Many landlords, especially when looking for tenancy through an agent, get offered to house a DSS tenant. There’s a lot of controversy when it comes to DSS tenants; many landlords just simply refuse to house them. In my opinion, a few bad apples have given all DSS tenants a bad reputation… but here’s the lowdown…
What is a DSS tenant?
DSS stands for Department of Social Security. It’s basically people that are receiving housing benefits from the council for either being unemployed, single parent etc. Essentially, the local council will give DSS tenants a monthly allowance for living expenses, which should contribute towards rent.
DSS is now DWP (Department for Work and Pensions)
DSS (Department of Social Security) is now officially known as DWP (Department for Work and Pensions). From a landlord’s perspective, it’s essentially the same thing- it’s still people receiving benefits due to financial difficulties (which could be for any number of reasons, including heath related disabilities or academic and social failures).
However, most people are still more familiar with the term DSS. So I’m going to go with that, for the sake of ease and familiarity.
The DSS set-up process:
For a landlord, the setup process for a DSS tenant isn’t much different than taking on a regular private tenant. Most of the work is done “behind the scenes”
The viewing process is as normal; the DSS tenant will typically arrive at the property and take a viewing. If the prospective tenant likes the property, and an agreement is made with the landlord, then a Pre Tenancy Determination form needs to be completed and handed to the tenant’s housing officer. The only extra step required for taking on a DWP / DSS tenant is only that, to fill in a form or two.
The council will then determine the house value and then access the situation of the person requiring the rent and make a rental offer. Once this has been received and accepted on both sides, a regular Tenancy Agreement should be drawn up (the landlord is responsible for this).
At this point, the tenant’s housing officer will typically ask for a copy of the tenany agreement, or at least request to view it, at which point the process of setting up the payments will begin. Each local council operates slightly differently, some allow direct payments to the landlord, while others still pay directly to tenants.
Why landlords don’t want DSS tenants:
There are a lot of reasons why landlords refuse to house DSS tenants, but here are a few of the most common reasons why:
– Some local authorities have a claw-back clause, which the landlord must agree to if the landlord accepts housing-benefit tenants. This basically enables the local authority to claim back from landlord if any over-payments that may have been made to the tenant. i.e. if the authorities discover that the tenant has for example, been falsely/under declaring income or has taken black economy work etc. It will be the landlord’s responsibility to repay money the tenant may have falsely claimed.
– DSS tenants are entitled to a certain amount of allowance per month, which is dependent on individual circumstances. Some DSS tenants rent a property that actually costs more than their monthly allowance, so then there the tenant is required to pay the shortfall. So basically, the landlord could be looking to claim rent from two different sources per month, the council and the tenant. It can get a little confusing some times.
– DSS tenants generally have a bad reputation and that throws a lot of landlords off. A lot of landlords assume that because DSS tenants claim benefits, they must be doing something wrong.
– The landlord is not getting the rent paid by the tenant, the housing benefit are paying (unless there is a shortfall- then both parties are paying). In a lot of situations, it’s not even the DSS tenant that is causing the problems; it is in fact the council. It’s not unheard of for the money transfer to the landlord to go without teething problems to start with. Dealing with the local authorities can be rather tedious to say the least.
– Payments from the council are made in 4-week cycles. A lot of landlords prefer payment on a pcm (per calendar month basis).
– Common problems that landlords experience from DSS tenants are late payments, arrears, and mistreatment of property.
Advantages of housing DSS tenants:
– The council guarantees their tenants allowance payment. Private tenants don’t guarantee payment.
– Letting agents charge a lot of money to find landlords tenants. Going direct to the council for DSS tenants is completely free.
Things to remember:
– Many landlord insurance companies do NOT cover DSS tenants, and if they do, the policy often comes at a premium. Always check the conditions of your policy before accepting a DSS tenant.
– Much like with insurance providers, many mortgage lenders do not allow landlords to let to tenants on Housing Benefit. So again, check the conditions of your policy.
– It’s entirely up to the landlord who stays in his/her property. Often, a lot of letting agents will only offer DSS tenants; landlords shouldn’t feel pressured by the letting agent. A landlord has the right to stipulate that they only want private tenants.
– If a letting agent finds a DSS tenant, the landlord is entitled to meet the tenant before agreement to providing tenancy. Needless to say, it’s always a good idea for the landlord to meet the tenant, so they can make some decision based on instincts.
– it’s always better to get a DSS tenant with rental history.
– The landlord should always find out how much allowance the DSS is entitled to, so they’re fully aware if the tenant has to cover a shortfall (there is typically ALWAYS a shortfall a DSS tenant is expected to cover).
– Landlords have the option of going full-management with a letting agent. Full-management involves the letting agent handling everything- there is no need for the landlord to make any contact with the tenant.
This can be costly, but the letting agent will collect payments and chase up any problems. If the tenant has any problems, they will contact the agent directly, and then the agent will contact the landlord.
My personal experience and opinion:
I’ve personally given tenancy to DSS tenants in the past, and still am housing one. I’ve had one nightmare and one success story (my current DSS tenant).
I’m not promoting DSS tenants, and I’m definitely not saying that DSS tenants are perfect, but I’m saying DSS tenants are essentially no different than private tenants, besides from the payment set-up. There seems to be an awful myth that implies that private tenant can do no-wrong. At the end of the day, you can get bad private tenants and bad DSS tenants just as easily as you can get good.