In 1999 when I got my first buy-to-let property I made the decision that I wasn’t going to let to LHA (Local Housing Allowance) tenants.
The simple reason for this was because, at the time, I heard that if a tenant hadn’t been entitled to any benefits and the rents had been paid to you (the landlord) directly, then you were liable to pay everything back. This made me run a mile and suffice to say I never considered the strategy again.
However, I do now know landlords who run very successful property businesses concentrating on this strategy so I know it works, but it still wasn’t for me; I’ve just concentrated on professional lets.
I had a tenant who moved into a property over 12 months ago. Unfortunately their business succumbed to the economic climate and now they have become LHA tenants. As a result of them receiving the allowance directly, they’ve not been passing it on to me so hence have fallen into arrears.
Now, if you do let to such tenants and if they fall into a minimum of two months’ arrears, you can contact the local authority and ask for the rent to be paid directly to you.
This is exactly what I did.
As soon as the tenant was two months in arrears, I called the local authority and they asked me to provide proof that the tenant was in arrears. I said ‘No problem!’ and they said you’d be surprised at how many landlords don’t have such proof readily available.
I opened up Landlords Property Manager, ran the ‘Tenant Payment History’ report and emailed it over to them along with a copy of the AST.
Here is a sample of the report right here…and it was generated at the touch of a button.
This report and my short email managed to initiate a response within 24 hours where the local authority said that they would now be paying the rent directly to me. Result!
Why am I sharing this report with you?
Well I was just seeking some advice from the NLA’s advice line and they said it was the first time they had heard of someone getting such a fast response from the local authority.
I am certain it was down to the documentation I sent them and the Tenant Payment History report,
which shows exactly how the arrears stand with the tenant.
Feel free to re-use this template. If you’re dealing with LHA tenants who decide not to pass on the rents to you, then I hope it gets you as fast a result as it did for me.
Alternatively you can go here to learn more about how our award winning software can make your life easier and help you to get better organised in 2011. This is a sample of just one of the many one-touch reports it generates…