a fine not exceeding level 4 on the standard scale.
          You have to supply your ACTUAL address (even if not in England or Wales) unless bought by a company. If your s48 notice gave that info you've already complied.

          Criminal offence (sadly rarely enforced), Level 4 fine is up to £2,500.

          The tenant does not have to sign any new tenancy nor agree to any changes. If you want her to sign offer her a rent reduction (counter-intuitive perhaps, of no value to her if HB covers all the rent today)
          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

          Comment


            #6
            The old 'buy in haste, repent at leisure'.

            it does sound like the seller/his solicitor stitched you up good.

            Probably why it was at auction with a sitting tenant.
            Less time to check the legal details.

            At least no deposit is one less worry.

            Comment


              #7
              The solicitors sent her section 48 but as she does not speak English (nor that I speak very good either) or understands the basics makes things even more difficult. They now put a stop on her housing benefits up until they said we are coming with a new tenancy agreement.

              So you think that we should not make another agreement? I am going to speak with the council tomorrow again, hopefully I’ll find someone else who has better understanding. But there as someone says the HB is hers and the council may not agree to pay me directly and I doubt she would ever pay me if the housing benefit would be sent to herself. It’s so convoluted.

              Comment


                #8
                Normally councils will only consider paying HB directly to the Landlord if the tenant is in 8 weeks or more rent arrears.

                Obviously if you make a new tenancy agreement then that's at least 8 weeks before she could be in arrears on that new tenancy agreement.

                And your 'new' tenant is not in rent arrears to you.
                (Or to anyone else since you have kindly paid her debt to the ex-LL).

                If you have bought her debt as part of the house purchase then it is no longer rent arrears, it's now a debt.

                Comment


                  #9
                  Why pay someone elses rent ? ( £ 3000 )

                  This means she will rack up another £ 3000 rent arrears, doesn't it ?
                  The tenant owes the money, and not anyone else.
                  The house was sold because the landlord / freeholder did not have the balls to evict.
                  You don't have those either.

                  If you don't refurbish, the tenant can take you to court to do repairs, via the council.
                  You are stuffed either way.

                  Evict, and refurbish.
                  Stop your take away meals, your sky T.V payments, etc etc.so you can refurbish.
                  I don't have any of those, therefore can run a ( cheap ) Rolls because of it.

                  Comment


                    #10
                    It was a stich up as someone else said. The costs were way larger than we expected. On top of the last minute rent arrears we had to pay, the sellers solicitors had a hidden clause of 2% of the sale that neither us or our solicitor pick up. As a result we had to borrow a large amount from friends and family.

                    The tenant was in the flat for 4 years. At some point she had a cap in her benefits and her housing element was reduced. She said the landlord agreed informally to take the rent down (it was unreasonably high initially).

                    The flat is very dirty, something I could have never imagined people can live like this.

                    We are thinking to put it back to auction but the moral dilemma is we wouldn’t want to pass our problems to someone else.

                    If anyone knows a good and reasonably priced solicitor that can help, I'd be grateful if you can recommend.

                    Comment


                      #11
                      If you bought it, and agreed to all the conditions that went with it, then it's now your problem.

                      Another solicitor is not going to help now. (Unless you are trying to sue your previous solicitor for not spotting the conditions?).

                      That's why problem properties are sold at auction.
                      They are cheap because there is something wrong, either structurally or legally.

                      So you can write off your lossess, evict, refurbish the property, re-rent.
                      Or try to auction it off - to someone else who has not done their homework.
                      Or a combination- evict, then auction with no sitting tenant.

                      Either way it looks like you are going to be making a loss on making a hasty purchase without checking things out.

                      Comment

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