Saturday, September 01, 2007

Problems with Accepting Housing Benefit in England and Wales

For a landlord who have a rental property this tin be a very attractive proposition. Rental paid by the local authorization (Council), however there are many drawbacks and a Housing Benefit tenant is often penalised before the procedure gets under way.

First of all the local authorization have the right to “claw back” rent respective calendar months after it have been paid if they happen that the tenant was not entitled to it. This agency the Landlord who have received a direct payment have to pay this dorsum and “try” to get it from his/her tenant. The same uses if a professional letting agent is involved and the rent is paid to the agent. The Agent would have got to cover themselves in their terms of business and do the Landlord reimburse them. This usually sets many agents off from accepting these payments.

Alternatively the payment is made to the tenant direct. Sounds much better in theory, because if the claw dorsum chemical mechanism is used the tenant have to pay this back. The downside to this is that a) the tenant might not pay over the rent and pass it on other needs and if they suddenly have got got got to reimburse the Council, they could have trouble in paying hereafter rent.

These local authorization payments are also often four hebdomads in arrears and this is not so good for a landlord who wishes to have the rent coming in one calendar month in advance.

The proprietor of the property have taken out Legal Protection Insurance or a Rent Guarantee Policy. Unfortunately these make not normally work if the application have not been satisfactorily referenced. If the Tenant was working from the start was satisfactorily reverenced and lost his/her occupation etc, then this could be a different scenario, however most of these types of policies necessitate sufficient income to cover the rent or a lump sum of money in advance and this volition not normally work with Housing Benefit. This now intends that the property proprietor cannot trust on the insurance policy to obtain the rental arrears or even possession.

At the end of a occupancy the Landlord might need the property back – returning owner-occupier. Etc. The tenant might be very happy to leave, however if he/she moves out and necessitates local authorization adjustment the Tenant have made herself/himself intentionally homeless. The Local Authority would set the tenant/s right down on the lodging waiting list. The option would be for the Tenant/s to wait for a tribunal order to be evicted.

These often take a couple of calendar months to arrange and can cost respective hundred lbs in legal fees. At the same clip rental arrears could be mounting up. You cannot often even utilize the sedimentation to offset some of the rent (assuming that there is no damage) as many local government no longer monetary fund a sedimentation but have got put up a sedimentation warrant strategy whereby instead of paying a sedimentation they will vouch a “paper” deposit.

Unfortunately Housing Benefit is not always an attractive proposition.

No comments: