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Article > How to get paid directly by the Local Authority

Article kindly supplied by John Paul

Branches throughout the North

The biggest problem caused by the LHA Scheme for Landlords, and the main reason why so many Investors choose not to entertain LHA Tenants, is that the Tenant is now being paid the initial payment and Allowance, and they are not passing it on to the Landlord – in other words - they are spending the rent!

Not all LHA Tenants are like this, but the vast majority that we have come across certainly are, and once the Tenant has been paid it takes months if not years to claw back the arrears – if ever!!

A recent survey carried out by the NLA showed that among the 949 Landlords surveyed, they had 12,869 properties let out to LHA Tenants, and the total rent arrears over those properties was £4.229 million.

Is it any wonder then, that Landlords are avoiding LHA Tenants?

BUT, if you can dramatically increase the chances, almost guarantee, that you will get your rent paid directly to you as the Landlord or Letting agent, by the Local Authority, then DSS tenants wouldn’t be such a sore topic and more Landlords would welcome them as a property investment strategy.

The route that we take to ensure we get paid directly by the Local Authority is the vulnerability route. We explain that the Claimant is not capable of looking after their finances, and that there is a severe risk that they would not pass on their rent and therefore their tenancy would be in serious jeopardy.

Difficulty managing their financial affairs – The Vulnerability Route

This is the most common option or route we take to get paid directly by the Local Authority. It is the easiest and most simple to prove. It is classed as “mandatory rules” and the Housing Allowance MUST be paid to the Landlord or Letting Agent if any of the following rules apply:-

• The Local Authority considers that the Claimant is likely to have great difficulty managing their financial affairs
• The Local Authority considers it improbable that the Claimant will pay their rent
• The Claimant has left the previous accommodation with arrears owing to the Landlord or Letting Agent
• The Local Authority had to pay the Landlord/ Letting Agent at any of the Claimant’s previous addresses. (not just the immediate previous address)

Back in April 2008 when the LHA was first rolled out nationally, the Local Authorities did not really understand how the LHA system was supposed to work. We could simply write a letter on behalf of the Tenant explaining that they would like the rent paid direct to the Letting Agent and if not, they would spend the rent. Simple enough, and for a time that was enough evidence.

Then after a few months, guidance started to filter down to the Local Authorities and more stringent policies and procedures were implemented. More evidence was needed to back up the Tenant’s vulnerable status. In reality, audit commissions had gone to the Local Authorities and advised them that what they were doing was not good enough, hence the sudden change in what we had to do.


LHA Expert Advice


Imagine, month after month, having money deposited into your bank account, with almost no chasing the rent and little tenant support—ever. What an easy way to earn a living that would be! You can have that life. I'll show you how.

If you're serious about your property business in 2012 and you have LHA tenants, you will get this report, right now and read the report today!

We spoke to the DWP and they told us the guidance as to what classes a person as vulnerable, the following list is what we look for in a Claimant:-

Medical Condition
We need a letter from their doctor stating what the Tenant’s medical condition is, and that it may affect their ability to pay the rent, or that it will add extra undue stress and pressure on the Tenant. Copies of prescriptions and medication are superb examples of supplementary evidence

If the Claimant has trouble reading and writing, then we would suggest they have a letter written on their behalf confirming their illiteracy, as evidence (Citizens Advice or other similar organisations can do this). If it has been recorded in some way on past claims, then this is also satisfactory evidence.

Inability to speak English

This can be proven by nationality or amount of time in the country. Also if they are taking English lessons or courses at their local college

Leaving care or prison
Any evidence of this would guarantee that you would be paid direct. Don’t forget to put this information in the initial letter to the Council

Debt problems
This is the most common reason that the rent should get paid direct but sometimes the hardest to prove. Most Tenants who have debt problems simply throw away the letters and try and forget about their situation. It is imperative that they have any evidence of debt either in the way of:-

• Correspondence from Debt Recovery companies
• If they have payment plans in place
• County Court Judgements against their name
• Past rent arrears – From a Council or previous Landlord
• Phone bills or utility companies chasing the Tenant for payment
• Any high APR loans that they have (Provincial, Welcome Finance etc - this proves their credit is poor)

Inability to open a Bank account
If the Tenant has left a bank owing money from charges or loans they can go back to the bank and try and open a bank account. Obviously they will be refused. The Tenant must ask for a letter explaining that they can’t open the account and the reasons why. The bank will issue a standard letter.
Take this along with all other evidence to the Local Authority. This should be sufficient proof.

Fleeing Domestic Violence
Most Claimants who are fleeing domestic violence will have support or care workers helping them and any letters or additional information from their support network will get the rent paid direct.

Receipt of Support
If the Tenant is receiving any support from organisations or charities, this can be used as evidence to get the Housing Allowance paid directly to the Landlord or Letting Agent.
In the area where some of our managed properties are, there is a high level of supporting organisations such as Shelter, DISC, Women’s Refuge etc. We deal with them on a daily basis. It is a “win-win” situation for all concerned. The Tenant gets a home, the Organisations help their clients and we fill a previously void property and get paid direct. A letter will be required from the support or care worker stating that the Tenant is in receipt of help from them, and asking the Council to pay the Landlord or Letting Agent direct, as it will put undue stress or pressure on their client.

There is something of a stigma attached to these Organisations that the clients or Tenants are difficult and not worth the trouble. However we have found, in our experience, that most are excellent Tenants and grateful for the home you have provided. We have had Tenants with children from the Women’s Refuge who have treated the property like a palace, and we have also had professionals renting our properties who have caused thousands of pounds worth of damage.

Do not be put off by this type of Tenant. Generally they are decent people who find themselves in difficult circumstances, use it as an opportunity. Speak to your local charities and see if you can work together, think of it in terms of helping those most in need. Obviously this will only work if both sides feel comfortable and the properties are in a decent state of repair.

The more evidence you can gather, the better. Do not rely on just one piece of evidence. Submit as much evidence as possible, build up the strongest case you can. Unfortunatley the discretion to pay the Landlord or Letting Agent direct will vary from Council to Council. We have had various Councils pay us direct very easily, but others have been more difficult to convince. However, once a rapport has been built up then the standard, or amount, of evidence required by each Council will be consistent and you will have more success in dealing with the Councils

Please also note that some Councils will not accept certain evidence. The LHA system is still open to interpretation, frustratingly, and what will work for one Council might not work for others.


John Paul



John has written a superb e-book detailing all his articles plus many more tips and tricks with regard to LHA. If you have DSS tenants and have had any sort of trouble with the councils or tenants then this is a must for you. He writes about things such as, Overpayments, Getting paid direct, getting paid after 14 days, Changing from old system to new, Discretionary housing payment, Tenant getting paid on two properties and many other topics

The book can be downloaded HERE


LHA Expert Advice


Imagine, month after month, having money deposited into your bank account, with almost no chasing the rent and little tenant support—ever. What an easy way to earn a living that would be! You can have that life. I'll show you how.

If you're serious about your property business in 2012 and you have LHA tenants, you will get this report, right now and read the report today!

John Paul

About the Author
John Paul is a portfolio landlord in the North East and founder of the Castledene Group of letting agents. The business is a member of ARLA, NALS, PI insurance and subscribes to the Property Ombudsman Code of Practice. Offices are located in Seaham, Easington, Bishop Auckland, South Shields. Halifax, Leeds, Manchester and Belfast. Both John Paul and the The Castledene Group have earned an enviable reputation of being leading experts in the management and letting of residential property to benefits claimants in receipt of Local Housing Allowance "LHA".



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