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One of the key objectives of the
changes is to empower tenants so
they have more control over the
allowance they receive. The
Government believes therefore that
the allowance should no longer be
given directly to landlords but
should be sent to the tenant instead
in the same way as other benefits
and tax credits.
Tenants will be allowed to use their
allowance as they choose. If they
find a property they like which
costs less than their rent allowance
then they will be able to keep the
difference up to a maximum of £15.
Money that is nominally intended for
rent could therefore be used on
something else if the tenant so
wishes.
The Government believes that
enabling unemployed tenants to take
responsibility for paying their rent
themselves will help them to develop
the kind of skills needed to move
back into work.
That may well be the case but it
introduces a level of uncertainty
for landlords over whether the rent
on their properties will be paid
regularly and on time. Tenants will
be encouraged to set up a standing
order to pay their landlord but they
will not be obliged to do so. Most
tenants will behave responsibly, of
course, but it’s likely that a
significant minority will start to
fall into arrears.
There are some safeguards. If eight
weeks of rent arrears build up then
local authorities can pay the
allowance directly to the landlord
unless it is in the tenant’s
“overriding interests not to do so”.
However, that would only cover
future rent payments. The local
authority will not pay the arrears
as it will have already paid the
allowance to the tenant and cannot
make a duplicate payment of benefit.
This leaves landlords with the
problem of how to recover the unpaid
rent. They should begin by making
sure they keep on top of the
situation and try to take action as
soon as arrears start to build up.
Contacting the local authority early
on in the procedure may help but it
may eventually be necessary to seek
repossession.
Under Schedule 2 of the Housing Act
1988, a landlord may be able to
terminate the assured shorthold
tenancy agreement once eight weeks
rent arrears have built up on a
property where the rent is paid
weekly or fortnightly. Often, a
letter from a solicitor is enough to
get tenants to clear arrears but
where that is not the case it is
advisable to begin possession
proceedings as soon as possible to
prevent debts from building up.
The Local Housing Allowance changes
will be introduced nationally on 7th
April this year. They won’t apply
automatically to all existing
tenancies but will be phased in as
tenants move properties or if
there’s a break in their claim.
Emma Dancer is an Associate and Head
of the Conveyancing Department at
Andersons Solicitors. She can be
contacted on 0115 988 6722 or by
emailing
Emma Dancer.
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