This regulation should be abolished as it costing the Government billions of wasted revenue. LHA ruling is that the Housing Benefit money is paid direct and belongs to the tenant and it is then their responsibility to pay the landlord. However, in the last five years i would estimate that as a small business have lost over £30,000 revenue from non-paid rent, from tenants who have been in receipt of their housing benefit have choosen to spend it on non esstentials, recovering the spent money is impossible.
Even more bizarre is that the tenant is allowed under LHA regulation to miss 2 monthly payments, 8 weeks arrears before LHA rules will consider paying the Landlord direct. This envitable leads the tenant into huge rent arrears and leaves the landlord no option but to serve notice and eventually evict the tenant.
It is our experience, and many other landlords we speak to expereince that Housing Benefit officers often mis understand the LHA ruling and mis-manage governments money. We have written on numerous times informing officers that we feel they should safeguard tenants HB and make a direct payment, but they ignore the regulations.
Why does this idea matter?
The LHA regulations has major implications for small letting businesses and landlords, in the long run, if rent isn't received, mortgages won't be paid and banks will repossess properties. Leaving the tenant a couple of hundred quid up but eventually homeless! Its a crazy economical system in which the government is just thowing a way money and allowing businesses to struggle under the strain of non-payment of rent. Imagine going to the dentist, doctor or school, claiming the money from the government, receiving the money and then choosing to spend the money on something else. Its just an absolute waste and morally so wrong. We would all like an extra £500, now and then, to spend on exactly what we like. But for most of us we are not given government money this freely to spend on whatever we choose.
Come on lets change this LHA direct payment ruling now, and save billions, keep letting agents in employment and tenants in homes. Lets use the LHA for what it is intended, the payment of rent direct to landlord. Its a win win situation.