Local Housing Allowance (LHA) is used to calculate the maximum amount people renting from a private landlord can claim in Housing Benefit or Universal Credit.
If you are a landlord and you have entered into a deregulated private tenancy agreement with a person awarded Housing Benefit, you will be affected by LHA. A deregulated private tenancy agreement is one entered after 1989 and not covered by one of the following exceptions:
- local authority landlords who let to Council tenants
- tenancies with registered social landlords
- protected cases, such as supported housing provided by certain local authorities, social landlords, charities and voluntary organisations
- tenancies which are excluded from current rent restrictions
- tenancies in caravans, houseboats and hostels
- tenancies where the rent officer decides that a substantial part of the rent is for board and attendance, such as hotel accommodation
Tenant responsibilities
The tenant will be responsible for paying their rent to you. In recognition of the risk that some tenants may struggle with the responsibility of paying their rent, safeguards will be put in place. LHA can still be paid directly to you if the Council consider that the tenant is likely to have difficulty managing their own affairs.
The full safeguard policy is available here. To implement any of these safeguards, the Council must have documented evidence. You can download an application for direct payment to your landlord here.
Payment direct to landlords
The Council can choose to pay either a landlord or an agent, where to do so would secure or protect a tenancy agreement.
If the rent is deemed to be at a satisfactory level and a written agreement between you and the tenant reflecting the new rent and terms of the tenancy has been received, payments of LHA can be made directly to you.
Direct payments are conditional on the rent being kept at an affordable level while the tenant is resident at the property. If there is a change of circumstances, such as a rent increase, the Council will review (on a case-by-case basis) whether direct landlord payments should still apply.
Change to a tenant's circumstances
When the Council pays LHA direct to a landlord and their tenant's entitlement to housing benefit changes, the Council may ask you to repay any LHA that has been overpaid.
Therefore, you must inform the Council immediately if your tenant moves out or temporarily moves out. If you are aware of any other change to their circumstances that may affect their entitlement to LHA, advise the Council straight away. Examples of circumstances the Council need to know about are:
- wages increase, decrease or tenant starts or stops work
- income support or jobseeker's allowance starts or stops
- increase or decrease of any other income
- increase or decrease in their capital or savings
- people moving in or out of the property
- the birth of a baby
If you are in doubt whether a change of circumstances will affect your tenants' LHA, contact the Council.
Recovering overpayments
If it is appropriate to recover the overpayment from a landlord, an invoice will be issued that will show the period and amount of overpayment. Arranging the payment of the overpayment is your responsibility and details of how to repay can be found on the invoice.
If you have difficulty repaying the money you can agree repayment by instalments. If you fail to make repayment of overpaid LHA the Council can recover outstanding payments from any future payments of LHA due to be paid to you.
You can find more information at LHADirect and The Financial Services Authority.