LHA tenant calendar month v 4 weekly payments

[MrNiceGuy]

Hi guys, I'm new to the landlord game so excuse me if I'm asking something that's been on here loads of times

My first tenant will be in receipt of LHA and though they've asked Council to pay me direct, there's no guarantee that's going to be approved at this stage. Am I ok with getting tenant to sign an AST that states rent is due calendar monthly in advance, but agreeing with them that they can pay 4 weekly in arrears, ie either direct from the Council or from their bank account the day after they receive the LHA?

I read a thread that supports my view that this effectively means tenant is 4 weeks behind even before I receive the first payment, which has got to be good news for me. They're a lovely family and I'm not aniticpating any problems, just want to make sure I'm not doing anything that will invalidate the AST or scupper any chances of s.21 notice etc., if needed.

Thanks
Paul

[jeffrey]

There is a notorious and unresolved discrepancy between:
a. normal AST procedures (rent calendar monthly in advance); and
b. normal HB/LHA procedures (rent four-weekly in arrears).

If T executes (or enters into) an AST on basis 'a', that's what binds T irrespective of receipts on basis 'b'.
I'd stick to 'a' in all cases but warn T of the problem. Cannot T pay at least month1's rent with own money?

[Michael Clayton]

Although you are not party to any claim for Housing Benefit, it is worth keeping a very close eye in terms of what is happening at the local authority.

The rules are clear. If a tenant is more than eight weeks in arrears, payments must be issued directly to the landlord.

Unless the tenant is fortunate, it might take at least two months in order for the claim to be processed. By that stage, you may be justified in wondering what is going on and whether or not the tenant has been paid. Do not suppose that everything will go according to plan.

I say this in the knowledge that one authority I know is already four months behind and there is little chance of the situation improving. Budgets are empty, recruitment is frozen and there is no money to employ agency staff. I will also add that morale is probably going to be low so it is advisable to be obliging!

If you want further advice, then please ask.

[Snorkerz]

Michael, is it not the case that if the Authority take more than 14 dys to process the application (after receipt of all info from claimant) then they have to give an advance on HB?

[Michael Clayton]

Yes. The authority "shall" [Housing Benefit Regulation 93(1)] make a payment where it is "impracticable" to make a decision on a claim. Also, "impracticability does not arise out of the failure of the claimant, without good cause, to furnish such information, certificates, documents or evidence as is the authority reasonably requires.....". The claimant has the law on his/her side. However, I would not encourage use of this regulation in every instance. This is because some assessors are sour-faced and will find any excuse not to pay a claim if the person pulling the strings (landlord!) gains a reputation for being too 'pushy'. Like I mentioned in my previous remarks, these offices are beleaguered and it is quite possible that certain officers will take warped pleasure in slowing things down. My opinion. Others might disagree.

[hbadvocacy]

Snorkez,

The 'payment to account' regulation should indeed compel the Council to pay HB within 14 days (assuming the points Michael makes apply i.e. it's not the fault of the tenant) but in reality it's a regulation which is very much underused by councils despite regular criticism from the Audit Commission. The problem with the regulation is it makes no allowance for councils operating backlogs (probably most nowadays) and necessitates double work. consequently councils avoid using it and tenants/LL's wishing to complain can do so but can't appeal to the independent Tribunal service if it's not used. The LGO would be the obvious route for complaint but again nowadays HB complaints are few in number.

hbadvocacy
www.hbadvice.co.uk

[MrNiceGuy]

Thanks, I've taken your collective advice and gone for calendar monthly in advance. In response to your point Jeffrey, T says they cannot pay one month from their own money, but I have insisted on a deposit, which I will lodge with DPS.
Thanks again for your help guys.

[the Optimist]

This is just my experience but it may be useful. I had an LHA tenant who, from the start, asked the council to pay his LHA directly to me, as he could not get a bank account (bad credit).
The change of rules from HB to LHA make the circumstances for direct payment very specific- it is not enough for the tenant to just tick the box on the application (mine did to no avail).

Despite both him and I being in agreement about the LHA paid to me, and despite the council agreeing verbally that his inability to get a bank account did constitute sufficient grounds for direct payment, this was never processed. We called, sent e-mails and wrote. Nothing happened for 9 months, at the end of which the tenant decided to surrender his tenancy regardless and left with rent arrears. I decided to cut my losses and move on.

There is of course the 8 weeks in arears route- but remember by the time 8 weeks have passed you will be substantially out of pocket and that LHA is only paid once (i.e. if the tenant received it and not paid his rent, the council will not pay the landlord again, nor will they pursue the matter with the tenant- strange but true).

So my word of warning: this may differ from place to place, but obtaining direct payment in any other circumstances other than 8 weeks arears is likely to be very difficult and possibly even discouraged in some quarters- proceed with caution.

[Solent Watcher]

If I can add my five eggs!!! Have considerable experience of dealing with HB in my area and they (HB) do not apply the eight week rule. they look for two things firstly whether there are rent arrears when the HB claim kicks off (person with you but then loses job). Critically they do not wait 8 weeks they make an objective assessment. They then write to both to parties to provide claimant opportunity to challenge payment direct within 7 days if he/she does not challenge then the payment thread kicks off. My area HB used to be terrible but new man at the top and I find in all my dealing with them professional and v helpful. In summary 8 week does not seem to be mandatory but merely "guidance" if rent arrears exist at the beginning of a HB claim then providing it is £400 or so they can if they (HB) so wish pay LL direct. the fact that a person does not have a bank account is not grounds for direct payment under any circumstances. So probably ask the question of your area HB in what circumstances they do not follow the 8 week rule. re process time my area is 28 days maximum.

[aprilnjune]

I was informed today by an employee of a housing association that they and all other HA's always get their LHA money direct! Is this true?

If it is true, its not fair.

Mustn't grumble.

[jeffrey]

It probably is true. Most Governments bend rules to favour those who favour them. NewLabour liked Local Authorities and Housing Associations (but not private landlords all that much).

[thesaint]

My first tenant will be in receipt of LHA and though they've asked Council to pay me direct, there's no guarantee that's going to be approved at this stage. Am I ok with getting tenant to sign an AST that states rent is due calendar monthly in advance, but agreeing with them that they can pay 4 weekly in arrears, ie either direct from the Council or from their bank account the day after they receive the LHA?

This is what I usually agree to.
I make it clear that as long as they stick to the agreement, we will allow payment 4 weekly in arrears, as soon as they default, there rent is due monthly in advance.

the fact that a person does not have a bank account is not grounds for direct payment under any circumstances.

Even if they don't have one, and can't get one because of poor credit?

I was informed today by an employee of a housing association that they and all other HA's always get their LHA money direct! Is this true?

If it is true, its not fair.

Mustn't grumble.

It's true.

LHA was supposed to empower tenants to take control of their finances.

For some reason, the government does not force this new age thinking on the local councils etc, just private landlords who are forced to deal with tenants who will not pay.

[jta]

Mustn't grumble.

Why not? If you just accept it the Guvmint will assume you don't have a problem with it.

[aprilnjune]

You are quite right, us private landlords Must Grumble, but having spent the last 7/8years going to meetings with the local council (who keep saying they are there to help) to express my concerns about such issues, have achieved nothing.
While landlords have no united voice then we will be at the mercy of what ever silly ideas the Gov come up with next.
Point of interest, there are about 3,000 landlords in the area, 4 turned up to Tuesdays meeting.
Perhaps we all need to get together and throw a few fire extinguishers off roofs.

[jeffrey]

throw a few fire extinguishers off roofs.

A bit incendiary, that. Douse your fiery rhetoric.