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£2000 consideration fee for tenant paid by Housing Department - can DHP help? 

Prisca
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benefits section (training & accuracy) Bristol city council

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Joined: 20 August 2015

Hi
The owner of a block of 25 self contained flats has been in discussions with out Housing department.

The owner and Housing are in negotiations to see if the owner would offer 1 year private (assured shorthold) tenancies to customers currently in temp/homeless/B&B accommodation. Housing clearly quite keen to get people into more secure accommodation. the tenancies would be with the owner, (not housing/council ) and come under UC housing costs. (not temp or supported accommodation)

The Owner has asked for a one off £2000 “non refundable charge” from Housing. for the first tenant in each flat they place. Owner says subsequent tenants would not be subject to this £2000 charge.

It is not clear if this £2000 fee would only apply to tenants put forward by Housing or whether he would expect other tenants to also pay this fee.

The charge isnt rent in advance or deposit as it wouldnt be returned to the customer at the end of the tenancy, not would it show as a rent payment. Not sure what its for, apart from being a bit of a sweetener. I am waiting on info from Housing about this.

Housing have asked if the DHP fund could help with the fee. They want to know any legal/regulatory reasons why we would refuse to award a DHP.

I am aware that fees to a tenant are restricted by the Tenant Fees Act..and historically, our LA hasn’t paid tenancy admin fees/charges anyway

If its a fee to the tenant, then i think the charge falls foul of the tenant fee act and therefore no way can DHP be considered to cover it .

If it is a fee to Housing, then could Housing request that money from the tenant and therefore permit the tenant to claim a DHP for it? its still not rent in advance or deposit - so I am struggling to see anything that may make it “eligible” for a DHP.

I have always dealt with DHP app from individua;ls - but is there anything which would permit me to “ringfence” an amount of money for a scheme,like this? as the tenants housing would put in there are currently in temp accommodation, they are all likely to be on HB anyway and eligible as individuals. 

There is no mention of what the actual rents will be, but as they are going to be 12 month assured short-hold tenancies, there is every likelihood that rent in advance/deposits will be required (and as the prospective tenants are currently in temp accommodation, then thats likely to be funded from a DHP request)

I am aware of DHP best practice guidance and this cost doesn’t seem to come under anything in there. So my instinct is saying “no way Jose” but I need to legal explanation/legislation /regulations to either confirm why yes it could be considered or no, it couldn’t.

Can anyone point me in the right direction of such law/reg/legislation please?  Thanks

SamW
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Lambeth Every Pound Counts

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The first major stumbling block that you might find yourself running into is that my understanding is you can only award DHP for shortfalls between the HB/UC Housing Costs Element and the actual rent. If somebody’s HB/UCHCE is the same as the actual rent then you cannot pay any DHP (including for rent in advance/deposit). http://www.legislation.gov.uk/uksi/2001/1167/regulation/4

If there is a shortfall between the UCHCE and the rent then I don’t think there is anything in the regulations that stops you from doing it. I think it could be counted as a ‘housing cost’ and there is no time limit on how long a DHP can be awarded. So say the applicant had a shortfall of £40pw, in theory I don’t think that there is anything in the regulations stopping you from awarding them a £40 DHP for 50 weeks and paying that as a lump sum. Whether it would be possible to pay 100 weeks of £20 is less clear to me as this would involve you paying DHP from a DHP budget that you do not yet have (if that makes sense??). Note that if you do this, there would not be any shortfall left to pay for anything else (e.g. deposit/housing costs/applicant affected by bedroom tax/Non Dep Deductions etc).

So as long as there is a shortfall to ‘spend’ (which will obviously not always be the case and will probably be the exception) I think if you wanted to use the funds in that way I don’t think there is anything in the Regs stopping you. But the regs. not only gives an LA a wide discretion to say yes, but also gives a wide discretion to say no. So if your own opinion, as somebody directly involved in apportioning the DHP funds, is that it would not be an appropriate use of a limited ‘pot’ and that there are more important competing priorities (e.g. preventing people from ending up in temporary accommodation in the first place) then I think you can come back with that, give your reasoning, and if Housing don’t like it they can take it up with somebody higher up the ladder!!!

Just my 2c…whilst I am in an LA I’m not in a revenues and benefits department so I don’t have direct experience of managing DHPs from that perspective.

[ Edited: 10 Jan 2020 at 06:01 pm by SamW ]
Elliot Kent
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Shelter

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I’m reluctant to offer too much of a view on the legalities of this beyond observing that the landlord really is taking the mick as:
(a) the £50,000 he will pocket is a windfall which he could not obtain from tenants found independently because of the Tenant Fees Act
(b) he will actually save money because the council will be doing the job of finding him tenants which he would otherwise have to do himself at his own expense
(c) word travels fast and if this is paid, soon every landlord in Bristol will be refusing to take your cases without a similar payout

I have heard of this happening in London where the housing market is even more warped and broken. I bet if you go and speak to your opposite numbers in some London LAs, somebody will already be sitting on Counsel’s opinion on whether or not this can be met from DHP.

https://www.theguardian.com/society/2019/mar/25/london-councils-pay-landlords-14m-in-incentives-to-house-homeless-people