The law was brought in to empower tenants and make them feel part of the buy to let market place and there are many good tenants that are honest and pay the allowance over to the landlords and would have no problem with the rent being paid directly, however, there are still a large number that are not so conscientious. I wrote to Tony McNulty MP at the Department for Work and Pensions at the end of 2008, expressing my concerns at the way the system currently works and it took him nearly 3 months just to acknowledge my letter and then his response was to insist that safeguards were in place to ensure it worked properly. I beg to differ.
An Ealing landlord emailed to say her tenant had started to claim housing benefit but had lied about how much she was receiving and when she was being paid so, after a few months of not receiving her rent, she rang Ealing Housing Benefit direct to find out what was happening. Due to the Data Protection Act, they were unable to pass on any information but, as she was owed the equivalent of 8 weeks rent, she was able to apply to the council to be paid directly which she duly did. However, the tenant used her 30 days to object and, soon after the rent was paid over by the council, she left the flat without notice, leaving 16 bin bags of rubbish behind, a fridge and cupboards full of food and, all this, just before Christmas. To add insult to injury, she invoiced the landlord £5,000 and insisted that her deposit be used as rent, despite the fact that she caused so much damage and the landlord is still in the process of renovating the property.
As the landlord in question quite rightly pointed out to Ealing Council, her tenant had embezzled £2,600 of tax payers’ money and the tax payer loses out on many counts. Their reaction? They just laughed and said it happens all the time. A tenant in receipt of housing benefit does not pass it on, waits for the landlord to apply to the council directly, waits 30 days for their objection to be heard and, as soon as the money is paid directly, they leave without notice. The council recognises that their system is being abused and yet it is not regarded as benefit fraud, but as a civil case between the landlord and tenant.
This tenant was taken to court and the case won, however, she has refused to pay in full, threatening to declare herself bankrupt. Like many, as an educated single woman of 45 who is quite capable of securing a steady job, she is abusing a system that was designed to help the not so well off.
Funnily enough, my next story is also from Ealing. My landlord found the tenant through the Ealing incentive scheme who paid him £3,500 to take the tenant on. The tenant had to pay one month’s rent to move in – no deposit was taken. One month into the tenancy and no more rent was forthcoming, even though he knew it was being paid for by the local housing allowance scheme. The payment of rent was suspended to the tenant who wrote giving her one months notice to reply. If she ignores the letter, however, the landlord does not get any more rent. The arrears to date total £5,360 and Landlord Action are sending out the rent arrears notice today.
A North West London landlord was asked to house a single mum arriving from Nigeria and was told it would be her plus one child, although it was later established that there were four children in the property. The tenant started off well and passed over the rent for a couple of months – then it stopped, building up arrears of around £3,000 which is where it stood when we were contacted by the landlord to evict her as he wanted her out to get a more reliable tenant. She was successfully evicted and, in this case, the money was eventually paid back although it did take a very long time and, unsurprisingly, it put the landlord off letting to housing benefit tenants again. The tenant in question? Well she went on to be re-housed by her local council!
The majority of cases we deal with are pretty standard in that housing benefit tenants are moved into a property, pay up for a couple of months, and then stop paying. The old hands are very clever in that as soon as the problem is brought to the attention of their local council, they vacate the property before it gets to court. This ensures that their name has not been logged anywhere and they are free to move on and be re-housed. It appears that the money is regularly used for drink or drugs, with police raids being common place on the properties. One landlord who was not being paid his rent was aware that his tenant had purchased a large plasma TV screen and a new laptop, despite owing him £1,000 in rent arrears.
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