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  • LHA/Universal Credit

    LHA rent payment - reduced

    I don't normally rent out to LHA tenants, however one of my tenants has unfortunately found herself in this situation.

    Due to arrears the council have agreed to pay me direct. The problem is that they have been paying me far less than they should.

    When questioned, the council say she has been over paid in other areas so payment to me has been reduced. Can they do this? If so it makes a mockery of being paid directly!

    Thanks

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    Yes they can, she needs to make up any shortfall. This has occurred because she has been overpaid on a earlier property. This would set alarm bells with us. I would use this as an excuse to serve section 21 immediately f you are able.

    I would serve the section 21 and come to a payment arrangement with her. Explain if she fails to keep up with the arrangement you will start eviction proceedings immediately

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    [Image: New-logo2.png] Manchester based investor. I buy, sell, renovate and rent investment property in East/North Manchester Wink email: mike@brentwoodinvestments.co.uk Call: 0161 681 3724

    She has been with me for years so that's not the issue but thanks.

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    The Council is not paying you the money - they are paying her and you are receiving it on her behalf.  if the client has overpayment issues the Council will try and recoup it from her, this may mean lower payments until the overpayment is cleared.  she will receive less money, you will get less money on her behalf.

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    Shame really, I would have thought/hoped the LHA payment would be ring fenced. Thanks for the reply.

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    Regardless of how the money gets to you or from whom, it is the Tenant (tenant, not council, not their mum...) who is responsible for the payment of ALL rent, on time.

    That HB/LHA is paid in arrears does not change this.   (So, someone getting all rent paid in arrears by LHA could validly be served s8g10 when rent 1st due then s8g10&11 for all subsequent rent payments..)

    In your shoes I'd immediately serve s8g10 TODAY and then keep serving s8g10&11 for every missed/delayed/underpayment and verbally remind tenant that your policy is to inform council of any arrears.

    But only evict s21.

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    Morning Tony

    It's a common problem, caused, many times, because of overpaid LHA awards at previous addresses. If that's not the case here, it's almost certainly because, the Council believes she either misrespresented her true circumstances, when she first claimed or had a change, which she failed to report timeously, leading to a period where the payments made were too high. As others have suggested, her contractual relationship to you is quite separate to anything she receives by way of LHA, which is simply designed to help her meet her liability in part or whole. Although payment is made direct to you doesn't alter the fact the payments are hers.

    Oftentimes, tenants don't receive amounts of LHA to meet their full rent, so have to top-up. Normally, councils recover earlier overpayments at circa £11 per week. If the overpayment is considered to have been caused by fraud (misrepresentation) the rate is usually higher (around £18 pw). However, if the tenant fails to meet the shortfall and rent arrears start accruing they can ask for the amount to be reduced to a lower affordable level to avoid repossesion.

    Not the answer you were hoping for, but councils do have the right to recover from ongoing entitlement as long as they notify the tenant, in the first instance and provide them with an opportunity to challenge the decision.

    Bill Irvine

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    Thanks Bill for taking time to fully explain. If nothing else it justifies my strategy to only rent to working tenants, that's not to say it doesn't work for others.

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