Here is a blog clinic question from Paul who is a landlord
I had a housing benefit tenant who absconded after months without paying any rent whatsoever. It turns out she never actually left her previous house in another council area, but used my property as a second home.
I had to go through the section 21 process to evict, but ended up with arrears of over £3,000. When I contacted the council to inform them of this fraud (someone on benefits should not have 2 houses) and to request a deduction from their benefits for the rent arrears, they said ‘the tenant never registered for housing benefit at your property so you are not entitled to any refund/arrears from us’.
Is this correct or is there another way I can recover the arrears?
So far as I can see Paul you are not going to be able to recover these arrears from Housing Benefit and I suspect you will not see your money.
Housing benefit is not there as a ‘pot’ for landlords to make a claim against if their tenants fall into arrears. It is a benefit which is paid to tenants to help them pay their rent if their circumstances fit the criteria. There are strict guidelines under which it is paid and at present it is paid to the tenant and not the landord.
There are only two circumstances where it will be paid direct to the landlord. The first is if the tenant is deemed to be ‘vulnerable’ for some way. You and the tenant have to apply for this and the application can take some time to process.
Then if a tenant is in arrears of over eight weeks / two months, the landlord can contact the Council and ask them to pay the rent direct. However this cannot be used for arrears, and they will not do this if the tenant has moved out!
Even if you have a County Court Judgement I don’t think you can use this at present to get any payment from the tenants benefit (although you can get an attachment of earnings order against a judgement debtors salary if they have a job).
There was some talk in the press about making deductions from benefits for people convicted in connection with the summer riots, but I think this was for magistrates courts fines, not the landlords rent arrears.
The real answer Paul, is to be extra vigilant when choosing a tenant in the first place. Doing proper referencing and credit checks will help you spot the dishonest tenants.
You can get an attachment of benefit against “current” tenants, but of course most tenants against whom you have obtained a CCJ are “ex tenants”.
Thanks David, but I did have a recent tenant also from whom the council deducted arrears from a tenancy previous to mine! So I am not sure that is always the case? Correct me if I am wrong. Maybe it varies by council
Thanks for that David, it is some time since I did any County Court debt collecting work. Do you apply for this using an attachment of earnings order form or is there a separate process?
What triple idiot decided it would be a good idea to have HB paid directly to tenants I’ll never know.
Some dodgier private landlords have a tactic of ringing up HB and falsely claiming that the tenant’s 8 weeks in arrears and asking that the HB is paid directly to them. Which usually causes a ruckus because my local council then, as a matter of course, stops HB until it’s resolved by which time the tenant is in arrears of 8 weeks or more.
Yesterday Lord freud announced that they are considering rescinding the daft system of direct payment and are piloting it with 6 local authorities to see if arrears, presumably of less than 8 weeks, should trigger payments to landlords.
And @Paul, you got ripped off mate I’m afraid. It will be up to HB fraud one her actual HB claim to decide if they want to persue her but I doubt they will. Fraud teams have to balance out the amount it would cost to recover the money, against the likelihood of actually recovering it. There is no point in throwing good money after bad so unfortunatly they have to take a pragmatic approach, which means that some scammers walk
Thanks Ben, surely the council WOULD proceed with this. They certainly go to court over council tax arrears of just a few hundred, and that is often where it is just non payment. This is actual fraud that costs taxpayers. I haven’t heard anything from the council on it so I have to assume you are correct and they have not bothered, which is just ridiculous. The cost to them would be negligible and they could actually stop payment of HB to that tenant which would save a fortune.
. . . . and why should it just be the idle rich that get to have second homes? Aren’t the idle poor similarly entitled?
It does sound like Paul is not going to be able to get his £3000 back. If this tenant was introduced to him through an agency I suppose he might be able to bring a claim against them for misrepresentation (if indeed they made any representations as to her tenant-worthiness) or if they failed to take up references.
If her present accommodation is an Aladdin’s cave stuffed full of wonderful consumer goodies, I suppose he might send round the bailiffs. I recall that another poster said he had more luck in this regard when he transferred the matter across to the High Court so that it would be the sherrif’s men rather than the County Court bailiffs who would come a-knocking at the defendant’s door.
Unless Im entirely misreading … the tenant *didnt* claim Housing Benefit so that’s not fraud. Nor have they committed fraud against the landlord (unless they specifically said they didnt have any other accommodation),
If the claimant HAD claimed housing benefit – then there are certain circumstances where a tenant can lawfully claim it on two homes (exceptional and time limited circumstances) – again its not fraud (unless they LIE about the two properties)
What the tenant DID do – was move into a property, not pay the rent, and then do a runner.This is nothing to do with housing benefit.
There is an irony here … if the tenant HAD claimed Housing Benefit fraudulently, or in error (which it appears they didnt) and it had been paid directly to the landlord then the landlord may have found themselves having to pay the LA back.
I’m being picky because housing benefit departments are quick to pounce on tenants for changes in circumstances, plunging them into rent arrears to the landlord, but slow to resolve their own innefficiencies – and it doesnt help if we also use a sloppy definition of fraud ;)
Interesting comment. Surely, the fraud is in having a second home that you live in, do not pay any rent in, yet do not disclose that to the other council that you receive HB for? Having a second home is a ‘change in circumstances’ which the tenant did not disclose so the council. Perhaps that is not fraud in the letter of the law, but it is in my view in the spirit.
It was my bad for not ensuring that they had filled out their HB claim before they moved in, yet I had no reason to believe they wouldn’t. Now obviously I will do this.
Good point Cait.
Re-Reading the article my eyes alighted (can eyes do that?) on the fact that she had a council house elsewhere. My fraud antenna now wants to know why she was renting elsewhere. Is she illegally sub-letting her council house? In which case she is no longer a secure tenant, having ceased to occupy it as her sole or principal home.
Yes Tessa…I know I’m going off topic so I’ll stop haha
God point Ben, she may have been doing that, but I will never know.
Thank you all for the responses on this.
I may consider using the High Court & Sheffif process to recover the debt. Do you know what the likelihood is with just a signed tenancy agreement and a left behind load of bills in her name and a National Insurance card in her name (obviously a sloppy fraudster)?!