The other week, by coincidence, I happened to befriend a “Welfare rights officer”. Of all places, we met in a seedy local club located in Essex, where most people smelt of fake tan and looked like tangerines. It was a good night.
We’ve remained in contact; we primarily spend most of our time exchanging erotic pictures of ourselves, but we occasionally discuss her job. For her sins, a large portion of her professional role involves defending/handling legal cases involving DSS tenants that have fallen into arrears. It was only earlier today that she was “defending” a DSS tenant that hasn’t paid rent since last November. Yes, that’s November 2009 (currently Dec 2010).
Do people like that really deserve the right to a “defense”? Apparently so. Before someone tries to rip my throat out with their crusty mitts, let me clarify- when I say “people like that”, I’m referring to DSS Tenants that have fallen into arrears, not DSS tenants in general.
When I found out the specifics of her responsibilities, I immediately jumped onto the issue and laid my cards on the table, “Tenants get away with murder and have way too many rights, especially DSS tenants”
Surprisingly, she agreed and said that i’d be completely shocked and horrified by some of the cases she’s dealt with. Bearing in mind, this was coming from a lady that defends DSS Tenants for a profession! As I started to flood her with questions, she started revealing the details…
Please note, the following is all GENERAL information.
What can landlords do when DSS Tenants fall into arrears?
The obvious answer is taking legal action by going to a small claims court. However, assuming the tenant has been evicted and vacated the property, in most cases, it’s not worth going after the money. Generally, it’s a waste of time, and the rewards will probably make the landlord want to stab himself in the eye.
There’s little point trying to take legal action against DSS Tenants
It’s true, when a DSS tenant falls into arrears, there is very little a landlord can do to recoup the money in any reasonable time frame, unless they have a valid rental loss insurance policy.
The general message I’ve been told is that there’s no point in taking a DSS tenant to court after an eviction has taken place because they usually have no means to pay the owed money. If they have no money, where is the money going to come from?
The only slightly plausible reason to go through the legal avenue would be to try and enforce a CCJ later on, if the tenant’s circumstances happen to change i.e. if they return to work. However, that means keeping tabs on what your ex tenant is doing. Who is seriously going to do that?
Taking a DSS tenant to court costs money
For justice to prevail, the victim (the landlord) has to pay for the privilege. It seems so wrong, doesn’t it?
If the value of a case is £10,000 or less, it should be resolved in a small claims court, which costs approximately £100. What landlords must also remember is that after they have lodged the application and won their case, they would also then need to apply to the court to enforce the decision that the judge has made – this costs a further £35.00.
Assuming you win the case, the fees can be recouped by the losing party. But again, that means the tenant has to pay more money they don’t have. It’s pointless.
If the tenant is ordered to pay back the arrears, when will the landlord see the owed money?
When the tenant attends court (alone or with legal representatives), they will be asked to provide a full breakdown of their income and expenditure. The income will typically be extremely low (why else would they be on benefits?). The document is called a “financial statement”. This basically shows a Judge exactly what the defendant is able to offer as a repayment towards the debt owed.
A Judge will look at the document and determine whether there is any excessive expenditure, and then make a decision as to how much the client can reasonably afford to pay. “Reasonable” appears to be an extremely subjective meaning, because the Judge could easily, and often does, declare £10 per month to be “reasonable”
So, if the landlord is owed 2k in rent, and the ex tenant is ordered to pay £10 per month in order to clear the debt… Well, you do the math. I’m getting a nose bleed just thinking about it.
Essentially, if a tenant is receiving benefits, and all they can reasonably afford to pay is £1 per week, then the Judge will order them to make the payment of £1.
Generally, tenants are unaware that the Judge is able to force a reasonable amount for them to pay, so they try and make a “reasonable” offer, of say, £5-£10 per month.
As long as the ex-tenant is maintaining those payments every month, then the claimant (ex landlord) will not be able to enforce the court order.
Does the court ever force the tenant to pay more than they declared as being their “limit”?
If a financial statement shows that the tenant has more available income than what they offered, then yes, the court may increase the amount. Unfortunately, this works both ways. If the tenant is offering more than what they can realistically afford, based on their financial statement, the judge may reduce the payable amount.
What if the tenant fails to respond to the court hearing notice?
If the tenant/defendant fails to reply to the claim form (including a nil or no offer of repayment) the creditor can request the court to enter judgement in default and ask that the whole debt be paid in full. The Defendant is then given one month to pay the balance in full.
Once a judgement has been entered it is the responsibility of the claimant to collect the payment. If the client fails to pay in accordance with the judgement, the creditor can attempt to enforcement payment (at a further cost of £35.00) to the claimant through the court by:
- 1] a warrant of execution. This allows the County Court Bailiffs to attend the clients property to take and sell goods
- 2] a charging order (if they own a property elsewhere)>
- 3] an attachment of earnings, if and when they go to work
What must be remembered is that the claimant can recover all sums including arrears, costs of court applications, interest etc!
However, if the tenant doesn’t own any valuable items (which they probably won’t), and doesn’t get employment any time soon (in this climate, they probably won’t), then there’s little that can be done.
A lot of the times, even when a DSS tenant falls into arrears, they’re re-housed to a council house. True?
DSS is now and has been for a while called DWP (Department for Work and Pensions). If someone has failed to pay their rent and faces eviction, so long as they remain in the property and do not leave before being officially evicted, and the council do not consider that they have made themselves intentionally homeless, and they are classed as being “vulnerable”, the council have a duty to rehouse them.
So basically, “YES”
There is no moral victory
Ok, so it’s apparent that there’s a strong possibility that the landlord will never get his/her money back, at least not any time soon. The next natural step would be to grab for a “moral” victory, as in trying to get the tenants benefits revoked or crippled, right? Unfortunately, Housing Benefit is completely based on income, and not personal merit. So even after falling into arrears, and being evicted, the tenant will continue receiving their benefits.
Do you feel slightly sick yet?
The system is fucked up!
It wasn’t so bad when landlords were able to receive the tenants benefits directly. However, ever since tenants started receiving their housing benefit directly, the entire system has been ridiculous.
If a DSS tenant falls into 2k worth of arrears, and they can only afford to pay back £5 per month, that’s exactly how much they’ll be forced to pay. And the odds are, that’s how much they’ll be able to afford! So you have to decide, is it worth going through the courts to potentially receive £5 per month? £5 will just about be enough to fill my arteries with a Big Mac meal.
It’s annoying because these people are receiving “housing benefit”- so where is that money going, if not it’s not paying for the roof over their head?Of course, the salt in the wound is really felt when the tenant is entitled to be rehoused.
Bottom line, it doesn’t even seem worthwhile taking a DSS tenant to court if they fall into arrears because at the end of it the landlord will most likely be left feeling hollow and abused, while wondering how the hell the legal system has failed at such epic proportions. Until the law reverts back to it’s former self, where landlords were able to receive the tenants benefits directly, it’s simply safer to accept employed tenants. That way, even if the tenant does fall into arrears, the court can force larger repayments. At least that way the payments can be recouped before the landlord is 6 feet under!
Anyways, that’s just my opinion, based on what my new friend the “Welfare rights officer” told me.
I have no problem with tenants in receivership of benefits, I purely have a problem with those that fall into excessive arrears without reason. But my major gripe is with the current law. I’m not saying I have a solution for the problem, I’m just saying what we have currently isn’t working.
Has anyone successfully claimed rent arrears from a DSS tenant?
Has anyone actually taken a DSS tenant to court for rent arrears? If so, what was the outcome?
I once had a DSS tenant fall 2 months in arrears. Fortunately, I had rental loss insurance, which paid out. After evicting my tenant, she was rehoused by the council!
Does anyone have any questions regarding this issue?
If anyone has any further questions regarding this issue, ask away. I will ask my friend for her professional opinion on the matter.
Nothing above should be perceived as legal advice
Just so we’re clear, i’m not a qualified legal bod. Any legal or financial crap I write about is based on my experience. Always seek the advice of a professional before acting on something that I might say :)
Disclaimer: I'm just a simple landlord blogger; I'm not qualified to give legal or financial advice. Any information I share is my opinion based on my personal experiences as an active landlord, and should never be contrued as legal or professional advice. For more information, please read my full disclaimer.