In the past I’ve made it completely transparent that I don’t like taking on DSS tenants. Obviously i’m not the only one either, because the amount of “DSS NOT ACCEPTED” disclaimers seem to be increasing by the day. And with landlords being spoiled for choice with the huge demand for rental properties, DSS tenants will most certainly be left at the back of the pile.
Initially, I really didn’t have a problem with DSS tenants, but as I got more familiar with the system, I realised that the Government have drawn up a ridiculous system which makes life difficult for any landlord that takes on a DSS tenant. No, it’s not the DSS tenants (for the most part), it’s the system that isn’t functioning! You can read more about my irritations over at DSS tenants and the council. Having said that, I can understand why taking on DSS tenants seems extremely tempting, because payment of rent is almost guaranteed. Also, and most importantly, not all DSS tenants are the spawn of satan.
However, this article isn’t going to be about how much the Housing Benefit Office sucks royal donkey anal slosh, it’s going to be about the procedures I would take if I were to take on another DSS tenant (which is unlikely, anyways).
Find out what the payment arrangements are
I’ve noticed that a lot of the times DSS tenants don’t actually know how the system works, so more often than not, they just improvise on the truth just so they come across as clued up. I would ask the following questions:
- 1) Will your entire rent be covered, or will there be a shortfall you will need to cover?
- 2) How will the rent be paid to me?
- 3) 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 Housing Benefit, but it’s always interesting to know their answers. Just by their answers you’ll be able to detect if they’re honest, unsure, or a complete lying bastard. A lot of DSS tenants are so desperate for accommodation they’ll make up anything to make the situation seem peaches and cream.
Can your tenant cover the shortfall?
I’m not certain, but I’m pretty sure most of those receiving Housing Benefit cover a shortfall. For example, their rent maybe £500 per month, but they may receive £400 in benefits per month, so they’ll have £100 to pay out of their own pocket. I haven’t come accross 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.
Find out the tenant’s rental history
Everyone has a history, and a lot of 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 you can obtain good, solid references. In fact, I personally wouldn’t take on a DSS tenant without a previous tenancy reference. Specific questions to ask:
- Did you have any problems from them?
- Did they treat the property well?
- Did everything run smoothly with the payments? Were there any delays?
- Ask anything else you see as being relevant
Thoroughly understand the setup
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 naive landlord, when the concept of a DSS tenant was first served to me; all I kept thinking was, “this is guaranteed rent, easy”. I WAS WRONG. Very wrong. But I personally blame the letting agent, because that’s how they sold it to me.
My previous DSS tenant had a benefit of £600 per month, whilst the rent came to £700, consequently she had a shortfall of £100 to cover.
The Government don’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 becomes an added problem which a landlord just doesn’t need.
Anyways, perhaps you could deal with that circumstance, but my point is, make sure you’re 100% sure of what the situation is.
Inform local council- 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 DSS communicate with the local council tax office because it’s both Government run, 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 responsbility 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.
Don’t get DSS tenants from a Letting Agent
Letting Agents charge a ridiculous amount of money to find landlords tenants; a lot of the times they offer DSS tenants, which in my opinion is bad service. Letting agents piss me off in this respect. IT’S SO FRUSTRATING. Why? Because any landlord can call up the 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?
A lot of the times letting agents 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! Just call up your local Council and get a DSS tenant for free- save yourself a wedge of cash, my friend.
Be warned, the Housing Benefit SUCKS
I know I said I wasn’t going to bitch about how much the Housing Benefit office sucks, but I need to get this final point in, because it’s important. It’s important for every landlord to know how difficult it is dealing with these people when things turn sour.
Whenever I had problems with a DSS tenant, I would call the housing benefit office up to no avail. They were less than useless. Even when I told them my tenant was committing benefit fraud, they didn’t seem to give a shit. The woman on the other end didn’t seem to give a shit. It was terrible, and it made me lose complete faith in the system.
So be warned, when things turn sour; don’t expect much help from the Housing Benefit Office. They’ll try their hardest to home people, but once those people are homed, they pretty much wipe their hands with them.
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.
Request for the rent get sent direct to you, not the tenant
Back in the day, when the law was a little more sensible, landlords were able to receive rent directly from the Housing Benefit. But new laws have crept in, and now tenants get the rent paid direct to them, and then it’s their responsbility to pay the Landlord. This was put into place so tenants can take on responsbility. In theory it sounds ok, but in reality, it’s just ridiculous, and causes rent arrears.
In some cases, if both tenant and landlord come to some kind of agreement, the Housing Benefit may let payments go direct to the Landlord. The tenant may have to make up an excuse e.g. declare that the tenant is completely irresponsible with money. It’s definitely worth a shot.
Permission for landlord to enquire
A DSS tenant will go through a form filling process. In one of the forms, they’ll be a box that needs ticking, which will give permission for the landlord to enquire about the tenant’s Housin Benefit status. This way the Landlord can chase up any problems without relying on the tenant.
I’ve already mentioned how useless the council are at passing on information, so it’s strongly advised for this permission to be granted!
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 aspects landlords should know when taking on a DSS tenant. Don’t get me wrong, taking on DSS tenants can be extremely fruitful; I know a lot of landlords have no problems with taking on DSS tenants.
I will say one thing though, if the Government tightens up their system by offering landlords a better service, they’d be a hell of a lot more people willing to accept DSS tenants.
So that pretty much covers my top tips for those that want to take on DSS tenants. If anyone has additional tips, let me know, and i’ll pile it onto the list.
If anyone has had bad/good experiences with DSS tenants, let me know. I’d love to hear your story.
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.