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In the February 2011 Issue of Property Investor News
LHA Payment Conflicts
Bill Irvine, specialist in Housing Benefit at HB Advice & Advocacy answers some questions from the editor, Richard Bowser, as to how landlords should deal with Local Authorities in respect to Local Housing Allowance payments.
Q. Bill, many landlords are being deterred from taking on LHA tenants; what has been your experience over the last year or so?
A. Landlords who take the plunge offering tenancies to individuals that rely on Local Housing Allowance to meet part or all of their rent usually do so having weighed the obvious risks, including the chance of not receiving payment, against the potential benefits of perhaps securing a long term tenant.
The risk of not receiving payment because the Council now invariably pays the LHA allowance directly to the tenant is very real. I've come across numerous horror stories of landlords losing out financially, time and time again, because of the past government's political directive. One of the ways of minimising the risk is to only take recognised 'vulnerable' tenants, allowing LHA to be paid direct to the landlord. Another is to seek payment of the initial award direct to the landlord or in an ongoing situation immediately alert the Council when arrears accrue to ensure payment is re-directed to the landlord, even before eight weeks rent is due.
Q. One problem that I have experienced myself is when councils suddenly demand of a landlord that he or she should pay back rental payments received in good faith from their tenant - what is your experience?
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