To receive direct payments under UC or not to receive - PLEASE HELP. | Discuss

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To receive direct payments under UC or not to receive - PLEASE HELP.
13/09/2013
11:52 am
Confused@EastMids
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Good Morning LL’s & LA’s

 

I’ve just read this in the East Midlands Private Sector Landlord Magazine and if I wasn’t confused before I am now! Yell

The government has announced that landlords will still be able to receive direct payment of rent after the launch of Universal Credit.

Direct payments will occur in situations where rent arrears have accrued and the landlord will have to apply to the DWP.

It is not yet clear what level of arrears will need to have accrued to trigger direct payments, but the DWP has promised that this will be clarified prior to the launch of UC in the autumn.

An element of Universal Credit will also be withheld from the claimant to clear the arrears. Currently this element is capped at a maximum of 5% of total benefits claimed but this threshold is also under review.

 

The new mechanism is very similar to the existing system under the Local Housing Allowance, where housing benefit is paid to the tenant but can be paid direct to the Landlord if a given level of rent arrears have accrued.

Please help, anyone?

13/09/2013
12:15 pm
David Price
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Do I detect the faint but sweet aroma of a government U turn?

13/09/2013
8:00 pm
PaulBarrett
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Ridiculous scenario.

Based on the OBC of £500 pw it would take 12 months to recover rent arrears of £1200!!!!!

I’m sure the lender will give this leeway to a LL with NO detrimental effects……………………………NOT!!

If this situation occurred to me I would be evicting the tenant even if there was a strategy of repaying the arrears

It would take ages to evict and it wouldn’t matter if it took 12 months to evict as the rent would be paid direct.

Problem is the tenant could decide to leave and source a tenancy elsewhere; then what!?, would the UC rent arrears be paid to the previous LL.

Of course the new LL would need to know what is going on but wouldn’t.

This UC situation is still fraught with many issues and the article is very simplistic in NOT understanding the ramifications of circumstances.

15/09/2013
11:47 am
LorettaWight
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the current system in scotland is that although the tenant is in arrears of 8 weeks, you only get benefit after that date if claimed so you always be 8-12 weeks in arrears (3 months arrears in scotland) and receive nothing.  The state may claim this back but the landlord doesnt see it.  The landlord will only get benefit from the date they can ask for direct payment.  also the problem is that in scotland the benefit system is 8 weeks behind on paying LLs.  so you will be without money for 5 months at least.  then only receive 2 or 3 months money. 

they dont even have to give you the 28days notice money which under the law they should but can refuse to do this under DWp decision making.  Rubbish.  Also they have said they will consider after 6 months of direct debit payment in UC that they will return the payment to the tenant to have another go at being responsible.  it will be a complete mess. who will want to put up with this. The DWP doesnt follow the law either.

although i have been approached by many housing benefit tenants to get one of my flats i am no longer willing to put myself through the forms and non payment.  They make you feel that you are a terrible person for asking for rent. yet i am a very good and considerate ll.    

      

15/09/2013
1:51 pm
Heritage Estate Agents
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LorettaWight said

although i have been approached by many housing benefit tenants to get one of my flats i am no longer willing to put myself through the forms and non payment.  They make you feel that you are a terrible person for asking for rent. yet i am a very good and considerate ll.    

You know what Loretta, you have summed up what is rotten in this system in just one paragraph.  I am sure you are a good and considerate person, but you are also a landlord,, and landlords use property to earn money – that the sum total of it.  So why on earth are you feeling like you are terrible person for asking for rent?  Its a contract, and a contract has three parts to it, offer, acceptance and consideration, for a tenant their consideration is paying the rent, for a landlord the keys to the property.  Why should people get to live for free in your property?  It makes my blood boil so much ……..

On the flip side, if a tenant does pay a rent and an agent is managing it, we dont get paid either, so we work our nuts off for zero!   

Rant over.

Cathy

http://www.heritage4homes.co.uk
      

 

15/09/2013
6:04 pm
PaulBarrett
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I wonder if councils will finally get the message when their B & B costs spiral out of control as LL exit the HB market; and more so when UC is introduced.

These councils just don’t seem to get it.

I think they think the LL needs them more than they need the LL.

This may have been the case years ago; but NO longer.

Councils desperately need the PRS LL but due to the way they are treated by councils PRS LL are deciding not to engage with councils.

The PRS avenue is then denied to councils trying to house their homeless.

This increases their costs.

Councils would do themselves a financial favour if they were on the side of the LL rather than the tenant.

Doing so would actually save money as LL would be more prepared to engage with councils.

So the ethos should be for councils to look after your PRS LL and they will look after you.

There is however an underlying political issue with most councils that they detest PRS LL and seek to take as much advantage of them as they can as they think it saves them money.

Short term they are probably correct

Long term it forces LL to refuse to let to HB tenants.

So the proverbial cost chickens come home to roost with councils when a LL declines HB tenants.

 

 

15/09/2013
8:51 pm
LyndonBaker
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PaulB, It really comes down to the speed of eviction for non-payment of rent. If, as you have suggested it was automatic after two weeks non-payment it would cut the arrears at a stroke.They could have local tribunals comprising a landlord, an agent and a CAB or Shelter bod. There could be no hard luck stories just a simple case of fact. Can they prove the rent has been paid? Yes – you stay; no – you are evicted. There could be a small (and I mean SMALL) charge of say £25 to bring the case. Tenants could not have a get out clause by paying the day before the case is heard. It would be black and white: Was the rent paid within two weeks of the rent date? Yes – you stay; no – you are evicted. The £25 and costs of the bailiffs to be deducted from the deposit.

 

Perhaps someone more sage than myself could start a petition on the #10 website and phrase it correctly so we could all promote it?

If it ever does come in, sell your shares in SKY immediately! Smile

15/09/2013
10:53 pm
David Price
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Lyndon I can not think of a better description of landlords utopia. 

Letting must be the only industry where we have virtually no room to determine how we operate, unenforceable contracts, un-evictable tenants, uncollectable rents and that which is collected is considered to be investment income.

I am told that in Germany rent default is rewarded by a complete inability to rent another property, we need the same here and perhaps Landlord referencing will achieve this.

16/09/2013
9:18 am
PaulBarrett
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Yes Lyndon in the overall scheme of things rent arrears are a minor problem.

They are NOT a minor problem to the LL affected though!!

When you think that there are 4.2 million PRS tenants and that only about 150000 tenants have been evicted for rent arrears last year it surely wouldn’t be an issue that would be such that it would affect a govt electorally.

You would have thought that as it is a ‘minor’ issue the govt could change the eviction laws for rent arrears only to something in the way you have described.

I’m sure the vast majority of people understand that they have to pay their bills and would resent that 150000 tenants are allowed to get away with paying their just dues at enormous cost to the taxpayer.

For the sake of adjusting this eviction situation the lettings industry would be transformed and the housing crisis solved.

LL would be able to rent to anyone in the knowledge that if they failed to pay their rent they could be gone after 2 weeks.

Can’t see why there would be  problem with this methodology.

Councils would save fortunes in TA costs as LL could be persuaded to take on tenant types they normally wouldn’t rent to because of the eviction problem.

I think there would be a massive improvement in tenant and LL behaviour.

After all if a LL only suffers 1 month’s lost rent; which should be covered by a deposit then the tenant could just move out and source another tenancy pretty quickly.

The LL could then source another tenant easily.

Tenants would get fed up being booted out all the time and make paying rent the priority payment.

Even the most useless druggy 5 kid single parent would get fed up being booted out every 6 weeks.

Even they would pay the rent on time.

Govt and councils just fail to realise or refuse to accept that the PRS will no longer be the suckers they were and take on dysfunctional HB tenants.

This leaves  a big problem for them to fix.

Not doing so causes them a massive financial headache and all for the sake of ONLY 150000 scumbags.

The simpler solution surely would be to just change the eviction laws in cases of only rent arrears.

But govt is too thick to work out that doing so would actually save them money.

Even I could imagine the scenario where the council phones me up and says that they have a tenant just booted out because they didn’t pay their rent but have things sorted now.

I’d say fine I’ll take them with the warning to the tenant that if they try the same thing again on me they will be booted out after 6 weeks.

I’m sure there would be a drastic change in tenant behaviour which must be good for society all round.

Just think govt would earn an extra 440 million pounds in tax which LL avoided last year because of all the rent and other losses that LL suffered from their wrongun evicted tenants!!!

No way would govt spend a fortune on TA because LL would be willing to take these wronguns on with fast eviction now possible.

As you suggest rent arrears are not a subjective subject.

The tenant is in arrears or they aren’t; money is not a grey area!!!!!

 

16/09/2013
9:31 am
PaulBarrett
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David Price said
Lyndon I can not think of a better description of landlords utopia. 

Letting must be the only industry where we have virtually no room to determine how we operate, unenforceable contracts, un-evictable tenants, uncollectable rents and that which is collected is considered to be investment income.

I am told that in Germany rent default is rewarded by a complete inability to rent another property, we need the same here and perhaps Landlord referencing will achieve this.

How do the Germans do that; have they an equivalent to LRS in GERMANY which every LL MUST use.

Can’t see how this works in Germany.

How do they stop a tenant who has knocked a German LL!!??

16/09/2013
11:18 am
David Price
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Sorry Paul I cannot provide the answers to your questions, it is just what I was told when I negotiated to buy a flat in Berlin.  I had the impression that it was letting agents networking but just how I do not know.  I was also told that the tenants were responsible for the service charge not the landlord.

One major difference in Germany is that tenants tend to rent for a long period, tens of years whereas in the UK rental property is generally regarded as short term accommodation, at least by my tenants.

16/09/2013
11:31 am
Mary Latham
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Direct payment to landlords will be irrelevant in many cases because the benefit caps will reduce many payments to 50p to cover the rent.  Housing benefit is the first benefit to be reduced under the caps and I have now heard from many landlords that their tenants are only getting 50p.  The reason that it is reduced to 50p is because this is the minimum that can be paid and that often means that there is a further reduction in the next benefit on the list until the payment is reduced to £500 for a family or £350 for a single claimant with no dependents.

I am shocked at just how many claimants have been affected by the caps because like most of us I had no idea of the number of people who were receiving over £500/350 a week in benefits.  As the caps roll out we are going to see some serious social issues – and evictions

 

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16/09/2013
1:47 pm
PaulBarrett
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Just shows you why the welfare bill is so high.

It seems there have been substantial amounts of claimants receiving far more that the maximum OBC.

No wonder they have been living it up for years.

Now they are complaining!!

Beggars belief.

Is it any wonder why they sit on these benefits and allow the migrants to come in and do all the jobs it wouldn’t be worth the claimants coming off benefit to do.

Hard working people must despair at the level of benefit that has been achievable; even £500 pw is excessive.

That is equivalent to a gross wage of about £33575 and net of £26000

If I earn £33575 I end up with about £16000 net and then I have to pay mortgage; CT, drs , dentists.

So I am far worse off than someone on £500 benefit pw with the same gross wages.

This is why UC will NEVER make work pay.

The OBC should be reduced to about £250 pw; this should be sufficient to force people into work.

People who are feckless will have insufficient benefits and will have to work.

It would be good if the DWP handed out branded prophylactics as a hint on how to manage on welfare OBC’s

The ideal it seems for a welfare family is 2 children of each gender and a couple

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