Common Misconception: Rent Is Guaranteed With DSS Tenants

I’ve heard a lot of people claiming that rent is guaranteed when Housing Benefit (HB) pay rent directly to the landlord on behalf of DSS tenants. It was actually the other day that someone on my blog made that statement, and it’s definitely a popular claim I’ve heard many times. For the record, the lady that made the comment was nice, and this is definitely not a personal attack on her.

From my experience, it’s usually tenants on Housing Benefit (HB) that make the claim to either a) sway landlords into thinking DSS tenants do have their perks b) don’t have enough experience with HB allowance to know any better. Either way, the assumption is completely inaccurate.

I agree, taking on DSS tenants do have their perks, however, saying that “rent is guaranteed” is total bullshit, so people really need to stop thinking/saying it is. It’s not guaranteed at all, and most landlords that have respectable experience with DSS tenants will know that. At first, I also thought that it was guaranteed rent. I don’t quite remember, but I may have even praised about that “guaranteed” shit on my blog in the past, but then I got some actual experience with DSS tenants, and my entire perspective did a u-turn.

This blog post isn’t an intended witch hunt for those receiving HB, this blog post is just a reality check.

The short fall

Firstly, DSS tenants have a shortfall to cover each month, which the tenant is expected to cover on time every month. That shortfall is NOT guaranteed. I’ve had a tenant in the past that had to pay £100 each month to cover her shortfall. It was often late, and frequently required constant chasing. She wasn’t a bad tenant, so eventually always coughed up the doe. But I know of landlords that weren’t even fortunate enough to receive the shortfall at all. The tenants just didn’t care about paying.

Yes, the majority of the rent is paid by Housing Benefit, but I don’t expect to let my house out at a 10% discount each month, otherwise I would have marketed the property with a lower monthly rate.

Don’t get me wrong, it’s definitely a perk to have the majority of rent paid by the council, but it’s definitely not entirely “guaranteed”, which is my point.

Landlords are at the mercy of the council

Secondly, and most importantly, the council have the ability to seize/alter anyone’s benefits at the snap of a finger. And there’s nothing a landlord can do about it.

One day your tenant might be entitled to £700 per month, the next day their circumstances may change and they’ll be entitled to £500 per month, consequently the tenant will have a larger shortfall to cover. This of course brings me back to my first point- there’s no gaurantee the tenant will cover that shortfall on time every month.

And then, naturally, the tenant will say, “there’s been some kind of mistake. Give me a few weeks, I will sort it out with the council”. Soon enough, weeks has passed, and nothing has changed, and your tenant has now fallen into arrears.

The council won’t move quickly to resolve anything (believe me) and they sure as hell won’t talk to the Landlord to explain what is going on, because the personal finances of the tenant has absolutely NOTHING to do with the Landlord.

I’ve even seen cases where tenants were claiming HB fraudulently and as a result their allowance was completely terminated.

So no, regardless of whatever agreement/setup you have with your DSS tenant and the Housing Benefits Department, rent is NEVER guaranteed, and you’d be a fool to think otherwise.

Right, that’s my little rant over. Love and peace all, love and peace!!

Attention! If you're new here, you may want to subscribe to my RSS feed so you're notified of all new blog entries.

Talk / 8 Comments

SN wrote this on 2009-12-29 23:39:17 Landlord, great article. All true! SN 1

sheldon wrote this on 2009-12-30 04:30:04 TRUE! 2

Phil wrote this on 2009-12-30 10:43:40 So true....I had tenants on HB and as I wanted the house back I gave them the required 2 months notice. On the last month they didnt pay the rent and disappeared as they knew the deposit was unlikely to be returned due to the trashed state of the house. The local HB office didnt want to know and said it was down to the tenants to make the payment!! I have to say lesson learnt...... 3

Fiona wrote this on 2010-01-03 11:09:26 How true this is. I started out with a flexible attitude but now I will not rent to HB tenants unless there are exceptional circumstances like a proper disability and they look like long-term tenants. Retired people are great as their circumstances don't change. To have HB as a high percentage of any portfolio could be disastrous - I would say more risky than if they were working tenants. I was recently galled to have to pay back benefit to the council for a tenant who buggered off owing me money!

Another problem I have found is that HB tenants pay the rent and deposit up front but then say they can't pay you until the end of Month 2 as that is what the council pay them. This is nonsense (they are paid at the end of 4 weeks which should be your Month 2 rent) and I do not allow it. If they abandon the property you do not have the 1-month cushion. People have even had the audacity to say to me that they need the money for stuff as they have just moved house! When tenants have this attitude that everyone else should provide for them do you really want them in your property? They will be looking for ways to rip you off, and they will succeed, believe me. Trying to trace people who leave no forwarding address is a nightmare and even if you do find them, getting money out of people who have none, and feel no obligation to go out and earn some, is a waste of time.

The other problem with HB tenants is that they are at home all day messing up your property! Think about it. Working people spend less time there so do less damage. They don't have every other single parent round all the time/scrounging layout boyfriend/unnecessary dogs and cats/in general extra pairs of feet and fingers increasing your wear and tear.

I'm sorry to say some of these things as I know there are some genuine people on HB at certain times in their lives but I'm only speaking from personal experience. In any business you have to make a judgement and sometimes this is based upon generalisations but it's necessary to protect yourself. 4

Sam wrote this on 2010-01-04 22:53:09 The other thing which has happened to us - HB tenants moved out - told council and not us. Payments to us stopped and I could not get the rent! Luckily had the deposit - but as you know the DPS make you jump through hoops for that! 5

Someone wrote this on 2010-01-25 19:12:19 Hi for a start I'd like to give kudos to whoever set up this site, very useful info on here.

Now back to this topic, I don't think landlords should dismiss DSS clients as much instead find out their circumstances i.e. someone who is long term sick/disabled is far more likely to keep up with rent than the usual work-able person on jobseekers (or scum to some people) who have to sign on every few weeks to get their benefits.

I think the lesson that needs learning is that you as a landlord should find out as much about the could be tenant as possible regardless of whether they're working or not. Simply dismissing any DSS client is lunacy.

Now my answer to the question "is rent guaranteed on DSS?", no of course it isn't but that doesn't mean it couldn't be as stable if not more than someone whose working if the circumstances are right. 6

Sam wrote this on 2010-01-25 20:25:19 Yes that is correct. At least with the DPS when the tenant is 8 weeks in arrears then you do get it paid to you 7

kayla wrote this on 2010-02-02 01:53:53 I am on dss and the rent comes to the landlord every first of the month and they pay the total rent no under table stuff. It is guarenteed your best bet is to get a reference from a past landlord from a potential tenant. I live in Westchester ny and the system here is legit. 8