Housing Benefit Overpayment Query

[Bookworm]

I have a lodger. She get Housing Benefit, which comes to me directly every 4 weeks by cheque.

I have noticed that when HB gets granted and we get notification, it comes with a warning that if the tenant/lodger were to lose their HB, the council would then be coming after us for repayment of the overpayment of benefit.

It came to me last night that this could possibly a very dodgy move on their behalf and wanted to throw it out here for you guys to comment. I mean, surely, the issue is between the benefit claimant and the council?
Why should the landlord be made a party and lose out financially for what is a fraud issue of which he/she may be totally unaware?
I mean, ok, if the tenant moves out and you keep on cashing the cheques, that's different. But if your tenant loses benefit or their circumstances change, and they don't tell you, why on earth should you even be involved in this?
It's going to be hard enough getting the remainder out of the tenant, never mind having to repay weeks or months of HB to the council, then having to go after the tenant yourself for those monies...

Any thoughts? Should it come to this (fingers crossed it doesn't, it nearly did once and that was bad enough), is it something that can be fought?

[callumsgran]

is the hb paid directly to you? if so you are responsible for it, if not the issue is between your lodger and the council IMHO

[Bovvered]

If someone got a loan for a car for instance, it's like the loan company recalling the loan from the car vendor rather than the purchaser - don't make sense to me....

[Bookworm]

Originally Posted by cillitbanger

is the hb paid directly to you? if so you are responsible for it, if not the issue is between your lodger and the council IMHO

Why? Bear with me, playing Devil's advocate here:

I get the payment in good faith, in exchange of which I provide room etc...
Unknown to me, my lodger's circumstances change, for whatever reason. She doesn't inform me, she doesn't inform the council. She is from this point effectively defrauding the council. I'm not.

Why then should I be made responsible for repaying the money? I still have provided the service. I haven't defrauded the local authorities.

It seems to me that the reason they do this is simply because the landlord is a sitting duck. What I'm questioning is the lawfulness of their action.

As I said before, it's a different matter if tenant moves out and landlord keeps on collecting rent, then it's obviously the landlord's responsability, as he's the one committing the fraud.

Bovvered, I like your analogy.

[Faebo]

Hi, my first post!

I have worked in the Housing Benefit environment, assessment etc but not for the last 9 months., moved to another department.

If the Housing benefit is paid directly to the landlord, and for example the claiment (lodger) was not entitled to Housing Benefit, then the Housing Benefit payments would be reclaimed from the landlord via an invoice.

Remember that it would only be the amount that they were not entitled to but, if the claiment hadn't informed HB of the change that reduced the HB it could have been going on for months and amount to hundreds.

It is very differcult to refute that you didn't receive the payments towards the rent hence you cannot really argue against paying back the overpayment of HB,even if it was your lodgers fault for the overpayment.

You as the landlord will then need to re-coup this unpaid rent from your lodger/tenant.

You can obtain permission (data protection form)from your lodger to speak to Housing Benefit regarding the claim but bear in mind they will normally only disclose what is relevant to you ie payment amounts, dates etc.

Hope this helps?

[Bookworm]

Thank you for that. I do understand how the system works, don't get me wrong.

What I question is the lawfulness of it.

It seems to me that the landlord is being made a scapegoat here. He has to go and get the amount from the tenant, but the fraud was perpetuated agaisnt the council, not the landlord. Likewise, the landlord did not defraud the council. The fact that he did receive the payment is irrelevant. Unless he colluded with the tenant, why is he being pursued for it?

Another analogy. Say I get Income support fraudulently. With the money I get, I go shopping at Tesco's. On discovery, would the benefits office say to Tesco: You have to pay the Income support back to us, then retrieve the money from your customer? Of course not, it would be absurd.

The landlord supplies a paid-for service, has entered a commercial contract with the tenant, NOT the local authority. The tenant instructs the LA to pay landlord directly. How can it be legally justified to make the landlord responsible?

Anyone can point me in the right law text, I'd be very very interested.

[callumsgran]

your tenant can get the payments paid direct to her, then give it to you that way you are out of the equation, just an idea!

[Janet-M]

I know someone who claimed for a bed from DSS the giro was made out to the shop , bed purchased etc .Then the claiment was found to of been defrauding the social and had to pay all overpaid benefit back , including the 'bed' money .So I see your point BW but don't know the answer .To me its incase the lodger does one (moves) so they don't lose out they can come after you.I can't see that being lawfull as imo its the lodgers debt/fraud to the council and no one can be held rsponsible for another persons act can they.So doesn't it come under unfair terms etc ?

[Nightmare4banks]

Hi all!

Bookworm,please note and in my view:

1.Do as Cillitbanger suggested by seeing that your lodger has her rent paid directly to her.This way you are "completely" out of the equation.

2.Always remember that your agreement is between your lodger and yourself not the Housing Benefit office and yourself.It is perfectly within your rights to refuse Housing Benefits payments directly to yourself if you wish.

3.If you are paid rent on a weekly basis you are required by law to supply a rent book and sign it upon receipt of the rent.However,if you are paid the rent monthly,there is no legal obligation to supply a rent book - although maybe in your case it may be better because possibly there is shortfall in the rent that has to be paid by your lodger.

4.Make sure that you have a written agreement that clearly shows the amount you charge your lodger.Just in case there is is problem further down the line.

5.Regarding overpayments,you would be persued for any overpayments in the event that your lodger move out of your house and you failed to inform The Housing Benefit office.You would not be liable if your lodger herself had lied or defrauded the Housing Benefit system herself.
The only exception to this is if you knew about the fraud and kept shtum or a party to it.Sorry,Bookworm not meaning to slur you here but being very blunt and to the point!

Anyway,I hope this helps.

If you have any questions,just ask.

[Bookworm]

No slur, and thanks for putting my mind at rest, you confirm what I thought. It totally follows a legal frame: If you're party to fraud, then of course, you have liability, but not if you're the innocent party. Good.

As a matter of interest, where does your knowledge come from? I mean, is there a text I can look up for reference, for example?

[Nightmare4banks]

Hi all!

Bookworm,what is the EXACT text you would like to look up?Please clarify so I may be able to help you further.

If you are referring to the overpayments rules/laws,they were introduced a few years ago and mainly were designed to target owners that have large buildings divided into flats and/or bedsitters which normally have a high turnover of tenants and where the abuse of the old system was rife.I do not know what the exact law is called.

My knowledge in landlord/tenant law stems from being a manager of a private block flats in the past,speaking to landlords about their experiences,personal reading due to my interest in the subject and being involved in arranging mortgages for residential - Buy to Let and Commercial purchases over several years which involves the studying and understanding of tenancies and leases - both residential and commercial.

My final words of advice - NEVER ACCEPT A HOUSING BENEFIT CHEQUE!
Get your lodger to have the payments made to her so you have nothing to worry about.
Anyway,I hope this helps.

Anymore questions,just ask.

[Bookworm]

That will do nicely, thanks. Hopefully, it will never be an issue anyway, as my lodger is very good. But I don't trust my local authority one bit.

[bankoff]

Hi Bookworm

NM4banks is absolutely right here. I work for Estate Agent, we have just been clobbered for £1500 HB repayment on behalf of LL who's tenant was defrauding and none of us knew about it. He did a runner, HB paid direct to Agent, reclaimed from agent or LL as the case may be. This is possibly why no agents want HB tenants any more.

Also these HB tenants tend to be difficult to find when they do this, and you can very rarely get your money back. Think this is why the council try and pay the agent or the LL direct. They know what you may not know - they can claim it back from the recipient.