A growing number of LHA (Local Housing Allowance) tenants are falling into arrears through no fault of their own, according to tenant referencing specialists FCC Paragon. With a cap on housing benefit payments due to come into effect from April 2011, and a growing fear that rental arrears situations will worsen as a result, FCC Paragon offer advice to landlords on how best to take action.

With high tenant demand and a low supply of properties now coming to the lettings market, Kerry-Anne Dowdell, Credit Management Manager for FCC Paragon believes councils are not doing enough to assist private landlords and their LHA qualifying tenants.

Dowdell said: “Due to how local housing allowance is paid, many LHA tenants can find themselves two to four weeks in rent arrears. Whilst landlords blame tenants, quite often tenants have submitted the relevant paperwork but it is the council who are holding up the process due to protocol.

“The problem we are encountering is that local councils encourage tenants to stay put until a bailiff or possession date comes through, which creates growing tension between tenant and landlord, and as a result we are having to intervene much more in order to resolve issues for our clients.

“Our advice to landlords is to contact your local council as soon as your tenant is in arrears so that the investigation process can get underway.” However, councils will not talk to a landlord about a claim unless the claimant has given written permission, so if a tenant believes the council are holding up the process, landlords need to seek permission from the tenant so that they can then intervene.”

According to Dowdell, most tenants do not want to be in this situation but they are left with little choice, as they have suddenly found themselves in a position where they have to rely on funded support which is beyond their control.

Dowdell concluded: “We have found that building a relationship with both tenant and landlord to offer timely mediation can often be enough to resolve an issue most efficiently and our services have been well received by both landlords and tenants alike.”