Local Housing Allowance and rent increase?

Reply to the comment left by WP at 20/06/2020 - 08:55
Aah WP, now u asking me.

I have details for mine in Nottingham, but she ignores me, even though her colleagues sitting next to her go out their way to solve my queries. There is somewhere on internet u can find out, if Bill comes back on, he knows all these links. Join his site if u have only one HB tenant, it's invaluable.

I thought the increase in benefits and LHA level was temporary due to Covid? At least that’s what the chancellor said when he introduced it. I don’t remember the exact details but thought he said a year. He may decide to keep it but you never know.
You may find yourself in the position (if it is reversed) that the tenant can’t pay the increased amount.
The LHA seems here to be a reason for increasing rent, rather than that being the going rate for the property. Unless you have been undercharging previously?

Please bear in mind that the rent increase may be a disincentive for the tenant to find work in the future as they will then be responsible for the rent increase and may be trapped on benefits for longer than they would like.

Reply to the comment left by Mick Roberts at 20/06/2020 - 09:17
lol Mick! I 'll have a search, to find my own lethargic DM then 😉

I will join Bill's site thanks

Reply to the comment left by Prakash Tanna at 20/06/2020 - 08:51Hi Prakash
It makes no difference whether you're dealing with Housing Benefit or Universal Credit. In both cases the tenant's "eligible rent" is determined by comparing the appropriate LHA rate with the "contractual rent". Ordinarily, before making an award, the Council or DWP will wish to see confirmation of the contractual rent by examining an AST.
By law, you can't increase the rent during the 6 or 12 month contractual period. However, you can increase the rent after that period. One way is to have a "contractual periodic" tenancy which provides some formula/% for that or if it's a statutory periodic you serve a Section 13 notice, otherwise the rent remains as was stated on the AST, does it not?
You suggest the process is much simpler and what's stated above is unnecessary. In fact you state: "I spoke to my tenants and explained why the rents were going up and that it would be covered by their HB/UC payments unless they were on a benefit cap, in which case I would reverse the increase. They agreed and I notified the tenant/LA by way of a letter which the tenant accepted."
Just last week I dealt with a situation where a large landlord's attempt to secure the higher LHA rate was rejected because he hadn't served the section 13 notice correctly with 65 of their tenants. A few weeks earlier, I was referred a case of a landlord who had received a large overpayment demand, going back 3 years, on the basis the Council had simply accepted the landlord's assurance the contractual rent had increased, so paid HB at the higher rate, only to find out latterly, the landlord, in question, had followed a course similar to what you propose. Not a good idea!
Furthermore, I dealt with a case in Manchester a few years ago, where my client, a Letting Agent, had, over many years, been securing high levels of Housing Benefit, using joint tenancies involving the "common household" approach. For example, 2 brothers sharing a 2 bed property, each qualifying for the 2 bedroom rate. The Council had carried out a routine check with a number of the joint tenancies and discovered that where HB only paid part of the "contractual rent" the landlord was not making any attempt to cover the shortfall; effectively writing it off, as you suggest. The Council having established this with the tenants, then asked the LA if this was correct or not. The LA's owner confirmed it was and also confirmed it charged higher rents where it considered it could secure HB as market rents in the area where much lower than the yield offered by "common household".
The Council subsequently reviewed all of its HB cases, on the basis the AST agreements were simply a "sham" designed to maximise HB and the LA was abusing the scheme by singling out HB recipients in order to charge much higher rents. The resulting Overpayments were so large they put the agency out of business.
So, in your case, and many others, I'm aware of, the landlord's approach, whilst flawed, has produced the desired result i.e. increased award of HB, and in doing so, created a mistaken belief, like the one you hold. However, if, at some point, the Council concerned realises it's mistake of believing you had raised the rent correctly, it could quite easily pursue you for the overpayments.
Bill

Good Afternoon All
I have read the above thread which is very interesting. in order to increase the rent on a property where the tenant is supported by HB or UC (tenant is single mother with 8 year old has not told me which benefit she receives) , once the fixed term has come to an end becoming a statutory periodic tenancy does the landlord legally first need to serve section 13 notice directly to the tenant ?

Also where the tenant works Part time and supported by benefits , once the proposal has been put forward to the council , will they just increase the benefit part and leave the tenants own calculated proportion as is as long as tenants income hasn’t increased.

I have been looking to increase the rent for sometime but have held off due to the tenants circumstances.
However I’m now at a point where refinancing for a upcoming project is difficult due to the income not stacking up.

Reply to the comment left by BTL Landlord at 20/06/2020 - 15:34
Hello Everyone
Thanks for your information
I have a question I have never done housing benefit .

So my question is if I have a 4 roomed flat with 1 x bathroom 1x kitchen

Is there anywhere I can find a list of what I could get on rents ??

Thank you very much

Stephen

Reply to the comment left by BTL Landlord at 20/06/2020 - 15:34
With regards to whether your tenant will need to pay part of the increase in rent, it depends whether they are already paying something towards the rent out of their own income or not.
UC or WTC have a income thresholds and anything earned over that the tenant loses benefit at 63% (I believe) per pound. Very high if you compare that to taxation. So the tenant could end up paying extra, or might not, depending on their individual circumstances.
A lot of tenants in my area currently pay towards their rent from their living costs benefits, as the rent is not fully covered by the LHA. (I live in a very expensive area of the south east). But obviously this means they have less to live on.
I don’t know the answer to the section 13 question sorry.

Reply to the comment left by Stephen at 21/06/2020 - 01:03
The latest LHA rates are here https://www.gov.uk/government/publications/local-housing-allowance-lha-rates-applicable-from-april-2020-to-march-2021
you will need to know which area your property is in for council tax.
Your tenants contribution should not change unless she is caught by the benefits cap.

I've just had notification to do these rent increases proper proper, we have to do a Section 13 too. I was always under the impression we only had to do Section 13 if tenant disagreed.
However my Letting Agent who have a special Legal man won't issue a rent increase without a Section 13. So as we speak, to make sure we comply with these ever changing rules regs imposed on us, I'm gonna' be finding which exact words we need to be using out the Section 13 notice & inserting them into my rent increase letters. To save issuing separate 4 page Section 13 notice with every rent increase. I've been doing rent increases for 23 years & never had bother, but as we all know, it's becoming more & more anti-landlord every day.
There u go, what we think we did right yesterday, may today not be right.

Reply to the comment left by Mick Roberts at 21/06/2020 - 16:06
I was always under the impression that Section 13's not needed if (under the terms of the TA where it stipulates a months notice in regard to a rent rise), if I give the tenant the months notice, they agree/do not respond, and then pass the details to the DWP/HB who then go on to pay it! If at any point after my initial rent rise letter the person who actually pays the rent (DWP/HB) could have AT ANY TIME said this procedure is not 'offical/formal' and ask me to do a Section 13 which I duly would have done.
In Section 13 the guidance Point 9 actually states 9

Do not use this notice if the tenancy agreement contains a term allowing rent increases, or there is some other basis such as a separate agreement with the tenant for raising the rent. Any provision you rely on needs to be binding on the tenant. Legal advice should be sought if there is any doubt on this score.

I take it from that, the Section 13 need not be used if there is an existing contract in place with the tenant in regard to a rent increase.