At present the general rule is that housing benefit is paid direct to tenants, who then have the responsibility of paying it over to their landlords.
Needless to say many tenants find managing money difficult and fail to do this, leading to rent arrears, leading to landlords having to take proceedings to evict them, leading to landlords experiencing (often massive) losses due to these arrears and resolving never to take housing benefit tenants again!
And indeed in the present housing shortage there are usually plenty of non benefit tenants around, able to pay market rents which are often well in excess of the rents allowed by Housing Benefit.
Up to now been two ways that landlords can get payment direct to them when tenants are on housing benefit:
1. The eight weeks arrears rule
The rule in section 95(1)(b) of the Housing Benefit Regulations 1996 which provides for the benefit office to pay benefit direct to landlords if the benefit is eight weeks or more in arrears (which applies also now to situations where tenancy agreements provide for rent in advance)
2. The vulnerable tenant rule
If the tenant is classed as ‘vulnerable’ then the benefit can be paid to the landlord direct. However there has to be an application for this and the situation needs to be investigated by the benefit office first.
Are they going to be scrapped?
There are now a number of rumours flying round the Internet and elsewhere stating that the right for landlords to claim payment direct if a housing benefit tnenat is eight weeks or more in arrears is going to be removed
If this is true then it is going to have a very negative effect and will almost certainly accelerate the move by landlords away from housing benefit tenants.
However a Landlord Law Blog reader has drawn my attention to this quesiton and answer to W&P Minister Steve Webb where he says that the current arrangements are NOT going to be changed.
How far we can rely on this I don’t know. The Q&A is dated 30 April 2012. Does anyone else have any information on this issue?