Looking for DSS landlord insurance for your DSS tenant? We can help and we can also help you understand what this type of cover is and how it protects you as a landlord.
What's all the fuss with DSS tenants and is insurance expensive for DSS tenants? Is it worth taking on a tenant who receives housing benefits. Or should you avoid them completely by finding a more professional person for your letting business?
These are all questions landlords want to know the answer to all over the UK. So I'm going to do my best here and answer every single question the best way I can with my experience as a landlord for the past 8 years.
I have two DSS tenants and to be honest, I've only had problems the past 3 years. That was non-payment of rent and a couple of criminal problems with my tenant.
He smashed my flat up, I knew the tenant well and I have done for a long time. He had a few problems with breaking up with his girlfriend I think. I forgave him and he paid for the damage so I didn't need to claim my insurance or pay for it out of my own pocket.
Now that doesn't mean that you can get away with this sort of behaviour. I explained why this couldn't happen again or I was going to evict him if it happened again. The guy I'm talking about is a genuine guy, that's why I accepted him for a tenant in the first place because I knew him through a family member. I give him a chance and it never happened again and he's working now so he's off the social security benefits.
It's a nationwide fact that DSS tenants are a bit of a handful. But if you want a regular income and you find it hard to get a tenant who is working, a DSS tenant could be your bread and butter. As money is never easy, you always need to work for that, no matter what.
You may think the works done because you purchased the property after working for 15 years maybe more. But the end of the day you still need to look after your flat or house when a tenant is living in.
The good thing about a DSS tenant is that they have financial backing from the government. This comes in the form of their rent payments. Another thing you need to remember is that the government is now in some areas paying the tenant directly. This bypasses the landlords bank account, which I think is stupid, but who am? I am no government.
Another thing is the ability to have a DSS tenant living in your property on a more permanent tenancy. If you have a small family living in the property you may find that some small families find it beneficial to stay on benefits. This could be because a full-time job would mean that they couldn't afford to live property.
When their working they need to pay full rent, council tax and food and utility bills. So it's just not worth it for some people, that's why many young families have no option to stay on social security benefits.
The bad thing for a landlord is that they will have to pay extra insurance premiums to cover a DSS tenant. As there are more risks involved with high claims according to insurance companies. Most insurance companies will not insure you for a DSS tenant because of these risks.
Like any insurance business you'll find someone willing to take your money. That's why there are some insurance companies that do offer DSS landlord insurance. You can find one here.
The premiums are not sky high, but they can more expensive than having a more professional tenant living in your house or flat. It is advised that you take a policy out when you have a DSS tenant. Or any other person for that matter because of the higher risks.
Don’t think for a minute I am saying a person who receives benefits of being a bad person. Or thinking I have a negative attitude, all I'm saying is young people that don't have a job have a different outlook on life. Well most of them anyway.
You may get problems with attitudes from difficult tenants because they don't really care about you. They are more concerned about them and their family and the last thing they want to talk about is money. Or face you when they damage your property like I have experienced in the past.
A person who receives housing benefit may also have a shortfall in their rent payments. You may want £650 every month for your rent but the local council only pays £575 to the tenant. So the tenant will have to come up with the rest of that money their self. If they're not working that can be a big problem for you.
According to articles all over the Internet, local councils do not provide much support for landlords. When you are looking to solve issues like rent and benefit adjustments. They can't tell certain information about tennents because of the data protection act 1988. It's against the law.
So you may find that your rent is short one month without notice and there's nothing you can really do about it. Apart from asking the tenants if they can cover the rent or borrow the money from a family member.
Or apply for a social crisis loan. The crisis loan may not even cover the outstanding balance, so you'll just have to take the good with the bad. This is a problem for landlords when you're renting to DSS tenants I'm afraid.
The ugliest part about DSS tenants is the payment side of things. It can take up to 8 weeks for the housing benefit to be granted. And if someone on benefits has been sanctioned, this could affect housing benefit and obviously affect your income. The other part of the ugly side is the vandalism and malicious damage. Tenants could bring problems through alcohol or drug problems. I'm not saying DSS tenants are all drug users and alcoholics.
But if you've ever seen Benefits Britain there are a large percentage of housing benefit tenants. Landlords who do have problems with alcohol and drugs, watch out and take the proper legal action.
That's why you as a landlord need to do your own groundwork and assess the individual for your tenancy. It's not that hard to do actually. Take them out for breakfast and have a chat with him or her, don't be nosey obviously. You can ask them what situation they're in without being cheeky for prying into the life.
Some landlords get a feeling about this straight away so they can make the decision based on their own judgement. If you do your own marketing for DSS tenants it is better to get to know them.
If for any reason the social security stopped housing benefit payments you may be aware of this. The only way you would know is when you check your bank account and the money is missing.
This is a sticky situation when that happens because you can't instantly evict the tennant. This is because you have a landlord agreement in place and it's a legal binding contract. You can't get out of straight away.
The local council won't pay for rent arrears and trying to get the rent out of your tenant when he or she is not working, well you know the answer to that.
If you avoid estate agents and do all your own groundwork, you'll be a busy person. Since you're not really doing much for your money, (after the hard works done) why don't you visit your tenant every couple of weeks. Just to make sure how their getting on and see if there is anything that needs done. From your perspective you can see what's going on, you can see how they are looking after the place. This is especially important if you have young people living under the tenancy.
Remember it's good to place your tenants needs first. You can't go over there and start demanding or making them feel like it's not their house because you can push them away. If you play it tenant first, you'll make them feel like you're trying to help. Remember genuinely try to help them because it helps you in the long run) and you know what that does, don't you?
It keeps your rent coming in and if there is any late rent payment, they’ll do their best to get the money to you. You'll build trust because they respect you because you respected them first.
Many landlords do use estate agents but they come at a price. If you only have a few properties, (marketing them yourself) you can do some marketing for free. Posting an ad in a local shop window or post a free ad on Gumtree or the yellow paper, anything like that will work.
If you really want a tenancy badly just drive to your local social security office. Ask people who are signing on down there if they need a home. Put some hard work in and you'll get results.
You can get rid of your property quick but it can be a bit dangerous. You don't know these people but if you have a property that needs occupied, this is a sure way of getting it done. I would not recommend that, all I'm saying here is there is a way of getting rid of your flat by using your initiative. And you can do it without going directly to an estate agent and paying exorbitant fees.
As I'm on the subject of DSS landlords insurance, you now know that you will pay more for DSS let insurance. When it comes to the tenant, make that judgement yourself because their not all that bad. They are just people like you and me, and like everything in life, treat people the way you want to be treated.
After you sort out the house benefits application, and you're happy with the tenant. You will receiving your monthly rent. That's your job done.
I've been using DSS tenants for 4 years and have not had any major problems yet, touch wood. The rent income is more secure, I just pay a bit more for my DSS landlord insurance but nothing to talk about.
PIMS - Housing Benefit LHA DSS & Universal Credit.
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