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My post was prompted by a call from an RLA member this morning. He claimed to have lost 4 months rent due to poor advice he'd received from DWP. Not the first time I've heard that story!
He visited his local Job Centre with his tenant who'd only days before transitioned to Universal Credit. He maintains that he asked how he could access the "housing costs element" and was told, he'd need to wait 3 months before requesting redirection. Unhappy with the advice, he discussed the matter with the tenant and was reassured to hear that he intended to hand over the HC element as soon as it would be paid.
Of course, not all tenants follow through with promises - a bit like DWP in a way. Four months later he's been paid nothing and only now plans to submit a UC 47 (Non-secure) form to have the HC element paid to him. A bit late in the day but progress at long last.
When I asked him about his tenant, he confirmed he'd been receiving LHA up to the point of transition to Universal Credit and had received the award direct from the Council. In those circumstances, DWP should have considered awarding the HC element to the landlord right from the 1st month as DWP introduced new guidance which I produced as a bulletin for our website members in February 2018. Since then, I know from speaking to clients that DWP seems reluctant to process the award in the way the guidance suggests. However, when they produce the bulletin their request is implemented.
Clearly, this is an important issue for landlords specialising in this niche market. You really should be pressing DWP's staff to comply with DWP guidance, and, if they don't, make a Stage 1 complaint to their local District Manager. Each district has both a District and Partnership Manager. Find out who they are and start making contact if this rule is being overlooked.
Over the next few years, 5 million more UC recipients will be added to the caseload. Everyone of your "working-age" tenants will be forced to give up any legacy benefits (including LHA) they have and move to Universal Credit. Make sure you're prepared or you're likely to experience the same unnecessary rental loss.
Check out the RLA for UC courses in your area
The advice provided by the DWP is clearly incorrect, there are standard practises for both a claimant and landlords, namely Alternative Payment Arrangement (APA) or Managed Payments to Landlords. There are also supportive tier factors to support the request.
In this instance the landlord or agent should have completed the non-secure UC47 form on 8 weeks arrears, plus informed the DWP on 4, and claimed for both managed payments and third party deductions to reclaim the rent arrears.
The biggest problem is talking to these bodies as the standard response is now, we can't talk to you about this due to GDPR or no consent.......which can be frustrating when landlords & government bodies should be working closer together.
Many investors/landlords are "scared" of the UC/HB Claimed as they don't fully understand the process. My take is if a UC Claimant stops paying at least you have the fall back position of setting up a managed payment. I haven't got the ability with a tenant who works. S8 need to come out then.
Richard's post succinctly explains the process to follow, which should pose no difficulties to landlords. Later this year, the UC 47's will be replaced by an online system which is much more effective & efficient. I recommended a number of my PRS clients to DWP and they've been assisting with the scheme's development for the past year. Caridon Property (East Croydon) are now securing results, sometimes within minutes of making their APA request. DWP's lead developer has confirmed to me the scheme should be ready for rollout later this year.
For others, as Richard suggests, the old excuses of GDPR and "explicit consent" continue to used for refusing landlord access to information, despite the fact "Explicit Consent" was removed, in relation to APA processing in December 2017. In responding on behalf of some of my clients' complaints, I've had to write to DWP District and Partnership Managers reminding them it's no longer necessary for landlords to secure consent from their "delinquent" tenant; this should never have been the case from day one, but it proved the biggest hurdle in the early stages of APA processing. Nowadays, when a landlord submits a Non-secure UC 47 application, with supporting Tier 1 evidence, this should be accepted by DWP. The one exception to this is where, within 1 week, the tenant produces credible evidence undermining the veracity of the LLs evidence.
On 11th April 2018 DWP also relaxed the rules to allow redirection of the UC "housing costs" element where the tenant or landlord alerted the Work Coach or Account Manager in the local Job Centre to the fact the transitioning tenant was, at the point of transfer, having their LHA paid direct to their landlord, under one of the LHA safeguarding provisions (similar to Tier 1). At the same time, the landlord is entitled to recieve a two week run-on of Housing Benefit (LHA) if the tenant remains in their property.
All of the above changes should represent significant improvement for LLs, but DWP's practice is still patchyand unrelaible, causing landlords to continue losing substantial sums in HCE payments, designed to reduce or extinguish the rental element. On that front, the Independent Case Examiner (ICE) (similar to Ombudsman) has now commenced investigations into a number of Stage 3 complaints I've made on behalf of my retainer clients. We, hopefully, shouldn't have to wait long (less than 6 months) before we start seeing the outcome of these investigations which, if successful, should greatly benefit PRS as they address: DWP's poor admininstration of the scheme; refusal to suspend payment of the HCE pending a decision on the merits of the UC 47; refusal to engage with landlords during the APA process; DWP mistakenly paying tenants AFTER agreeing the APA request. In the case of the latter, I've assisted clients to pursue Small Claims court actions for recovery of the LL's loss. If you've experienced anything like this, I may be able to assist you recover your rental loss.
So, although we've still got a long way to go, things are definitely improving for PRS (in most areas) and should continue to do so.
I have had good and bad experiences with UC
I think a lot comes down to the Tenant fully understanding how the dam thing works
I will not be looking for UC customer in the future
I have seen real hardship with it I call it an Evil System
and its also caused deaths
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.