DHP Money Returned Unspent

 

 

DHP REPORT

In a recent website item, I advised that additional monies had been given to local authorities for Discretionary Housing Payments to alleviate the distresses of the new Welfare Reform.  If this money was not spent by the end of the financial year, it would have to be returned to Central Government.

Well, the figures are now in and more than £1million is unspent and therefore had to be returned.  A survey by “Inside Housing” found the following surprising underspends:

Wandsworth – £544,783

Redbridge – £202,044

North Lincolnshire – £196,859

Harrow – £126,994

Barking & Dagenham – £88,665

South Ribble – £66,992

Wokington – £65,595

Two reasons were given in the article for why there were such large under-spends.  Conservative-led Wandsworths’ spokesperson felt it was because the Treasury had over-estimated the impact of welfare reform, but that £1,294,640 had been allocated to needy families. It seems odd that an authority that needed to allocate so much, nevertheless had over half a million to return.

The other reason is perhaps more believable and is from the Policy and Practice Officer of the Chartered Institute of Housing, who believes that Councils had not been as proactive as necessary in advertising the funding that was available. That is perhaps the case, but as additional funding was given very late in the financial year, there was little time to advertise and encourage further claims.

Always encourage tenants who are not in receipt of full benefit to apply for a DHP.  They could waste an hour or two applying and being told “no”. But they just might be successful and take some of the pressure off them.

By Sharon Betton

Sometimes, Consultation works for the landlord!

Milton Keynes Council had planned to introduce city-wide licensing of the private rented sector. However, following a consultation exercise earlier this year, this has now been dropped. A Council Cabinet report stated “there  is a lack of evidence that licensing would address problems of anti-social behaviour and rogue landlords”(Inside Housing 21st March).

Landlords said they would invest elsewhere if this was introduced and the Council realised this would be quite undesirable with the need for private rented accommodation growing all the time. It also found what many private sector landlords who had seen these schemes in operation would also say – “that there is a higher correlation between social rented properties and anti-social behaviour” – this despite properties often being in close proximity to each other and to an office base; there is also an expected level of intervention  in social accommodation.

As reported by “Inside Housing” last year, social landlords were dealing with 300,000 cases of anti-social behaviour a year! If social landlords struggle, when the culture of social housing has always accepted the housing officers’ knock on the door, how much harder is it for a private sector landlord, whose properties may be in different areas with tenants who understand all too well what their “quiet enjoyment” is, even whilst perpetrating noise nuisance themselves?

The result of  this consultation and what it has achieved is a clear indicator that any licensing scheme consultations must be responded to. If Milton Keynes landlords can do this, there is no reason to think that the same result is not achievable elsewhere.

Sharon Betton

STOP PRESS!! Bolton Members Meeting – 01.04.14

Bolton Arena Meeting

Bolton Arena, Arena Approach, Horwich, Bolton BL6 6LB

At our meeting in Bolton on 1st April 2014, Phil Rimmer, the head of the Benefits service, came to update members on the situation in Bolton, following welfare reform.  He spoke fluently and well for nearly an hour  on various topics, and, though speaking  from the Bolton perspective, much of his presentation will also apply to other authorities.

Bad news first -  the dreaded Universal Credit will be introduced from June this year,  with the intention that all local authorities will have introduced it by end of December 2014.  This, despite disarray in the pilot areas with IT systems struggling to cope.  It has also been micro-managed in the pilot areas, with case officers dealing with only 23 cases – hardly representative therefore of what will be the caseload when introduced nationally.  Feeling seems to be that the North West will be one of the first to introduce it, so Bolton is likely to feel the effects very shortly after this starts.

Any good news on Universal Credit?  Well, it appears that the Government have now accepted that the level of direct payments to landlords, should not need to be lowered;  it has averaged 20%, with 80% paid to the tenant.  This is actually a good announcement, as first talk about Universal Credit had been emphatic that this level must drop.  This should re-assure those landlords who want to help the vulnerable, but fear that benefit going direct to the tenant would stay there!

Phil then went on to Discretionary Housing Payments, reminding landlords that money allocated  to cover DHP had to be spent or returned to Government!  Despite the late allocation of funding,
Bolton managed to spend all but £6,000.  Tenants having financial problems should apply for DHP’s, there is no guarantee that they will be awarded more money, but if they don’t ask, they don’t get!

Our next speaker was Paul from Pamties, who supply various measures to deal with condensation and damp.  His passion for the subject was obvious and he gave a very good talk on condensation and mould and the various remedies for it – Extractor fans, Positive Input Ventilation, as well as various paints and coatings that can be used where there are high levels of condensation and mould growth.  I know one new member found this most helpful.

Our final speaker was Martin Nicholls from AMG Financial Solutions Ltd., talking on theserious topic of Wills (everyone should have one) and Power of Attorney.  Again, a good speaker who knew his subject and  was happy to answer questions.  He made several of the audience think of their own Wills, some (like me!) wincing when he said so many people have Wills drawn up 20 years ago and so are out of date.

One of our members, Alastair Niven, then brought up the subject of a licensing scheme consultation in Liverpool, encouraging all members to take part in the consultation andany others that are circulated, to show the strength of feeling against licensing.

An excellent meeting with lots of questions and networking after the meeting ended.  Come along to the next, you might learn something and you’ll meet some very nice people!

Council Tax

A recent  item in 11th March edition of The Times noted that though one of the main reasons for the welfare changes was to encourage the benefit dependent into work, the changes to Council Tax have weakened work incentives for more than 225,000 people.  There’s a shot in the foot if I ever saw one!

19 councils, representing 225,000 people, have increased the taper rate at which council tax support is reduced, going from 20%, to between 25% and 30%.  Combine this with reduced Housing Benefit and increased National Insurance payment and the result is a loss of 93p in the pound at the 25% rate and 97p in the pound at the 30% rate.  The strongest  work ethic in the world may feel that working for 3p in the pound does not seem appealing!

With figures like these, it can be anticipated that some people would refuse to work for this. Even those in agreement that the welfare system should change, may feel some sympathy and even, perhaps, agreement with the tenant on this issue, but a principled stand against work will lead to sanctions and guess who suffers then?  You got it – of course the tenants, but also the landlords who find housing benefit stopped whilst a tenant is sanctioned.  Tenants need to be aware that they must notify the landlord if a sanction is imposed and, as advised in a previous item, IMMEDIATELY put in a housing benefit claim on the basis that he has nil income.  This may mean his rent is paid, if nothing else and that you don’t suffer.

Call for quicker eviction process.

Landlord Assist,  the evictions specialists, are calling on the Government for a speedier eviction process.  Good tenants should be protected by the law from bad landlord practice,  but all too often it seems to act as much in favour of the bad tenant  as the good.

A section 21 is the means by  which many landlords choose to use to end a tenancy at the expiry of the fixed term, rather than use a section 8 when grounds exist to end it before.  Why do landlords choose to issue a section 21 with the lengthy minimum of 2 months’ notice,  rather than  the 2 weeks’ notice required by a section 8?  Unfortunately, the answer is the jumping through hoops required to evict an unwanted tenant.  Errors in the paperwork , use of the wrong dates on the notice,  are among the hurdles for the unwary landlord.   One slip could find the case thrown out of Court and when that happens, the process has to start all over again.

The basic procedure for eviction is that a  notice has to be served and at the expiry of which, if the tenant remains a Court must order possession.  There is a choice in notices.   The most straightforward is a Section 21, the accelerated possession procedure as no blame attaches to the tenant whereas a section 8 notice requires one or more grounds for eviction (and therefore attributes blame).  Of  the 17 grounds to choose from, only the first 8 are mandatory grounds, where a Court must order possession, whilst the other 9 are discretionary grounds and a Court must decide that it is reasonable for a landlord to seek possession.  When rent arrears occur, grounds 8,10 and 11 are applicable, though only ground 8 is a mandatory ground.  A landlord is not advised to seek possession solely on a discretionary ground but there is an exception  – ground 14, where there is anti-social behaviour, which does not require any notice period.  Anti-social behaviour is a blight on communities and viewed with concern by local authorities and Government, but to obtain possession, a raft of evidence is required of an on- going situation  with diary enteries, Police reports, warnings given, statements from the neighbours.

Having reached a decision to evict, the puzzle then is which notice to choose.  Landlords want to evict at the earliest opportunity, if the tenant has fallen into arrears or is causing neighbour nuisance.  Landlord Assist are not the only ones asking for a quicker procedure, and this is understandable when one looks at the timescales.   Section 21 is a minimum of 2 months notice and costs £175 for possession proceedings which will take another 4 or 5 weeks – say 14 or so weeks.  A Section 8 is a 2 week notice, depending on the time in the rental period when eviction is decided upon.  However, Court proceedings could take another 10 weeks after the expiry of the notice period, if everything has gone through at the first try.  Again, expect about 14 weeks, though it could be more, depending on the time of year.  Ground 14, the anti-social behaviour ground, requires no notice, so surely this means it will go through very quickly.  It should,  because of its’ effect on other people – but it doesn’t.  The Court will write to the tenant and give 4 weeks to respond.  The Court date then has to be fixed, so again, it could be months before a landlord gains possession, plus the time taken to assemble evidence.

Support  this campaign -  write to local newspapers and M.P.’s.  Speedy eviction will eventually persuade tenants that they cannot stay without paying their rent or behaving themselves.   Penalising the bad tenants also provides hope for the many people desperate for a decent property from a good landlord.  Properties that are blocked with tenants who do not pay their way, disturbing others and damaging properties, help no-one, least of all prospective tenants.

“News” on section 21 notices

A section 21 notice is the preferred method for many landlords when recovering possession as it is the acceleration possession procedure.  It is a requirement of the legal process that  2 full months’  notice must be given.  It cannot be used before the expiry of the fixed term, so no matter how bad the tenant is, he cannot be evicted in less than 6 months unless a ground applies,  but provided the paperwork is correct, there should be no argument if it goes to Court – it is a mandatory ground.

When advising landlords with notices,  my advice has always been – 2 full months notice should be given and should follow the tenancy dates.  A monthly tenancy beginning on 1st of the month and expiring on the last day of the month, must cover 2 x 1st of the month.  A tenancy period starting on 1st March would need the notice to be issued before the end of February,  with the 2 months’ notice ending on 30th April.  If the decision to evict is made on 2nd March, the notice would end 31st May.  The dates are always confusing and made more so by there being 2 forms of the section 21 notice – s.21(1)(b) which is issued during the fixed term tenancy and s.21(4)(a) which is used when the tenancy has become a statutory periodic tenancy. The ruling was the same for both, 2 full months’ notice,  with the correct notice for fixed term or statutory periodic notice.

Spencer v Taylor 2013, a recent appeal court decision, may be changing that.  Landlords that issued a s.21 (1)(b)notice at the start of the tenancy would be advised to issue a s.21(4)(a) if the tenancy ran on as a statutory periodic tenancy.  In Spencer v. Taylor, the appeal court judge ruled that a s21(1)(b) is the only notice that is required if issued during the fixed term – ie at the beginning and stands even when the tenancy has lapsed into a periodic tenancy.

This interpretation is surprising as it seems to go against the principle which prompted the introduction of the legislation, in 1989. Whilst it is understandable that a landlord wishes to safeguard himself by issuing a 6 month tenancy and a notice at the beginning, if the tenancy has run well and it converts to a statutory periodic tenancy, it seems hardly fair to say after, say 3 years, that the landlord wants to evict on the basis of the original notice – which would allow him to go to Court immediately, as the tenant has had 3 years notice!

Should you use this as your guide when issuing tenancies and notices?

  1. this ruling could be overturned by the Supreme Court;
  2. You may have been lucky and managed to get possession using a fixed term notice when the tenancy became periodic, but there are courts who will not accept what they believe is an incorrect notice -  It takes  time for the higher level judgements to filter down to lower level courts.
  3. The context is different, but in the recent Marino v Superstrike case, it was made clear that a statutory periodic became a new tenancy, not a continuation of the original tenancy.  In these circumstances, surely the same applies – a new tenancy needs a new notice.

Continue to use both notices and you should get possession.  Try to use just one and you may not.

Why licensing was necessary in Newham!

I am not a fan of licensing and was appalled when Newham introduced a borough-wide licensing scheme.  However, a story in the March edition of “Landlord and Buy to Let” magazine shows why Newham perhaps felt that licensing was the only answer.

Newham Council officers found a property with 7 adults and 2 children living in overcrowded and dangerous conditions, poor ventilation, the garden resembling a rubbish dump, with 2 refrigerators, a bed base, a chair and other items – an attraction for vermin and a danger to young children.  The landlord of the house in multiple occupation was found guilty of 24 disrepair offences under the Houses in Multiple Occupation Regulations 2006 and was fined £20,500.  He had also committed one offence under the Housing Act 2004, for which he was fined £5,000.   House With £738 court costs and a victim surcharge of £120, the total amount payable by the landlord was £26,358.  Executive Member for Housing and Customer Service said “The gravity of the offences has been rightly reflected in the size of the fine handed out, which is the largest seen by Newham Council in a housing prosecution of this kind”.

He also gives credit to licensing as the means by which this  prosecution took place.  Perhaps,  in this case it was, as it is difficult to imagine anyone allowing their children to live in these conditions unless the parent(s) was extremely vulnerable.  Landlords must be proactive in inspecting properties and making sure that they meet minimum standards, as a recent story in the Bolton News proved that enforcement does not require licensing to be successful.  A landlord had his property inspected in January 2013 and concerns were raised.  An improvement notice was served and when work was not carried out within their timescales, he was prosecuted and fined £4,000, though he was prepared to do the work but was waiting for the landlord to vacate.

The Government have a commitment to raising standards and there will be more of these cases being reported.  Penalties will get harsher, so do what is necessary to keep yourselves within the law and the tenants safe.

Sanctions for Working Tenants

Are you a landlord who only takes working tenants?  Do you think this protects you from the perils of Universal Credit and the possibility of sanctions?  It seems you need to think again!  Over 1 million people are currently in work but also dependent on housing benefit to meet their housing costs.

At the present time, only out-of-work benefits (ie job-seekers allowance or employment support allowance) are sanctioned if a penalty is imposed and landlords have been lobbying the Government to make the housing element entirely exempt from sanctions.  In vain, it appears, as the Department of Work and Pensions has confirmed to “Inside Housing” (28th February) that where a tenant is working less than 35 hours a week at minimum wage (when JSA or ESA are not payable), the housing element of Universal Credit can be sanctioned.

This is a worrying development.  Any one of the over a million in work but needing benefit could find themselves sanctioned for not completing enough job applications, or not providing sufficient evidence of active job seeking. The result will be increasing arrears.  Landlords cannot be expected to tolerate this, which will lead to a rising eviction rate and quite possibly, homelessness.

In the year 1st October 2012 to 30th September 2013, 897,690 sanctions were imposed; available as a penalty since jobseeker’s allowance was introduced in 1996, this is the highest number of sanctions issued in a single year since then.  5.11% of all jobseeker’s allowance claimants had sanctions issued against them in the year to 30th September 2013.  There appears to be an acceleration in the rate of sanctioning in the second half of 2013 as 6% of all jobseeker’s allowance claimants were sanctioned between 1st July and 30th September 2013.  Sanctions are not a short-term measure; the first would be for 4 weeks, but this increases incrementally for repeated offences.  A sanction for 3 years seems unbelievable, but it is a possibility.

I know no landlord wants to evict good tenants, but you need to be vigilant – if a tenant starts to fall into arrears, you need to take action.  The advice for when a tenant who is fully benefit dependent is that if a sanction is imposed, put in an immediate claim on the basis of “nil income”.  Sadly, that cannot apply when a tenant is working, even if the wage is barely enough to live on.  Keep the lines of communication open and talk to your tenants as soon as a problem appears on the horizon.