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February 2006
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Leasing your property to a local authority

Liz Hodgkinson discusses the advantages and the dangers.

An ever-growing number of landlords, frustrated by the complications of the private rented sector, are deciding to lease their properties to a social housing provider such as a local authority

or Housing Association.

 

Such deals are heavily advertised and sound seductive enough. You sign over your property for a period of, typically, three to five years, during which time it is taken completely off your hands.

 

There is no commission to pay, the housing provider finds the tenants and pays you the full market rent – whether or not the place is occupied. It also guarantees to return the property to you redecorated, clean and tidy.


Such is the demand that you may also be offered a golden hello of up to £5000. There are no agents involved, no inventory checks and no deposits to worry about. If a tenant trashes the place, it is the provider’s responsibility to make good the damage.
In fact, when all goes well, it is a wonderful scheme which leaves the landlord completely free of all cares and responsibilities while the rent comes in on the dot every month.

 

But what about when things go wrong, such as when the social housing provider puts in a tenant from hell?


Most of the people housed in this way are considered to be ‘in need’, which means they are vulnerable in some way. And although this does not necessarily mean they will behave badly, there is always an increased risk that they will not turn out to be ideal tenants. And once they are in, it is not so easy to get them out as they are deemed to be ‘housed’.
Here is a case in point. An owner in the building where I live has taken the apparently easy option of leasing his flat to Adur District Council, near Brighton. The first occupants, a family of two adults and a teenager, were absolutely fine and made friends with other residents.

 


The subsequent tenant, a single mother with a toddler who moved in at the beginning of this year, is just the opposite. She screams and shouts at a succession of tattooed young men who apparently live there as well, accusing them of beating her up. She screeches at her toddler and drags him along the corridors. She plays deafening music into the small hours.


Windows have been smashed and police called on at least 3 occasions. Two private tenants have moved out, unable to stand the row, and one owner cannot sell his flat because of the mayhem.


Very many residents, plus the managing agents,
have contacted the council to complain. The council say they are taking ‘action’ against their tenant for a number of breaches of her tenancy but add that the matter is a lengthy process, also confidential, and cannot be discussed with aggrieved occupants. The complaints began several months ago, but the tenant is still firmly in situ.


The property owner has also been contacted, and shrugs, saying there is nothing he can do as the property is now out of his hands.

Is there anything to be done to get such tenants evicted?


I spoke to Dennis Wallis, legal manager of the Notting Hill Housing Group, which currently houses over 3000 people ‘in need’. He makes the following points:

  • In the eyes of the law, a social tenant is a normal tenant who has signed a tenancy agreement, and must abide by its terms in the same way as any other tenant.

  • With social housing, the tenant will always defend any action to evict, as otherwise they could literally be homeless and there would be no further statutory duty to house them. This is why it can be a lengthy process. And where there is a small child, a tenant cannot be put out on the street, however badly he or she behaves.

  • Other reasons for reluctance to evict could mean that there is no other housing available, and the tenant would have to be put into B&B accommodation, which would cost the council twice as much as a flat.

  • In the private sector, many checks are made before potential tenants are allowed into a property. With social housing, the assessment is based purely on need, not as to whether the person is a fine upstanding citizen who will pay the rent on time and look after the property.

  • Such tenants do not have complete security of tenure however, and they can be evicted after six months, but it is difficult to get them out before that.

  • If you are a leaseholder in a block of flats, you must also get permission from your freeholder to sublet in this way. Some leases do not allow it.

  • If a social tenant turns out to be anti-social, you as the leaseholder could be issued with a Section 146 notice by the freeholder, have your lease forfeited, and lose everything. Because reference checks are not carried out on tenants, any property owner should think very carefully before deciding to lease to a social housing provider.

What residents and neighbours can do:


 

1. Call the police and report a breach of the peace.
2. Call the environmental health department which has a statutory duty to prevent noise and can forcibly remove the stereo or issue an injunction.
3. Where there are small children being ill-treated, complain directly to the social services and child protection agencies.
4. Complain directly to the owner or leaseholder of the property, who can take action against the housing provider for breach of contract.
5. In blocks of flats, inform the managing agents and the freeholder, who can issue proceedings for forfeiture of the lease.
6. Complain in writing to the housing provider, and if this has no effect, make a formal complaint by requesting a copy of their Complaints Procedure. Your complaints should be acknowledged within 5 days and a response sent within 10 days. Where a local authority has housed the tenant, you can ask the Chief Executive’s office to look into the matter further.
7. The next step would be to contact the local government Ombudsman. However, the Ombudsman would not begin an investigation until the council has tried its best to resolve the complaint.
8. Never let up, as otherwise the provider will imagine the problem has gone away.
9. Remember, safety in numbers. The more residents you can persuade to complain, the quicker the problem will be addressed.

 

 


   

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