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In the past I’ve been very open about my feelings on housing DSS tenants – I don’t like doing it.
Obviously I’m not the only one either, because the amount of “DSS NOT ACCEPTED” disclaimers popping up seem to be increasing by the day. And with landlords being spoiled for choice with the huge demand for rental properties – it’s a renters market after all – DSS tenants will most likely be left at the back of the pile.
Initially, I really didn’t have a problem with accepting DSS tenants, but as I got more familiar with the system, I realised that the government has implemented a joke of a system which makes life difficult for both landlords and deserving social tenants. It’s infuriating. The system seems to encourage rogue activity.
No! I don’t have an issue with DSS tenants themselves, my gripe is with the system being as robust as a wet paper bag, and comically unfair! If you’re interested in watching a grown man weep, you can read more about my trials and tribulations over at my The Council Make It Impossible For DSS Tenants & Landlords blog post.
That said, I can understand why taking on DSS tenants may seem extremely tempting to some, especially from an empathetic point of view. So, for once, I’m going to refrain from ranting and raving about how much the Housing Benefit system sucks royal donkey anal slosh, but instead, share my top tips for [the few] landlords that are willing to take on social tenants and deal with the system.
1) Find out what the payment arrangements are
I’ve noticed that a lot of the time DSS tenants don’t actually know how the system works, so more often than not, they fabricate the truth on the fly. I advise always asking the following questions:
- Will your entire rent be covered, or will there be a shortfall you will need to cover?
- By which method will rent be paid to me?
- I want the rent every month, on the 1st. Is that possible? On what date will I receive the rent?
The tenant probably won’t know the answer to all those questions because it’s down to the local council, but it’s always interesting to know their answers. Usually, the answers are very telling in regards to what kind of individual you’re dealing with.
2) Is there a shortfall? If so, can your tenant realistically cover it?
I’m not certain, but I’m pretty sure the vast majority of those receiving Housing Benefit will need to cover a shortfall. For example, their rent may be £500 per month, but they may receive £400 in housing allowance per month, therefore they’ll be expected to cover the £100 deficit out of their own pocket. I’ve yet to come across a DSS tenant that hasn’t had to cover a shortfall.
Make sure you find out how much shortfall they have to cover, and whether they can afford it.
3) The tenant’s rental history
Everyone has a history, and many DSS tenants have rental history. Find out where they lived before, and why they’re moving from their previous accommodation.
It’s always good when DSS tenants have previous landlords because it allows for references. In fact, I personally wouldn’t feel comfortable taking on any tenant that doesn’t have a rental history – I find them extremely telling. Specific questions to ask previous landlords, to name a few:
- Did you have any problems from them?
- Did they treat the property well?
- Did everything run smoothly with the payments? Were there any delays?
4) Understand what you’re signing up to
I advise anyone who is taking on DSS tenants to be completely familiar with the setup. I made a vital mistake of taking on a DSS tenant without doing any research. As a naïve landlord, when the concept of a DSS tenant was first introduced to me, all I kept thinking was, “this sounds like guaranteed rent!” – of course, that’s how it was being sold to me [by a cowboy letting agent].
“guaranteed rent” couldn’t be further from the truth.
A previous DSS tenant of mine received £600 per month for her housing allowance, whilst the rent was £700, which meant she had to cover a £100 shortfall.
The council doesn’t actually pay the landlords on a PCM (per calendar month) basis, they pay every 30 days! That’s extremely awkward because NO normal landlord charges on a per day basis, consequently keeping on top of payments can get tricky. You’ll find yourself collecting 2 payments every month on different dates. It doesn’t sound complicated, but trust me, it soon does.
Anyways, perhaps you can deal with it, but my point is, make sure you’re aware of what you’re dealing with.
5) Council tax
If you take on a DSS tenant, make sure you inform the local council tax office. In fact, you should do that when you take on any new tenant.
SILLY ME, I assumed that the social housing department communicates with the local tax office since they are operated by the same local council, and both departments deal with housing, but apparently not.
When I had a DSS tenant move in, I got billed for the council tax, which was actually the responsibility of the tenant to pay. I called up the relevant tax department and said that my DSS tenant is liable to pay that bill, not me. The lady on the other end basically said that I should have declared the new tenant.
Anyways, lesson learned.
6) Don’t get DSS tenants from a Letting Agent
Letting agents notoriously charge a ridiculous amount of money to find tenants for landlords, so in return we should expect high quality tenants.
However, experience has shown that certainly isn’t the case. In the past, I’ve paid letting agents through the nose to find me tenants and they’ve tried to palm me off with social tenants.
Now, I’m not saying there is anything wrong with DSS tenants, but what I am saying is that they’re objectively not “high quality”, and moreover, any landlord can contact their local Housing Benefit Office and get a DSS tenant for FREE. So what’s the point of paying a letting agent 12%-16% of your yearly rental income for the pleasure of doing FUCK ALL?
Letting agents often genuinely take advantage of landlords that don’t know any better. So if you’re using a letting agent, and they offer you a DSS tenant, refuse to pay them for doing you no favours at all!
If you’re happy to accept DSS tenants, my advice is to use a free classified website like Gumtree (the place is running rampant with social tenants) or contact your local housing benefits department.
7) Be warned, the Housing Benefit SUCKS
I know I said I wasn’t going to lose my shit over the Housing Benefit departing sucking (hard), but I’d be remiss if I didn’t make a definitive point about it, just to make this blog post complete.
I feel it’s imperative for every landlord to be aware of how infuriating it can be to deal with these people when things turn sour.
Whenever I had problems with a DSS tenant, I always found myself getting literally no support from the local authorities. They were less than useless. Even when I told them my tenant was committing benefit fraud, they didn’t seem to give a shit. I’ve had so many terrible and disheartening experiences that’s made me lose complete faith in the system.
So be warned, when things turn sour, don’t expect much help from the government. Sure, they’ll try their hardest to house the vulnerable, but there’s no after care for landlords.
Don’t believe me? Here’s more from people over at the thisismoney forums (link removed because thread has been removed from their forum), bitching about the shitty nature of the Social Housing team.
8) Request direct rental payments
Back in the day, when the system was a little more sensible, landlords were able to receive rent directly from the Housing Benefit department. But new procedures have crept in, and now, by default, tenants get paid directly, which means it’s become their responsibility to pass on the rent to the landlord.
I know what you’re thinking, “recipe for disaster”, right?
Right.
It essentially encouraged a whole heap of rent arrears, because many didn’t pay their rent. Who didn’t see that coming a mile off?
However, I believe it’s still possible for landlords to receive rent directly, so I would recommend getting this arranged if possible.
If you do agree to accept a social tenant, the tenant will need to inform the local council, and in return complete certain forms with all the relevant details of the tenancy. In one of the forms, there is a question which asks whether they want the rent paid to them [the tenant] or the landlord.
This is something you will need to discuss with the tenant prior to making any agreements, but it’s reasonable to make that a condition of the tenancy, in my opinion.
9) Permission for landlord to enquire
Similarly to my point above [regarding the recipient of rent payments], in one of the forms, they’ll be an optional tick box, which will give permission for the landlord to enquire about the tenant’s Housing Benefit status. This way the landlord can chase up any problems without relying on the tenant.
I’ve already mentioned how useless the council is at passing on information, so it’s strongly advised for this permission to be granted!
Conclusion
DSS tenants are ultimately like any other tenants, they both come in all shapes and sizes, and there’s a few rotten apples amongst all. However, there are just a few extra “quirks” landlords should be aware of when it comes to DSS and social tenants.
Don’t get me wrong, taking on DSS tenants can be extremely fruitful; I know many landlords that have plenty of positive stories to share. However, I will say one thing though, if the government tightens up their system by offering landlords a better service, there’d be a hell of a lot more people willing to accept social tenants.
So that pretty much covers my top tips for those that want to take on DSS tenants. If anyone has additional tips, please let me know, and I’ll pile it onto the list.
Disclaimer: I'm just a landlord blogger; I'm 100% not qualified to give legal or financial advice. I'm a doofus. Any information I share is my unqualified opinion, and should never be construed as professional legal or financial advice. You should definitely get advice from a qualified professional for any legal or financial matters. For more information, please read my full disclaimer.
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the above was in my local newspaper last week for private rented. Good luck! Don't forget the Tenant Service Authority with their new stuff on laws etc for ALL landlords ad Tenants.