new exceptionally high quality shared housing scheme for high complex needs - advice on LHA rent changes and HB entitlement

Hi

A private landlord has invested heavily in developing a beautiful shared housing scheme specially adapted for adults with high complex needs, severe physical and learning disabilities.  6 bedrooms all en suite with wet rooms, shared living all 24 hour care packages funded by the local authority, waking and sleep in care staff funded as part of these packages.

The accommodation is highly rated and in demand from the local authority due to its exceptionally high quality and the comprehensive adaptations made.  The housing management costs are projected to be very high due to the tenants physical and behavioural needs.

All tenants are on middle or high rate DLA care and mobility and all residents have come from residential care.

The landlord set up fixed term assured shorthold tenancies at the start of this year with a rent equal to 1 bed LHA to ensure affordability for severely disabled people in the borough and improve access to suitably adapted shared supported housing by adult social care team. 

However the landlord has only just been made aware that due to changes in LHA all of the residents are entitled to a 2 bed LHA rate and the landlord has lost potential rental return of £19000 pa at LHA rates which is a significant loss to swallow especially because of the large sum invested in the adaptations.

As the tenancies have only been running 2 months do you think HB would accept a rental increase from LHA 1 bed rate to LHA 2 bed rate and be willing to amend rent charge and HB entitlements so soon?

The move would be fully supported by tenants/ families/ care managers/ appointees best interests etc due to the fact this is a highly co-operative and respected landlord who works well with the LA to meet local needs and stepped in when the LA needed it to enable people moving from local authority residential care to continue to live together in a shared housing environment. The accommodation would still offer excellent value for money at a 2 bed rental rate.

I would appreciate your views on whether you think this could be achievable

The problem you have is that your clients met the criteria from April 2011, or whenever they moved in if later, but the maximum rent for LHA purposes has been set based upon the exisisting rent which is lower than the LHA 2 bedroomed rate.

A rent increase would not allow the Maximum rent for LHA purposes to be increased until the anniversary date. (See DWP guidance below).

There is no problem with new tenants receiving the two bedroomed rate and I don’t see a problem with the landlord increasing the rent for each tenant just before their anniversary date to ensure they maximise the HB next year but I don’t think much can be done until then.

Rent increase/decrease
3.100 Rent increases or decreases which occur between anniversary dates will not affect the maximum rent even where, for example, there is a mid-year change in contractual rent. This means that once a maximum rent has been determined it will continue to apply until the next anniversary date unless there a relevant change, see paragraph 3.050.
HB and HB (SPC) reg 13C(2)(d)(i) (ii), (iii)

I would be cautious about it being seen as “taking advantage” of the scheme, have a look at CH/136/2007.

Sandra

I agree with Jane OP - very huge risk around seeing this as taking advantage of the HB scheme - the landlord has set the rents based (presumably) on still getting a return on his investment - simply doubling everyone’s rent because the regulations say that he can would appear to me to be taking advantage of the scheme.  There may be more in the way the scheme is funded than is in your post so happy to have a chat if you wish - number is 01254 58 8804.

Shabir