Private Landlords and Incentives to House the Homeless
Private landlords are often offered incentives under s25 of the Local Government Act 1988 to offer hand over their properties to the local authorities for them to house their homeless tenants (or those about to become homeless) in the PRS. Such incentives include:
- The authority paying the costs of leases;
- Making small one-off grants (“finders’ fees”) to landlords to encourage them to let dwellings to households owed a homelessness duty;
- Paying rent deposits or indemnities to make sure accommodation is secured for such households;
- Making one-off grant payments which would prevent an eviction;
- Discretionary Housing Payments (DHP) to give financial help to meet a shortage in a person’s eligible rent and the housing authority consider that the claimant is in need of further financial help. Such payments are governed by the Discretionary Housing Payment (Grant) Order 2001
Note: Whilst there is no limit set on the amount of financial help that can be provided, authorities are obliged to act reasonably and in accordance with their fiduciary duty to local tax and rent payers.
By signing an extended lease with the council (often 3 or 5 year) landlords will often be exempt from landlord licensing because they hand over management to the LA and are not named as landlords in later tenancy agreements. This position of landlord is assumed by the LA’s managing department or agent, with the LA being responsible for finding, vetting and placing tenants and dealing with any later issues.
I also discovered first hand that councils place enormous reliance on agents checking out the standards of the property before they place tenants in the PRS which often translates to properties simply getting a quick coat of paint to deem them acceptable.
Because we had no freeholder for years, landlords did pretty much what they liked. We suspected the involvement of the local council due to the rapid turnover of tenants and the continual dumping of household furnishings.
When I asked my local council which flats were involved (whilst we went through the Right to Manage process) all they did was ask me why should any landlord have to tell anyone else who he/she was sub-letting to, private or otherwise? They also quoted Data Protection!
I later learned that other departments within the council could also be using the block such as the Housing Department Social Services Mental Health Team and the Learning Disabilities Team. I was unable to get a break down on this either because of ‘client led’ databases and again, Data Protection!
So, being kept out of the loop meant that we could not advise against councils placing certain people with certain landlords. We ended up housing people with drink, drugs and anti-social behaviour issues with landlords that were totally unfit to be acting as such and who refused to assist when the inevitable happened.
Our over-riding problem has been that our leases don’t contain a key clause which newer leases may contain, which is that of not sub-letting the whole of the flat to a Housing Association, Local Authority, or any other body whose objects include the provision of housing accommodation.
And before anyone suggests a lease variation to accommodate that, I really can’t see our BTL landlords supporting us in a change that would wipe out their income!