The missing 13th month!
Posted by Peak Property Letts on Wednesday, January 4, 2012
Under: General

Here's proof that there is a missing 13th month! If you ask any person in the street how many weeks there are in a month they will of course say 'four' ( they will also probably wonder why you are asking such a daft question and won't immediately understand why this question is so important to both Landlords or Tenants ). Using this nugget of wisdom, by logic, it follows that the total number of weeks in a year will be 4 weeks x 12 months i.e. 48 weeks in the year - CLEARLY THE WRONG ANSWER as there are of course 4 more weeks unaccounted for - the missing 13th month !
When it comes to Housing Allowance, which is assessed on a weekly basis and usually paid every 28 days in arrears, the fact that there are 52 weeks (ie. 13 four week periods) in the year is a very important factor. In these hard economic times even the most upstanding 'model tenant' can find themselves one minute affluent, in work, paying their rent monthly and 'in advance'..... but then the next find themselves without a job , seeking allowances and paying rent one month 'in arrears'.
It doesn't take long to compute that there is a problem for both Landlord and Tenant if the original rent is still to be paid on a monthly basis and no adjustment is made for the change of circumstances. Heres an illustration of the issue:
2 calendar months, December and January both have 31 days (ie. a total of 62 days - just 1 day short of 9 weeks)
2 notional months of Housing Allowance have 2 x 28 days (i.e a total of 56 days 8 weeks )
In simple terms at the end of January, through no fault of their own, the Tenant has potentially found themselves in arrears and will have received 8 weeks Housing Allowance but will be owing the equivalent of 9 weeks rent . Being 1 week short in rent means that potentially the Landlord will have to wait for another 3 weeks until the next Housing Allowance cheque arrives, or the Tenant (often with no resources of their own - thats why they qualify for Allowances!) will have to stump-up and 'bank roll' the difference.
A simple addendum to the terms can soon bring matters back under control and in the interim, good accounting is essential such that the Tenant knows where they are and the Landlord is aware of the changes - especially the 'dry spell' where a regular monthly rental payment 'monthly in advance' , changes to 'four weekly in arrears' from Housing Allowance. Most Landlords would prefer for Housing Allowance to be received rather than have an empty property and be receiving nothing.
In : General
Tags: "housing allowance" arrears
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