Four tips for dealing with tenants on Universal Credit
Mary-Anne Bowring 07/04/2020
2445
Are Your Tenants on Universal Credit?
Landlords may need to get used to letting to tenants who claim Universal Credit. Many landlords have historically avoided renting to tenants receiving state benefits due to concerns over rent arrears.
Is It Legal to Refuse Tenants on Universal Credit?
While it is not strictly illegal to refuse tenants claiming Universal Credit, it could be viewed as discriminatory if challenged in court. Legal risks may arise, and landlords who have never rented to benefit claimants might now find themselves in that position.
What Should Landlords Do in This Situation?
With nearly one million people applying for Universal Credit due to COVID-19, landlords should consider key actions. Communication and support for tenants are crucial during this time.
Consider Rent Reductions or a Rent Holiday
Landlords may want to consider a rent reduction to match the housing element of Universal Credit. In some cases, offering a rent holiday can help tenants who are struggling financially during this difficult period.
Provide Required Documentation for Universal Credit Applications
If your tenant has applied for Universal Credit due to COVID-19, provide a letter verifying the rental amount, property address, and tenancy commencement date to help them qualify for the housing element of Universal Credit.
Alternative Payment Arrangements (APA) and Support
Landlords should discuss Alternative Payment Arrangements (APA) with tenants to ensure Universal Credit payments are sent directly to them. For tenants in arrears, landlords can also apply for Third-party Deductions to help reduce the arrears.
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Under Offer: This term applies to a property where the landlord is considering an offer but remains on the market. It implies that further offers may still be considered until the landlord formally accepts or declines the current offer.
Let Agreed: This term indicates that a landlord has provisionally agreed to enter into a rental agreement with a prospective tenant, pending additional checks and referencing. It doesn't require the prospective tenant to have paid a holding deposit.
Let: This term signifies an established binding rental agreement between the landlord and tenant.
For both lettings and sales, the guidance addresses additional terms:
New On The Market: This term is used for a property not advertised since its last sale or rental. It should only be used for a brief period.
New Instruction: It applies to a property assigned to an agent for marketing recently, even if it was previously listed with another agent without being sold or rented.
New and Exclusive: This term refers to a property that is either new on the market or a new instruction, exclusively available through a specific agent or portal.
New Method of Sale/Let: This term is used when a property is being marketed for sale or rent using an alternative approach to the original advertisement, such as transitioning to an auction or sealed bid.
Reduced: This term indicates that a property's price has recently been reduced. The reduction should be genuine and comply with the Chartered Trading Standards Institute's guidelines on pricing practices.