Should I accept DSS tenants?
Posted: September 29, 2013

As a Landlord of course, it’s your right to say no and when instructed to let out a property we at Property People will not take on tenants who are in receipt of housing benefits unless specifically instructed to do so by you. But simply turning tenants, who are receiving housing benefits, away without a good reason is not necessary if you have stringent tenant referencing and checks in place. Here at Property People we believe such cases should be looked at on a case by case basis.

If you are landlord with one or more properties then at some point, while trying to rent it out, you might have come across requests from tenants receiving housing benefits. The questions everyone asks is,
Should I accept DSS tenants?
Will the tenants on housing benefits pay the rent on time?
Could their benefits suddenly stop after they move in?
Will they look after the property in the same way that the tenants who pay their own rent?
These are all valid questions after all and merit further investigation.

There are many precautions you could undertake to ensure that your property remains tenanted with tenants who would pay the rent on time and look after it. You could for example ask for current and previous landlord’s references. This should ensure you get an accurate picture of how the tenant has treated the previous tenancies. Quiet often landlord’s wonder if the most recent landlord is giving a good reference so that the tenant is able to vacate his property in time. Giving a good reference in turn may just have been an exercise to rid of a problem tenant. Asking for previous 2 landlords’ references can overcome this obstacle.
In short your experience of tenants that receive housing benefits can generally be positive. But this is nothing to do with luck. It’s down to stringent checks and good management of properties with a few good practices such as regular inspections and quick response to deal with tenancy problems.
Let’s look at the pros and cons of tenants with housing benefits.

Pros:

• Councils guarantee rent payments.
• Councils can also provide the security deposit or provide a written deposit guarantee which covers any damages caused by the tenants.
• If as a landlord you advertise “Dss tenants accepted” you will receive a lot of queries and tenants to choose from.
• Less void periods.


Cons

• The council may claim back overpayment of rent directly from the landlords if it turn out the claimant has been over paid.
• Tenants who’s rent is paid by the government may treat the property differently to the tenants who pay their own rent.
• Local housing benefit allowances in London are usually lower than the market rate of or properties available and the tenants are usually left to cover the shortfall.


Things to remember:

• If you take on a dss tenant with a long tenancy history, it should be easier to consider their suitability.
• Give management over to a reliable agent and they will ensure that the property is managed well, rent is received on time, late rental payments are chased and the property is regularly inspected.
• Essentially after everything said and done, tenants receiving housing benefits can be spread across a similar spectrum to that of working, professional tenants. You will get really amazing ones that take great care of your property, abide by the tenancy rules and regulations and pay the rent on time and then you will get the bad ones that will mistreat the property, not pay the rent on time. But just as with professional tenants you can reduce the risk by undertaking stringent checks on prospective tenants.


By Asad Jamil
Branch Manager at Property People. Estate agents in Wimbledon Park