With the moratorium being extended on evictions, more and more landlords are looking for ways to guarantee their income – could HAP tenants be the answer? In this guide, we will look at why landlords might consider joining the HAP scheme, what the benefits are and how you, as a landlord, can potentially benefit from it.
Why should landlords choose HAP?
HAP payments are made directly from your local authority at a 99%+ rent rate. This means that under no circumstances will your rent be made late or in part. For some landlords, this is enough in itself, as chasing rent, especially when there is a moratorium on evictions, is the most time-consuming and costly part of a landlord’s job.
Becoming a HAP landlord
HAP Tenants are required to find their own accommodation traditionally, on the private rental market. Once a HAP tenant applies for your property, you (the landlord) must send your local authority certain information.
This information will include the following:
- The full monthly rent total
- Proof that you own the property which you intend to rent
- Excerpts from a bank statement showing that the intended account details are correct. The document should also show that they belong to the named individual who owns the property.
- A certificate showing that the property meets rental compliance standards.
- Documents showing that you are are tax compliant.
- PPSN or TAX number
In a situation where the new tenancy is in an RPZ ( Rent pressure zone), then you, the landlord, are required to issue a written statement to your new tenant explaining how the rent was set under the tenancy of the dwelling and how it was calculated regarding the rent pressure zone.
The local authority will seek a copy of the statement where applicable.
For more information, you should contact your local authority.
Who qualifies for HAP?
In order to qualify for HAP, the tenant must also be eligible for supported housing via their local authority. You, the landlord, will also need to agree to have a HAP tenant.
You, the landlord, must also agree that the local authority pays the rent, and the tenant will make their rent contributions to the same local authority.
Why do landlords not want HAP Payments?
There’s doubt about it; rent allowance or HAP is stigmatised. But it should not be; it’s an excellent opportunity for landlords.
Although legally, a landlord can not discriminate against people on housing contributions. With the housing shortage increasing, many landlords receive 100s of rental applications and, therefore, can easily pick a tenant who is not receiving any housing allowance.
How do HAP payments work?
HAP Payments are made electronically by the local authority at a rate of 99% of the total rent value,
They are made regardless of tenant income and are guaranteed under the HAP scheme, so if a tenant loses their job, becomes ill or is unable to pay – You, the landlord, will still receive your rent.
Payments are made electronically and automatically negate a landlord’s need to chase down tenants or enter any rent repayment agreement.
Disadvantages of the HAP scheme for landlords
There are very few drawbacks to the HAP scheme, especially from a landlord’s perspective. The only notable disadvantage is it’s slightly more onerous in terms of documents, and the landlord will need to provide proof of rental and TAX compliance.
But when you weigh that disadvantage against guaranteed monthly rent payments, for most, it is a worthwhile inconvenience.
Difference between HAP and Social Housing
The main distinction between HAP and Social Housing is how tenants obtain housing.
With social housing, the tenant waits on a list until a property is available.
With HAP, the tenant finds a house within private listings, and then the landlord must agree to that tenant.
Another significant caveat is that for a tenant to be considered for social housing, they must have received a Rent supplement for 18 months or more.
Frequently Asked Questions – Housing Assistance Payment
What if a HAP tenant damages the property?
Besides the rent paid by the local authority, a HAP tenant is the same as any other tenant, and their rights and liabilities should be laid out in the tenancy agreement.
This includes damages caused by the tenant that will likely need to be repaired by the occupant.
Can a HAP Tenant move?
A HAP tenant may be approved to move in exceptional circumstances even if a valid lease exists.
How long is a HAP lease?
Ideally, a HAP Lease should be 24 months or more, but this is on a case-by-case basis and is down to both the tenant and landlord.
Is there TAX relief for HAP Landlords?
YES – since January 2016, property owners can apply for 100% tax relief on their mortgage interest rates as an expense against rental income.
What document do I need to prove ownership of the house?
You must provide one document on the date that you own your property. The document must clearly show the full address, your name and the detail that you own the property.
Property Management Dublin
If you are in the process of a HAP Application with a tenant or are considering taking on HAP tenants – then the team at KPM can help.
KPM Group has helped countless landlords free themselves from managing their portfolios. Trust us to deliver the maximum return on investment while providing quality property management services.
If you would like to speak to us here at KPM about your portfolio, then get in touch today, and a staff member will be happy to help in any way we can.
