Good evening

One of the most common Housing Costs disputes we encounter involves DWP questioning rental liability despite a valid tenancy agreement and clear evidence of occupation. Too often, decision makers focus on issues such as deposits, utility bills or previous rent payments rather than the central question:

Is there a genuine and enforceable liability to pay rent?

The result is delayed claims, avoidable rent arrears, financial loss for landlords and unnecessary appeals.

Liability is not the same as payment

A tenancy agreement creates a legal obligation to pay rent. The fact that rent has not yet been paid does not mean liability does not exist.

Housing Costs are intended to help claimants meet their rental obligations. Refusing Housing Costs because rent has not already been paid misunderstands the scheme’s purpose. Similarly, a landlord’s willingness to wait for payment while a Universal Credit claim is assessed does not remove the tenant’s liability.

No requirement for a deposit

Many Housing Costs decisions place undue emphasis on the absence of a tenancy deposit. Landlords are not legally required to take a deposit. A landlord may require a deposit, rent in advance, both, or neither.

Many landlords accommodating Universal Credit claimants recognise that tenants may have little or no savings and exercise flexibility accordingly. A tenancy does not become non-commercial simply because no deposit has been paid.

Utility bills and council tax

Members regularly report requests for utility bills and council tax documents that are either irrelevant or simply do not exist. This is particularly common in HMOs and shared accommodation where utilities are included within the rent, council tax remains the landlord’s responsibility, or tenants do not receive separate bills.

The absence of these documents does not determine whether a tenancy is genuine. The starting point remains the tenancy agreement and the legal liability it creates.

What does ‘commercial’ mean?

Commerciality is frequently misunderstood. The issue is not whether a tenancy is structured exactly as a decision maker expects. It is whether there is a genuine landlord and tenant relationship supported by a legally enforceable agreement.

A properly drafted tenancy agreement, occupation of the property and a genuine expectation that rent is payable will often provide the answer.

A tenancy does not cease to be commercial because:

• No deposit has been paid.
• Rent has not yet been paid.
• Utilities are included within the rent.
• The landlord has agreed to wait for payment.

These arrangements are commonplace throughout the housing sector.

Why it matters

The principles of liability and commerciality have been considered extensively in Housing Benefit case law and parliamentary reports over many years. Yet misunderstandings continue to create hardship for tenants, financial loss for landlords and unnecessary work for advisers.

The law does not require decision makers to invent additional tests or evidential hurdles that cannot be found in legislation.

Key message

When Housing Costs are challenged because:

• No deposit was paid.
• Rent has not yet been paid.
• Utilities are included within the rent.
• Council tax remains with the landlord.
• The landlord has agreed to wait for payment.

Ask DWP to identify the legislative provision requiring that evidence. In many cases, no such requirement exists.

Where there is a genuine tenancy and a legally enforceable liability to pay rent, entitlement should be determined by the law and the evidence, not by assumptions about how a tenancy ought to operate.

UC Advice & Advocacy
Supporting landlords, tenants and advisers through the complexities of Universal Credit Housing Costs.