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HAP scheme

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  • 05-09-2018 11:13pm
    #1
    marcmc5
    Registered Users Posts: 44 ✭


    Hi I have a tenant in my rental property for a number of years and throughout the tenancy she has been getting rent supplement. She pays a small amount monthly and the bulk of the rent is paid directly to my account monthly as the rent allowance. I’ve had a number of incidences over the years with delayed payment of her portion of the rent and delayed payment of the rental allowance due to late form filling on her part etc. She now tells me the local authority what to change her over from rent supplement to the HAP scheme. Is there any advantages to me as a landlord to going along with this? I know there is the possibility of increased tax relief on mortgage interest but I’ve heard that you need to commit to making the accommodation available for a fixed term and my intention would be to possibly sell in the next year or two. Also are there any restrictions on placed on raising the rent in the HAP scheme other than those already in place in high demand areas in North Dublin?
    Any advice would be great.


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    #2
    davo10
    Closed Accounts Posts: 6,926 ✭✭✭davo10


    Two things to watch out for, HAP is paid a month in arrears, your tenant may have to pay a month herself when changeover occurs. Absolutely insist that rent must continue to be paid a month in advance.

    If you can raise the rent, do it now so that she/council know before HAP begins, what rent is. If in RPZ you can only raise rent within legal limits. Make sure the notice of increase is valid, look it up, do it right.

    The council may inspect your property and insist you on upgrades to, if you cannot afford these, your tenant will not receive HAP and will probably have to leave. If she is a bad tenant, a bit of lateral thinking on your part may mean she has to move on.


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    #3
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    1. The rent is paid in arrears- not in advance.
    2. Any rent increase is limited to 4% per annum- subject to the terms as laid out in the Residential Tenancies Act.
    3. The HAP is paid to you by the council- she pays her portion of the rent to the council- not to you.
    4. If she is late in making her payment to the council- you get paid *nothing* - that is the council stop the HAP altogether. She will have to jump through hoops to get it restarted- and it may or may not be arrears and typically you could have a 2-3 month gap if its stopped.........

    HAP- is a great scheme for councils- there is no risk whatsoever for them- however, its paid in arrears, not advance- and absolutely all the risk is pushed back on the landlord.

    As the tenant has a history of being late with their portion of the rent- this means you know in advance that your rent will be continually stopped and restarted- with gaps and breaks- as she is late with her payment to the council. For good measure- they won't tell you anything whatsoever (on data protection grounds)- normally the first you know that you're not getting your rent any given month- is when it doesn't arrive.

    If she had a good record of payments- and had not been late with her payments in the past- it would be a fairly easy decision to make- however, her history of being late with her portion of the rent- means you are taking an inordinate risk here- however, at the same time- you can't discriminate against her because she is a HAP payment (you should have issued notice of arrears every time she was late- same as a REIT or a large scale landlord will do if a tenant is even a single day late)..............

    You are in for a messy time here............


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    #4
    Arklow10
    Registered Users Posts: 68 ✭✭Arklow10


    My experience of HAP would be in line with comments above.
    HAP is a three way process - tenants pays you an amount monthly, HAP pays you another amount (more significant amount), tenant pays the HAP a small amount also monthly.
    You have no visibility of the tenant paying their small amount to HAP. If the tenant does not pay HAP their small monthly amount, HAP will not pay you. You will have no visibility of this non payment until say 23th of the month in question until HAP writes to you saying that the tenant has not paid them their amount and hence they will not pay you.
    We were unaware of this payment from the tenant to the HAP scheme.

    You have no comfort re a deposit - HAP pay you on the 25th of the month in question, a month in arrears, so security deposit you have obtained at the beginning of the tenancy is basically exhausted.

    You are very likely to have a property inspection from the council. No issue generally with that, only that the regs require a rent book. We do not always have a rent book - as all payments are direct debit so easily traceable.We had to put a rent book (archaic) in place.We only update it when we visit though - tenants record their monthly payment in this - they never do even though we have reminded them. All the other requirements that are inspected re fire blanket, extinguisher, escape plan etc. We would be way above all statutory requirements - for example we would have wired smoke detectors in all rooms etc.


    If we were considering HAP again, we would require a 2 month deposit from the beginning to ensure we have always a one month security deposit.
    So overall more bureaucratic and less security for property owner in my opinion.


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