Should landlords have the right to refuse DSS tenants?

Should landlords have the right to refuse DSS tenants?

10:43 AM, 20th May 2019, About 6 years ago 125

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And so the onslaught against private landlords continues. Earlier this month, we were shocked to hear that a cornerstone of tenancy law in the UK was to be overturned, with the scrapping of Section 21. Farcically, we were told that a consultation would take place after the decision had been made.

This was an unexpected move, as in fact the Government had been conducting one of their ‘post-decision’ consultations on the idea of ‘3-year tenancies’ (something Shelter had been pushing for). Section 21s had not even been on the agenda. Such is the floundering, knee-jerk politics of today, that a completely different policy decision emerged from it.

The abolition of Section 21s had been called for by the anti-landlord organisation Generation Rent. As part of their campaign, they deliberately misrepresented Section 21 by repeatedly referring to it as a ‘no fault’ eviction – such that this phrase is now used by everyone, as though landlords evict the clients they are dependent on to cover the costs of their businesses, ‘for no reason.’

In fact, as we all know, often Section 21 is used because it is the least awful solution to dealing with rogue tenants. The anti-landlord representatives say it means landlords can evict ‘at a moment’s notice’ when in fact, although it is supposed to take 2 months, the average time taken is 6-7 months if the tenant does not want to leave. During this time, the tenant is often paying no rent.

The reason the only other possible Section – Section 8 – is not used as often is because the tenant can raise spurious defences, for example lying that the house is in disrepair.  The judge often then adjourns the case and the tenant gets even more months rent-free, while the landlord is pushed further into debt through no fault of their own – some even have to take out loans to cover the mortgage on the rental in which the tenant is living.

This is not only costly financially; a survey has found that private landlords’ mental health also suffers significantly because of, amongst other things, the way that the system is set up to enable these rogue tenants to ruin landlords financially, especially, as it is often the case they also wilfully wreck the property. Landlords’ mental health | National Landlords Association

This can cost landlords tens of thousands of pounds. No-one in Government is looking at this issue at all. The demonisation of private landlords has gone so far, hardly anyone in politics or the media is speaking up for them, despite them facing these gross injustices and the legal system completely letting them down.

And now, if, as is expected, the Government continues with its move to scrap Section 21, ‘charities’ like Generation Rent and Shelter will start pushing for the next punitive measure against landlords; the most likely contender for this is to somehow force landlords to take tenants on benefits, even if this is not the client group landlords wish to occupy their properties.

Shelter has been conducting a campaign on this for some time and various Government Ministers have jumped on the virtue-signalling bandwagon. Shelter has even been bullying landlords and letting agents into removing the words ‘no DSS’ from adverts and they also threatened to sue a letting agent, before the agent settled out of court, rather than face the stress and costs of a court case. Shelter now represents this as a legal victory and claims it is now recognised as discriminatory to specify ‘no DSS.’ It isn’t. Being in receipt of benefits is not a protected characteristic according to equal opportunities legislation. Settling out of court to avoid the stress and costs of a £60 million ‘charity’ hounding you through the courts does not create new law.

As part of their campaign on this, Greg Beales, Campaign Director at Shelter, has claimed that there is no evidence that tenants are benefits are ‘less-good’ tenants than others. There’s ‘no evidence that people on benefits are ‘less-good tenants’, says Shelter spokesman

He said that, given that, landlords and letting agents who do not accept those on benefits are engaging in ‘disgusting’ and ‘immoral’ practices. https://inews.co.uk/opinion/comment/housing-benefit-renting-no-dss-shelter/

Such rhetoric demonstrates his ignorance. Of course as Shelter provides no housing to anyone, they would not have first-hand experience of the issues involved. As landlords, however, we know that there are many reasons why it makes no sense to accept people on low wages and/or on benefits. No amount of banning landlords and agents from specifying ‘no DSS’ will change these facts.

Some of the reasons why it often does not make sense to accept people on benefits as tenants:

  1. Tenants on benefits often cannot afford the rent. This is partly because benefits have been capped and have not kept pace with market rents. Housing benefit on average only covers 57% of the cost of a private rental. https://speyejoe2.wordpress.com/2018/08/23/dear-polly/ What I want to know is: why would a person agree to rent a home to someone who so clearly cannot afford to rent it?
  2. The housing element of benefits, including in the new Universal Credit system, is paid in arrears, and landlords need the money in advance as that is when they pay their mortgages. Working tenants pay in advance and are therefore able to meet the terms of the tenancy agreement.
  3. If for some reason the tenant does not make the benefits claim in the right way, on time or at all, or if they do not turn up for an appointment, lie or make a mistake in reporting on any work they’ve done for example, the benefit can be stopped. The landlord then does not receive the rent because of something the tenant did or didn’t do. Large amounts of arrears can accrue in this way, which the landlord will not get back.
  4. If it is discovered that the tenant in some way claimed fraudulently, the authorities have been known to threaten the landlord and/or ‘clawback’ the money by not paying the rental element for another claimant the landlord is housing. A landlord was recently threatened with having to pay back 4 years of the housing element paid to him, because of a fraud by the tenant. What landlord wants to face this prospect, when they can simply house people in work?
  5. If a tenant does not pay the rent and is evicted owing a lot of arrears and/or having caused damage to the house and the landlord has incurred legal and court fees, with a working tenant they can apply for an attachment of earnings and eventually the debt can be repaid to them. With a tenant on benefits there is no employer on which to apply an attachment. There is therefore no way the landlord can ever recover the debt.
  6. If a tenant is on benefits and/or on low wages, they may struggle to heat the house. Without proper heating and ventilation, the house may fall into disrepair. If the Environmental Health Officer then calls around, they will most likely blame the landlord for the disrepair. So the landlord’s home is adversely affected and they then face possible fines.
  7. People on benefits naturally spend more time at home. This increases wear and tear on the property.
  8. Often insurance companies and lenders specify that they will not accept tenants on benefits. In such circumstances, if the house burnt down for instance, the landlord’s insurance would be invalid. In terms of contravening the lender’s requirements, the landlord could face the liquidators being called in if the lender finds they have contravened the terms of the mortgage. The landlord could face a demand to immediately pay back the capital; this will usually be impossible. The landlord in this situation would face huge losses, purely because they had accepted as a tenant someone on benefits.
  9. Because of the Government’s fiscal attack on private landlords – most outrageously and absurdly in Section 24 of the Finance (no.2) Act 2015, which means landlords now cannot offset the finance costs of their businesses before calculating profit – it is imperative that landlords select the tenants with the greatest means and get the rents as high as they can go. This is not for the landlords’ benefit, but rather to pay the huge new tax liability, which can exceed 100% of actual profit. This is explained in a briefing paper I wrote for the Institute of Economic Affairs with the economist and professor Philip Booth. Taxation without justification — Institute of Economic Affairs
  10. Also, if Section 21 is scrapped, landlords face tenants being granted lifetime tenancies. If this is the case, then landlords will want the best possible tenants to occupy their properties – ones who have no problem paying the higher rents forced on the sector by the Treasury and ones who, as mentioned, can afford to look after the house properly. This will greatly restrict the options for those on benefits. As the economist Ryan Bourne has stated: “The results of this policy are therefore obvious to anyone who understands basic economics. First, landlords will be far less likely to rent to tenants they consider high-risk. The incentive to engage in serious vetting, demanding extensive guarantees from tenants, will skyrocket. https://www.telegraph.co.uk/business/2019/04/26/no-fault-evictions-ban-epitomises-paucity-tory-economic-thinking/

This final point demonstrates how various forms of Government interference in the private rented sector are having the opposite results to the alleged intentions. One change causes landlords to not be able to take on tenants on benefits; the next tries to ban them from not taking on tenants on benefits. We all know the next will be rent caps. It is like trying to shove a lid on a boiling pot when it is about to boil over.

And at the same time that they are trying to ‘disallow’ landlords from having control over their own assets, are ‘disallowing’ landlords from offsetting their finance costs, and ‘disallowing’ landlords from choosing the tenants they want, they leave the social sector completely alone despite 61% of eviction notices actually coming from this sector 24housing and despite the fact that this sector also is moving away from accepting tenants on benefits.

As an expert on this said: “Shelter and the National Housing Federation are engaging in deliberate known deceit in their combined campaign over NO DSS in the private rented sector – A campaign that is so superficial it shames them both…Social landlords… do routinely operate affordability tests and they do refuse to accommodate the benefit tenant and thus they operate the same NO DSS practices as the private landlord.” https://speyejoe2.wordpress.com/2018/08/23/dear-polly/

Where is the hue and cry about that?

No. They turn a blind eye to this, because they are fixated to an almost manic degree on private landlords; a fixation which is already starting to wreck people’s lives by pushing them out of housing.


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Jonathan Clarke

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9:17 AM, 15th June 2019, About 5 years ago

Reply to the comment left by ameliahartman at 12/06/2019 - 03:25``Yes. It was one of the most stupid decisions ever to pay the housing benefit to the tenant! Even though we can now get it paid to us after 8 weeks of arrears, it is simply not good enough``
I get all mine paid direct from day 1. No rent arrears needed to be evidence and no vulnerabilities needed . The 2010 HB amendment regs added a small but widely still unknown clause that allows direct payments to secure a tenancy. It came in in April 2011 and my council wasn't aware. I showed it to them and they amended their direct payment application form as a result . I also added a clause to my AST to reflect the new regulation and every one now comes direct just on the strength of this amendment . So its worth asking them the question. Its a regulation not a law so different councils take a different view on implementing it . If they resist I suggest apply pressure locally using a friendly councillor / MP as I believe in this climate of a housing crisis they are more likely to accede to request to use the regulation to ease their sec 21 workload . They are also looking more to help people stay in their house with the Homelessness Reduction Act now in force providing them with more obligations to actively help people stay in their homes. So for 9 years it has been a vital tool which has kept me in the HB market. UC will eventually go that way I`m sure but they have unfortunately forgotten to look at the lessons learnt in the past

Mick Roberts

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9:25 AM, 15th June 2019, About 5 years ago

Reply to the comment left by Jonathan Clarke at 15/06/2019 - 09:17
JC, this thread & the other one is similar, I thought there was a 118 site fault then mixing the two replies up.

Yes after 8 weeks is simply not good enough. Why let a person stab 8 people before u lock him up? Act as soon as u see the damage.

Below is a letter this week between me & Job Centre JC. Managers are great & I am having to tell them, teach them, as they KNOW NOTHING of housing people.

Please all u people on here, use these words, spread them, no copyright here, if u make your fortune eventually from these words, then treat me in years to come.
The more & sooner we get the message to UC & all the Job Centres, the better.

I'm getting 13 out of 14 UC claims paid direct to me so far, so let's plug on.

JC & UC are making all the mistakes HB made in 2008. I’m surprised UC don’t make it standard practice for JC staff to visit HB to find out what happened when LHA came in, in 2008.
Everything we going through now, I’ve done with HB LHA in 2008 & it cost them tens of thousands of pounds in compensation to me alone, never mind the other thousands of Landlords up & down the country. It’s Mind boggling how UC are allowing this to be repeated. Maybe cause it’s over 18 months for a complaint to be resolved, so none have done the system yet.

It is such a simple solution to avoid this happening. Learn what HB had to learn to do & that is ask the Landlord for Proof of rent, so much so that no HB LHA form could be input without a Landlord Proof of rent form.
The biggest mistake HB made in 2008 was believing tenants when they said they wasn’t in arrears.
UC should be telling JC the guidance which is at the bottom of this email. Put simply, you cannot ask the tenant if they are in arrears & they say No & pay them. So tenants aren't responsible enough to pay the water company direct, or their loans to DWP direct without DWP deducting the loan money first, yet tenants are responsible enough to give them the £536 HE money which could put their home at risk?

For years JC has been dealing with tenants JSA IS £74pw & all of a sudden now JC is dealing with tenants who are being given between £1200 & £2000. You are going to get some lies when that money is involved with them. It’s a lot of money for them. Lies will ensue. They need their money to eat & bills & if it’s Housing Element HE money, money to book holiday to Spain.

Some notes below if you’d like to stick em up all over JC walls or I can if u like Daniel Blake film ha ha.

UC taking tenants word for arrears etc.

If someone come to job centre saying I have 5 kids is there word enough?

Does a new employer take the tenants word for it that they reliable and good? Or do they ask the current employer for a reference?

Do u apply for University and tell em u got straight A's and they believe u and put u on the course automatically? Or does the University require proof from the people who supposedly gave u the A's?

Does a Letting Agent take the tenants word for it that they paid all their rent and not smashed their current house up? No, they ask the Landlord.

So why and how can JC and UC just ask the tenant if they in arrears and just take the tenants word for it and then give them up to £1300 FREE taxpayers money and not ask the Landlord who will tell u truth?

Mick Roberts

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9:28 AM, 15th June 2019, About 5 years ago

Part of my complaint letter:

So it appears the case manager at UC in his fine wisdom has decided to pay the tenant directly. Because she says she’ not in arrears. Gees, are u lot Einstein or what?
Do you not learn from your own departments? LHA in 2008 did the same, asked the tenant if they was in arrears & said Mick, they not in arrears, we paying em the rent HB.
It’s gonna’ be in tenants best interests to say not in arrears as u they then know they gonna’ get some more FREE SPONDOOLIES to go pub with or buy heroin or book holiday to Spain. Surely u not that thick to not understand that?
Have u been a naughty boy? No sir I haven’t. Ok, here’s your knife then if u tell me you haven’t stabbed anyone, but I not gonna’ ask the man over there with blood running down his shirt, I’m gonna’ take your word for it.

When for the 89th time are u going to stop asking for tenancy for rent arrears proof? This proves NOTHING!
When are u going to stop asking for UC47 form at beginning of claim when Rent proof letter from Landlord suffices MUCH MORE?

Go & ask HB. YOU HAVE TO ASK THE LANDLORD IF ANY RENT ARREARS!
You cannot trust nor rely on the tenants word. I shun’t be having to repeat this 11 years after the same LHA Govt departmental mistakes.
I’d sued Nottingham HB for £10,000+ for exactly what you have done here. You have no defence. Can you not see that? Oh she says she’s not in arrears. I’d say Pay her then. And they did ha ha u cun’t make it up. Ombudsman saw different.
No wonder no Landlords aren’t taking UC any more.

MoodyMolls

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11:09 AM, 15th June 2019, About 5 years ago

Reply to the comment left by ameliahartman at 15/06/2019 - 05:31
Do you still house the defaulting tenant?

Jonathan Clarke

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14:39 PM, 15th June 2019, About 5 years ago

Reply to the comment left by Mick Roberts at 15/06/2019 - 09:28
Spot on as always Mick . Its schoolboy errors they make . Over the last 10 years I`ve suggested a working party or a steering group to be set up so that they listen to the LL`s perspective because every time i tell them my side they seem to be mildly surprised and then they go into denial. They say - yes a working party would be a good idea but never never never ever follow it up. It seems they are incapable of putting themselves in someone elses shoes and working with the very people they should be . What i do now is copy in the homeless dept whenever i e mail HB, LWP or DHP . I say if this is not sorted it will come full circle and you will still have to pick up the pieces so try to work together internally to sort it out . It seems they are as bad at communicating between their own departments as they are with us....

Whiteskifreak Surrey

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15:12 PM, 15th June 2019, About 5 years ago

Reply to the comment left by ameliahartman at 15/06/2019 - 07:24
Thanks Amelia, that explains
Of course id properties are own outright, it is no issue. Unfortunately lots of us cannot ignore that problem.
As for shop work, it was Luke P's comment so I will not reply.

ameliahartman

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16:04 PM, 15th June 2019, About 5 years ago

Obfuscated Data

Mick Roberts

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16:23 PM, 15th June 2019, About 5 years ago

That's it Jonathan, I think sometimes are we getting old.
But it's only 11 years ago. Do they not learn from history.
Everyone is different & some tenants need a helping hand. U want 'em to get a job & that, but at the same time, u chucking all this money at 'em they not used to.

It's new council staff & new UC staff kids, that just not got a clue what goes off out there.

Good idea emailing homeless, as if they all worked together from the beginning, would be much cheaper & time saving for all.

Mick Roberts

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16:24 PM, 15th June 2019, About 5 years ago

Reply to the comment left by ameliahartman at 15/06/2019 - 16:04
Our Homeless dept has some good senior staff to talk to, but they freely admit they get nowhere with UC.
They should maybe come talk to your Housing Options & get some tips cause obviously some councils are doing it better than others.

Mark Shine

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22:00 PM, 15th June 2019, About 5 years ago

Reply to the comment left by ameliahartman at 15/06/2019 - 16:04Is “Amelia “ your real name: not Pauline/Polly? If not, I do sincerely apologise... but it does seem that “Amelia” (unlike most LL’s) has had quite an unusually easy ride with troublesome tenants particularly given how many PRS properties you claim to be be letting?

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