DSS Tenants – another issue

I think it's important to treat everyone as an indervidual. I often recommend "DSS" tenants to a landlord, however I always ensure they have a garentour in place (prefrably a home owner, in full time employment, earning at least the minimum salary threshold) and ensure thy sign a deed of guarantee

Why not go down the guarantor route???

A landlord cannot be a humanist without being a capitalist first, unless they are a dilettante before both and can afford to lose the lot.

wonder if anyone can help me i have 6 property's 4 are rented out to dwp tenants my dilemma is this do i declare to insurance company and mortgage company that they are tenanted to dwp if I don't declare i wont be insured. and if i do declare and mortgage company asks to see policy will i have to pay back the mortgage as there is a clause in the mortgage that you cant rent to dss.what if i had tenants who where working and then lost there jobs do you have to give them notice can some one advice me please.

Ever heard of sleeping dogs lying!?...........leave them!

Do NOT under ANY circumstances make ANY information known to your lenders about DSS tenants if there is a clause in your lending agreement restricting certain tenant types.

Building insurance doesn't take ANY notice of the tenant type, contents insurance etc DOES.

No lender has EVER asked to have sight of a buildings policy or for that matter a contents policy, which would be taken out by the tenants anyway.

Yes you could have your own LL insurance; first I would just get hypothetical quotes for different tenant types.

Providing you make the mortgage payments the lender will be none the wiser.

Technically if a tenant was in receipt of £1.00 of HB that makes them a DSS tenant.

Do you then evict them because they are now DSS tenants which is in breach of the mortgage lenders conditions.....................................NO.
You ignore these stupid conditions,
If everybody abided by mortgage conditions there would be mass tenant homelessness, mass LL bankruptcies, mass write downs of loans and banks going belly up again and running to the taxpayer for another bailout.
Don't concern yourself
White lies can be very useful in business; I suggest you use them or better still say NOTHING, you won't be asked anything if you keep paying the mortgage.

Paul

I have mortgages with Platform and West Bromwich Building Society, both of these lenders ask for copies of the insurance every year.

Also, it does make a difference to building insurance premiums if a tenant is claiming LHA.

I agree that if your tenant goes on to benefits you wouldn't necessarily give them notice. What you should consider though is asking for a guarantor at that point. If they can't provide one then a commercial decision needs to be made.

This is a VERY interesting question that's been raised though. Clearly if a landlord lets to LHA tenants from outset he could be in breach of his mortgage conditions and does need to declare the basis of letting to his insurance company, otherwise his insurance would be void too.

I suppose there are SOME lenders that have these strictures.
I have NEVER been asked for such information.
So if it exists then LL are restricted to the lender they can use as every LL could have a tenant a P45 away from becoming a LHA tenant.
What happens then!?
EVEN £1.00 of benefit makes someone a LHA tenant.
What is a LL supposed to do; evict the tenant.
No it is one of those stupid conditions and if I had a Platform mortgage I would tell them to get stuffed.
My insurance is my business and so is who I have as tenant.
I think the issue is a DSS tenant at the outset of the mortgage; which is fair enough; but NOT thereafter,
Such a condition might only last a few months before a tenant is evicted under Section 8 or under S21 after 6 months.
Therefore it is a ridiculous and pointless condition.
Perhaps lenders might like to source non-LHA tenants for LL who would pass a RGI check; I'd be up for that!!

Hi Paul

These lenders simply charge the insurance to the landlords account if it is not provided. If a tenant claims benefits after all referencing has been done and passed the landlord may well be none the wiser. If the tenant advises the landlord that they are now claiming benefits it is in the landlords interests to advise the insurers and the lender. I have never been in this position so I am unable to say what would happen. If they insisted on me serving notice though, that's what I would reluctantly do as I'm not about to redeem my lifetime tracker rate with Platform which costs 0.68% over bank base rate.

Is it any wonder why LL don't advise lenders if they do rent to DSS tenants!
If you took into account all those LL who are in breach of their mortgage conditions by letting to them there would be mass homelessness!
I've heard all the stupid threats that lenders come out with; it is no wonder LL don't tell them anything or rather just tell them what they want to hear.
Providing the mortgage gets paid the lender doesn't really want to know!
I have NEVER had any insurer for buildings insurance ask the status of the tenant occupants and I have had quite a few claims!!!
I think in these cases economy with the truth is called for.
Lenders aren't stupid, they know exactly what is going on and therefore only eventually need too or have to know when the mortgage payments get into difficulty.
That is actually the reality of the situation, but nobody wishes to mention it; it is however one of the great unstated truths that everyone in the industry knows about..
Aren't there in fact about 3 1/2 million LHA tenants in the PRS; with them mostly in mortgaged properties which specify NO DSS!!!
But I agree that if a lender insisted on removal of the DSS tenant or lose an attractive rate then ta, ta tenant.
I have NO loyalty myself to any type of tenant and certainly like you wouldn't allow a tenant to compromise my efficacious financial products I may have in force.

The building insurance I have seen with malicious damage by tenants cover does seem to cost more if it covers LHA tenants or students. I have heard of a case when the insurance company did not pay out on a rebuild after a fire, due to the tenant being on LHA and questions over how the fire started.

Not having the correct insurance is a risk I would not take, however I don’t think a lender would spot if you brought insurance that included LHA. If the lender questioned it, you could just say that you are not in control of what a tenant did once they moved in, so wished to be covered if they claimed LHA.

Can you find insurance that covers you for LHA without it being listed on the front page of the policy as a “add on” you have brought.