Are you a landlord renting to dss tenants?
Let's discuss DSS insurance or you may call it - landlord insurance for DSS tenants. This page will guide you so you know exactly how to deal with tenants that are unemployed and claim housing benefit.
There are a lot of speculation that DSS tenants are a lot of hassle and not worth taking on as a tenant. But we tend to disagree because DSS tenants are some of the best tenants you can get. The reason being is because the rent is mostly guaranteed by the government.
There are several different types of policies for landlord insurance for housing benefit tenants, which cover certain aspects of your building. One type covers the contents (inside your property) and there is an insurance policy that pays your rent if the property becomes unstable and unlivable.
More on rent guarantee insurance for housing benefit tenants later.
Buildings insurance for landlords with DSS tenants does not include the tenant anywhere on the policy. Because with this cover, it protects your building against fire and subsidence or total loss. Many landlord insurance brokers push you towards buildings insurance because it's the most important one.
Landlord buildings insurance will become part of your overall insurance policy. It will include your contents insurance and rent guarantee insurance if you choose to add this to it as well.
When you are looking at buildings insurance for landlords with DSS tenants you can also see what other policy extras you can buy to cover home emergencies, etc.
Now the contents of the property...
Understanding contents insurance for DSS tenants should be noted because they are a difference. The difference is that your contents insurance policy will cover your belongings, (inside your own property), which you rent out.
If you have an unfurnished flat/s, you can still acquire a landlord contents insurance policy to cover your fixtures and fittings. The policy can also cover white goods and kitchen appliances, which most landlords need cover for.
The tenant will need to take out their own policy to cover their own belongings, which is a totally different policy for landlord insurance for housing benefit tenants.
Now for the rent part...
You need to take the time out to understand rent guarantee insurance as well. Because you need to know how it works and how it protect your business against rent of loss.
The policy won't pay out because your tenant doesn't pay the rent, the policy will only pay out if your property becomes unoccupied. This could be because of fire or some sort of water damage, which makes the property totally uninhabitable.
When it comes to chasing rent, I'm afraid that's down to you because no insurance company will cover that. If the DSS tenants failed to pay you on time, you need to sort that yourself.
Remember that rent guarantee insurance for DSS tenants works when the property is uninhabitable and the tenant needs alternative accommodation and your not getting rental income for that period.
DSS tenants are no different from other sorts of tenants (in terms of a landlord agreements anyway). As you know the only difference is being that they are unemployed and have no means of income, apart from signing on and receiving housing benefit.
Believe it or not, most DSS tenants are actually very aware of when the rent is due, especially tenants with children because it is important to them. They can be exceptional tenants if you find a good one.
In fact, many landlords actually like dealing with DSS and unemployed individuals better than people who are working because the rent is guaranteed, even though there are some drawbacks. After all, in life, you need to take the good with the bad, and when it's good, the money just comes in as regular as clockwork.
The best way to deal with DSS tenants is to have patience and work with them through the housing benefit application. Making sure they have done it the right (if they ask for your assistance that is). They'll look at you as a good landlord and somebody they can come to regarding their rent situation and that's what you want, it really is.
If you have tenants that are drug or alcohol dependent, well... that's another matter but it doesn't mean they're a bad tenant. A good landlord will always listen to the tenants and make sure that most of their needs are fulfilled.
The best-unemployed tenants are the ones who are actually seeking work and the ones who do not take drugs or take alcohol on a regular basis (every day). If you can find one of those, you have found a diamond in the rough. Other good tenants are tenants with families who support children under 5 because once the housing benefit is set up and you're being paid regularly, that's you for a few years.
Usually, young families can't support a full-time job and keep a house going at the same time, but with government support, it's getting better.
Most landlords in London and areas like Birmingham and even a lot of places in Scotland prefer tenants not to be working, just like I said above you, the answer to your question - is it worth having DSS or housing benefit tenants - really depends on your property value and the area your properties are situated in. If you own a block of flats, then the DSS way should be the answer for you but only you will know that.
Then again, if you own properties that are valued over the £200,000 mark, then you may consider a tenant who is working rather than an unemployed person. When a landlord owns properties like these, he or she would be looking for a professional person like a doctor or a nurse or even architect.
So you see, it really does depend on your properties and the value of them and the best one to judge this is you. After all, it's only you who knows your business better than anyone. Landlord insurance covers the building and contents and another thing like guaranteeing your rent and emergency breakdowns like your boiler and central heating systems.
But it doesn't run your business for you.
It may be a good idea to take out a comprehensive landlord insurance policy if you come under this category.
So yes, I would say it is worth having DSS tenants for one and only simple reason - the rent is guaranteed if you find a good tenant to move into the flat/house.
Criminal activity is another story regarding landlords and the tenants renting your homes. Insurance can cover you for serious things like fire and water damage but there are other criminal activities you must be aware of.
I have written an article exclusively for a criminal activity which you can read if you follow this link right here.
It covers things like drug dealing, prostitution and theft of electricity and gas.
If your rental income lets you buy a better landlord insurance policy, you should include malicious damage cover into your policy. You will be looking for a contents insurance policy when you're getting a quote or if you're talking to the insurance company.
If your tenant does cause malicious damage you could take him to court and claim expenses for these damages if the judge allows it.
If the judge sees you have insurance to cover all these damages, he may not award you any costs in court. It is always a good idea to take out buildings and contents insurance together anyway, especially having DSS tenants because you don't know their background and you don't know what situation they'll end up in.
Do you know that some people just rent out houses to steal the contents, yes, just to steal the contents and then move onto another rented property? It's a type of criminal activity that's been going on for years and without a proper contents insurance policy you're snookered if that happens to you, (If).
When you're working with the Department of Social Security it can feel that sometimes like you're talking to a computer or someone that's not human, anyway. The reason for this is because landlords are dealt with a certain way to prevent fraud ( basically, people stealing rent money).
The system is set up to protect you as a landlord and if you are running an honest business you would rather this in place than not have it.
It can feel as if things are taking too long but that's just the way it works I'm afraid. When your rent money starts coming in, you shouldn't have any problems and the payments as it will arrive in your account on a date every single calendar month.
The Department of Social Security are very strict, intelligent and a winning team of individuals so if you have any problems regarding your tenant's rent, just give them a call.
Here's the number: 0800 055 6688 and the website here.
After six or seven weeks or sometimes a bit longer, the Housing Benefit application will be approved on the landlord's side of course. When the Department of Social Security have your bank details and personal information about you as a landlord, you start getting your money on a regular basis.
If your tenant receives the housing benefit payment in and their bank account, you can advise the tenant to set up a differant bank account just for that payment. Once the account is open, they can hand the bank card over to you so they have nothing to do with it. Or they can make a BACS payment to you every month depending on the way you want it to work.
Either way, you get your money without any major problems along the way, but it can take a bit of time if it's a first-time application.
Always have respect for tenants no matter if they're unemployed or working because one day they could be working and stay with you as a landlord longterm, because you treated them fairly. Being kind and respectful in life gets you a lot of respect back and that's been proven many times before. If the rent is due on a certain date and it's late, give them a few days to sort it out and don't be really pushy because you could end up getting nowhere.
Remember DSS landlords and tenants need to bond together and have a special relationship if you want to make things run smoothly. That's the way you should be dealing with any person, on a personal basis.
If you ever have to evict a DSS tenant there are certain procedures that need to take place. The first one is serving notice after you have given them chances to either pay the rent, or get the house or flat in order. Eviction really is the last resort and it can cost money so before you go ahead and start the procedure, just think it over before you do.
There's aways another way to go about it.
You may need to consult a lawyer before you start this action, because you will need to make the tenant aware in the first place that you are serving notice. This will give the tenant time to remove his or her contents from the property and a range of alternative accommodation.
The last thing that you want as a landlord is the tenant claiming squatting rights because that could end up costing you a fortune and you may not get your money back from the tenant or the courts.
Finding a decent DSS insurance policy online is in fact very easy to do and I will show you how to do it right now. There are hundreds of landlords insurance policies available to you and the only difference is price because they are all placed together under the same underwriters.
If you use a comparison website like ours, you can compare many great performing landlord insurance companies in one go and with one simple form, here it is, please give it a go and you'll see how easy it is to use to find the right policy for your business.
How to claim housing benefit
Information on private renting
Landlords advice and information
So there you have it, all the answers you need from one informative article, and remember if you don't find what you want from this page, there are other places you can go. Have a look around the Internet, if you don't find what you're looking for here, because the answer is usually staring you right in the face.
If you need an insurance policy to cover DSS tenants, you can go ahead and use our free comparison tools. This will save you loads of time searching around different landlord insurance companies looking for the same policy, basically.
Go ahead, compare many different insurance companies with the quick and easy form, click on the quote button now.