Before anyone gets firmly on my tits about this, let me just clarify, this is a follow on article from The Positives Of DSS Tenants. So please, no angry hippies or DSS tenants start protesting, this is just a simple flip of the coin.
But I must confess, this list is longer than the pro-DSS tenants’ article! My bad.
1. DSS Tenants have financial difficulties
Whatever the case may be, whether we’re talking about genuinely sincere and deserving claimants, or piss-taking parasites that prefer to leech off the Government than make a real effort of climbing out of the system, all DSS tenants are shackled by financial restraints. If they weren’t, they wouldn’t be claimants. That instantly makes them ‘high-risk’
Being a landlord is about managing risk, but more importantly, minimizing risk. And since this is a business based on cash, we need to do whatever we can to keep the cash flowing, and that’s easier to do when you’re dealing with tenants that don’t have financial restraints. But for a better example, we can use banks and their policy for loaning. Would a bank give a loan to someone on DSS? Very unlikely. Why? Because it’s unlikely they’ll have the means to make the repayments.
Why should landlords think any differently than banks? They really shouldn’t. Fundamentally, we’re all talking about exchanging commodities.
2. Landlords no longer receive rent directly
At one time, DSS tenants were sought after by Landlords because the council would pay the rent directly to the Landlord. Unfortunately, that changed a few years ago, consequently tenants now directly receive rent. The change occurred to encourage the tenants to become more responsible with money.
Historically, many DSS tenants caused a lot of anti-social problems for Landlords, but we tolerated it because rent was guaranteed- directly into our pockets. But since tenants have been responsible for their own allowance, there’s been a predictable rise in tenants failing to pass on the rent, and presumably spending the money on other things.
The only real security and compelling reason landlords had to accept DSS tenants is no longer there.
3. DSS tenants need to cover a shortfall
DSS tenants will typically need to cover a shortfall each month. For example, if the tenant’s rent is £500pcm, they may receive an allowance of £400 per month. In that case, the tenant will have to cover a shortfall of £100. Bearing in mind, a lot of DSS tenants aren’t working, so it’s important to recognise that the money coming in won’t necessarily be enough.
4. Difficult to get Landlord Rental Insurance
Rental insurance is always a useful policy to have in place, especially if you’re not 100% sure of your tenants credibility.
If your tenant fails to pay rent, your rental insurance company will cover the costs. However, many insurance companies won’t insure your rent if you have a DSS tenant. And if they’re willing to, they may ask for a higher premium than a private tenant.
If insurers are refusing to insure DSS tenants, or demand a higher premium to do so, you kind of have to put the dots together and realise that their figures show high claims when DSS tenants are involved. If that wasn’t the case, they’d happily insure.
These insurance companies aren’t fools, so it’s safe to follow their lead.
5. The Council are useless
I’ve already raged about how useless the council are when problems occur with DSS Tenants so I won’t drag on about it too much. Basically, on various occasions throughout my involvement with DSS tenants I’ve needed to contact the council in order to resolve some outstanding issues. It goes without saying that they have been less than helpful and added to my misery. You can read a more in-depth discussion on how the council are rubbish when it comes to providing Landlords with support.
6. Even Letting Agents refuse to deal with DSS tenants
A letting agents job is to find suitable tenants for their landlords’ as quickly as possible. If they don’t find tenants, they don’t get paid, it’s that simple. So it must say something about DSS tenants if more and more letting agents refuse to deal with them.
When a letting agent prolongs filling in vacant properties by denying a certain type of tenant, alarm bells should ring. I’m sure letting agents have dealt with DSS tenants at one point, and on the back of their experiences, they’re now refusing…
7. Claimant allowances can randomly change
I’ve been in the situation where my DSS tenant’s allowance entitlement randomly changed overnight. I didn’t get any warning from the local housing association, no notifications, just an unexpected phonecall from my tenant informing me rent would be short this coming month because their allowance had been slashed, and there was nothing they could do about it.
For several months she was receiving £400pcm, the next month it had been slashed down to £300 for some reason that will never be disclosed to me.
You’d think the landlord would be entitled to a warning from the council, but apparently discussing their clients’ personal finances is a breach of data protection regulations. Do me a favour, seriously! Meanwhile. I’m left with a tenant that can’t afford the rent.
Anyone else got anything to add? If so, blurt your stuff…