Can Councils recover overpaid LHA from the landlord?
By Alex Caravello
I recently helped a local MKPLA member challenge the attempted recovery of overpaid LHA that had been paid directly to the landlord and I wanted to share his experience.
Most Local Authority Housing Benefit staff will automatically attempt to recover overpaid LHA from the landlord, if the landlord receives direct payment. This is because, until 2006 that was the correct procedure. However, the law changed in 2006 to clarify the position of the landlord and his rights to appeal overpayment recovery.
Since 2006, Councils must consider whether the landlord was aware of their tenant’s situation and whether the landlord colluded with the claimant, or otherwise acted in such a way as to contribute to the period, or amount of overpayment. If not, then the landlord is not responsible for the overpayment and cannot legally be held responsible for the overpayment recovery. In these cases, the Council must recover the overpayment from the claimant, not from the landlord.
For example, if your tenant is unemployed and receives LHA, but then subsequently gets a job that affects their entitlement to LHA without your knowledge, you as the landlord cannot be held responsible for the recovery of any overpayments you received as a result of your tenant’s failure to disclose this information to the Benefits Service.
The Housing Benefit Regulations 2006, Part 13, Section 101(2) states that, where the overpayment arose as a consequence of a misrepresentation, or failure to disclose a material fact by, or on behalf of the claimant, the recovery should take place from the person who misrepresented or failed to disclose that material fact.
You can read more of this Regulation here >> http://www.legislation.gov.uk/uksi/2006/213/part/13/made
This point was further clarified in the case of The Secretary of State for Work and Pensions v Chiltern District Council.
If you have a similar problem and are asked to pay back an overpayment that you feel you should not be responsible for, I suggest you contact the Council and make them aware of this Regulation.