RLA trainer, and Housing Benefits expert, Bill Irvine recently represented a member, enabling them to successfully challenge a massive £28,000 housing benefits overpayment and council tax liability demand.
The claim related to a former tenant who was found to have been claiming benefits fraudulently while residing at another address. The agent’s property had, coincidentally, been turned into a cannabis farm. When all of this was discovered, a year after the situation occurred, the council pursued the landlord on the basis they should have known what was happening.
Bill Irvine argued that any overpayment, arising in these circumstances, was caused entirely by the tenant, and that the landlord should not be liable. The council, after a number of exchanges, conceded that it would revert liability to the ex-tenant saving the landlord £28K and relieving the relatively new business of the burden of repaying this hefty sum.
The agent understands this is quite a common scenario – councils pursuing unfairly the landlord/agent – and has asked the RLA to publicise their story, whilst remaining anonymous. We believe the story is worth telling so that if other landlords and letting agents experience similar problems they’ll realise, help is on hand to assist them challenge such decisions.
The tenant entered the property in 2007, with a small child and was receiving Housing Benefits (HB) from the start of the tenancy.
Throughout the tenancy, routine maintenance and gas safety checks were conducted and to the best of the agencies knowledge, there were no issues of concern relating to tenancy management or Housing Benefit.
Annual Benefits review:
The property is in an area of high deprivation, causing the council to carry out regular HB checks, at least on an annual basis. The tenant concerned was obviously responding to such requests, allowing HB to continue each year. This remained the case until late 2013 when the council stepped in (see below).
Tenant disappears/Issues arise:
The Council sent a letter in November 2013 stating payments of Housing Benefits were stopping immediately. Copies of these letters were sent to the agent. The agent attempted to contact the tenant, explaining they would be visiting the property to discuss circumstances; there was no response.
The landlord and agent attempted to enter the property. The tenant had changed the locks and so the landlord would have to file for possession, or get a locksmith to open the property. The landlord decided to call a locksmith due to repossession costs.
Once inside the property a cannabis factory was discovered and the disappearing tenant issue became clearer. The front room had furniture and dead cannabis plants. The rest of the house had carpets ripped up, waterproof lining installed, and cannabis plants throughout. There was no evidence of anyone living in the property.
The police were contacted immediately. Unfortunately there was not enough evidence and the landlord/agent remained liable for the damages to property. This was around April 2014.
The landlord and agent started refurbishing the property to bring the accommodation back up to a liveable standard.
Nearly a year later, in January 2015, the agent surprisingly received demands for unpaid council tax 2008 to 2013 and the £28K demand for the HB Overpayment.
The Council maintained the property had clearly been empty for most of this period, due to evidence it had elicited from DWP computer records. As the agent had a responsibility to regularly examine the property, it could reasonably have expected to know what was happening. Bill explains that data matching is quite a common way for overpayments to be identified and that it’s quite common practice for councils to take this stance with landlords/agents, due to the existence of “perverse subsidy incentives” allowing councils to secure a 40% bonus on any money recovered.
Fighting back – evidence base
With Bill’s assistance, the Letting Agency challenged the council’s assertions, by pointing to tenancy management records which quite meticulously recorded:
- The various contacts there had been with the tenant right from the start of the tenancy;
- The various responses there had been to repair requests; damage caused by flooding, caused by the tenant;
- The various visits that had been made to the property by staff and contractors alike and the fact that the tenant and her young child had been met and spoken to at each visit; and
- At each visit a report had made about the state of the tenancy; which had always been favourable
- That the tenant had occasionally called into the office to pay shortfalls in rent; and
- There was no evidence of any build-up of unopened mail etc.
Thankfully, the agency had documents of safety certificates from 2013 proving there was an engineer in the property – it wasn’t yet a cannabis factory – and a ‘tenant’ had let them in to conduct inspections.
Also, the letters from the Council, regarding annual review of housing benefit payment changes were considered incredibly important because they provided an evidence that the tenant was, at least accessing the property to return these claims/reviews.
Finally, Bill focused on the ex-tenant’s obligations to both the council and landlord about the intention to vacate the tenancy. This clearly had not happened. He also pointed to the fact, that the fact she had another tenancy elsewhere didn’t disprove the agents’ position that she continued to use their property and there were no red flags to the contrary.
Faced with this evidence, the council finally conceded.