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First Experience with HB tenants


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Hi All,

 

My first post despite this forum being among my first ports of call every morning!

 

I currently have two BTL properties but am still very much a beginner, reading and learning as much as possible.

 

It looks as though I am about to have an offer accepted on my third BTL. It is a low-end one bed flat which I put in an offer for well BMV. The current tenant has been there for a mighty 25 years! This set alarm bells ringing as regards what kind of a contract he is on. However, it appears to be a standard periodic AST agreement with a two months notice period rather than the scary Assured kind! Though this hasnt been checked by my solicitor yet.

 

My question is this, the tenant is on housing benefit and paying £325 a month. This has not been raised for many years and I am sure he is now due more than that amount. How do I get the ball rolling? Do I first talk to the tenant about this, should I get in touch with the LA directly? Is there a way I can assure myself that he has a bigger rental allowance than £325 before I go forward. It's not defo a game changer as I'm probably only realistically talking about a raise to £350 a month but I'd like to know.

 

I think it will be a good experience for me to start dealing in this area as I'm sure it will come up again and again in the future so best to start now. Any help appreciated!

 

Thanks,

Steve

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Hi Steve 

 

These two government sites should give you the info you need...

 

1) This site will tell you what renter is entitled to i.e one bed flat or bedsit etc.  http://lha-direct.voa.gov.uk/BedRoomCalculator.aspx 

 

2) and this site will tell you what the local authority pay in LHA just put in the post code of the property and how many bedrooms  http://lha-direct.voa.gov.uk/search.aspx

 

If he is on full benefits then you will know exactly how much LHA he will get from these 2 info sites. However if he works and is getting benefit top-up you won't know how much he's going to get for the websites. 

 

Glad to see your getting the tenancy checked out by your solicitor I know I'd be straight onto my Landlord Associations helpline with that one!

 

Keep us posted. 

 

Luise 

Luise-L.jpg

The Cardiff meetup takes place on the first Thursday of every month, find out more here

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Hi Steve,

 

welcome to the fun of LHA tenants.

I was in a similar situation to you, where I bought a property that had a sitting tenant who was receiving benefits - she'd been there 18 years without a single rent increase, while her benefits had increased.

 

I left the co-ordination between the council and the tenant to my letting agent, but after all the benefits were sorted I increased the rent by just under 10% to bring it in line with market rates.

Understandably the tenant didn't like the increase, so I agreed that she could stay on the cheaper rate for 3 months before the increase kicked in.

 

Just recently her benefits have gone down, I suspect due to increased hours at her work, so we're again having to make changes to the amount the tenant tops up above the LHA payment.

 

Certainly never a dull moment.

 

Hope you get some good news from the council regarding your tenant.

 

K.

Check out my property journey here:  http://diytopropertyinvestor.co.uk/

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Thanks for your help.

 

That website was very useful Luise, though it didnt produce quite the results I was looking for. It came out that he is paying pretty much exactly what he is due. He is unemployed and on disablity allowance so I assume what I'm seeing is a set figure? Like I said, this area is completely new to me so I'm learning as I go.

 

Kylie, I suppose like you, I will seek my letting agents advice and if the purchase goes through let them deal with the set up.

 

I am still waiting on confirmation on the terms of the tenants contract (with the fact that hes been there many many years in mind!)

 

Thanks again

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Hi Steve

From my experience with dealing with Tenants claiming HB is when it comes to wanting to take back possession of the property you need to have them evicted ie by issuing a section 21 and then enforcing the notice. Dependant on the solicitor costs are in the region of £1500.00 for this inc court fees etc. . I am a property manager and cover properties in The London borough of newham. I am not sure if all councils are the same but bear this in mind. Also as they have been there for so long they could be a 'protected tenant'. I would check that out also

Hope this helps

Kieran.

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Thanks Kieran, I have been advided twice over by the estate agent that he is on an absolutely standard AST contract with a two month notice period which is ongoing. They actually had the contract sent over and have seen it.

 

I still have trouble believing them considering hes been there 25 years and seemed, how should we say, very confident of not going anywhere when we met. I have passed it on to my solicitor. I am away at the moment, but should find out the results in the next few days so will let you know!

 

Steve

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