Seeing a niche in the market regarding LHA, Castledene Property Management set their target market to landlords with DSS tenants and in only 3 years they now manage over 1000 properties, with 900 of their tenants being on LHA. They also get paid direct from the council, on over 97% of those tenants, so what they do certainly works. Here, John shares some of the tips and techniques he uses that make Castledene innovative and successful in what they do.

Local Housing Allowance has been dirty words for nearly four years now, and it really shouldn’t be. The cash flow it creates is superb and providing your purchasing strategy is right, it should easily get us through these dark times for property investors. I think it’s the same with all things new, it can be a little daunting, but with Knowledge, organisation and careful monitoring you can make LHA work for you and reap the “cash flow” rewards available.

As you may know, LHA is open to interpretation and different councils will have varying opinions on how things are to be interpreted. Your job as a landlord or letting agent is to understand the regulations and work with the councils as much as possible. It may be frustrating at times but once a rapport has been built up with the council, things will run more smoothly.

We will start off by going over some of the more basic information. You will be surprised at how many people I've spoken to over the last couple of months who are not aware of the following information;

 

The basics - When does Housing Benefit start?

Generally housing benefit always starts on the Monday after the tenants “date of claim” So there have been many cases where tenants have moved in and the claim has started on a the property on a Tuesday, but the local authority will NOT pay any housing benefit until the following Monday, leaving a shortfall of 6 days that the tenant is expected to pay.

It also benefits the claim if you inform the council tax department of the tenant moving in date and their circumstances. Not only does it stop any invoices being sent to you at a later date, it also helps with the claim.

TIP: If you move a tenant in on a Monday then start the claim for
housing benefit on the same day also.

 

Making a claim

A Landlord can help complete the claim on behalf of the Tenant, but it is the Tenant’s responsibility. The Tenant can ask anyone they wish to help them complete the form, however the council will not discuss the claim with the Landlord, despite the fact that he helped to complete the form – unless – a disclosure letter has been submitted by the Tenant requesting any information to be shared with the Landlord. A simple basic letter can be downloaded from the internet. This letter has stopped many claims in the past being suspended or even declined as we are able to act quickly on any information the council require from the tenant.

TIP: It is NOT the responsibility of the Landlord to make the claim for LHA.

 

How and Where to claim

Out of the 12 Local Authorities that we deal with, 10 of them will allow you to complete the housing allowance claim online, the remaining 2 still insist on paper forms being completed and handed in.

The advantage with completing forms online is that you always have a record of what was sent and when. A receipt of all forms is also given allowing greater control over the claim. Internet claims are also fast tracked and processed quicker than paper claims, although some authorities may deny this.

Never rely on the Tenant to complete forms online, always complete the form online with the Tenant. It not only eliminates the risk of the Council not receiving the claim, but you also become familiar with the claim and circumstances of the Tenant.

If you use the services of a letting agent insist that they complete forms on behalf of the Tenant ONLINE (if it is an option).

TIP: Whether claiming online or on paper - get a submission receipt from the Council so they cannot say they do not have everything they need to process the claim.

 

 

These guidelines may seem basic and obvious, but many of you will have never been told these things. It took me many conversations with various councils to understand why some of my tenants always were in more arrears than I thought, or why my claim seemed to take far too long to be processed.

You must talk to your local authority and find out how they work. It is important to understand their requirements and build up a relationship with them. If you do I guarantee it will make property investing with LHA a whole lot easier.

Regards

John Paul