Rent Arrears Prevention and Recovery Policy

Part of our Income Recovery Framework - Level 1 policy approval.

1. Purpose and Scope

1.1. Maximisation of income is imperative to our effective operation. We recognise that effective rent arrears management is fundamental to high performance and therefore our aim is to ensure and recover all monies that are due to us.

1.2. We have a firm but fair policy that recognises the need to balance our responsibilities to support residents who fail to pay their rent with our responsibilities to our wider customer base to ensure we collect income efficiently and effectively with due regard to the cost of collection.

1.3. This Policy will apply to all residents of our rented accommodation stock. It also includes those in “affordable” rented properties. However, it excludes leaseholders and shared owners. The recovery of income in these cases is covered by our Service Charge Policy.

1.4. This Policy will not differentiate between those residents who make payments direct to us, and those where the rent is paid by Housing Benefit or Department for Work and Pensions. We will provide support to all residents regardless of their income status.

1.5. We expect that it is the resident’s responsibility to ensure that rent and service charges are paid in line with the tenancy agreement; regularly and on time irrespective of method of payment. Rent is due each Monday for the week ahead.

2. Policy Statement

2.1. Our vision is Homes for living, communities for life. We recognise the detrimental effect rent arrears have on the quality of residents’ lives and the importance of prevention of rent arrears. The aims of this Policy are to ensure that:

We provide timely information and support to residents.
We will ensure that we have effective systems for arrears prevention.
We will adopt and establish clear procedures for the recovery of arrears.
We will involve our residents and employees in shaping the Income Collection Service.

2.2. Information and Support

We will:

Complete an affordability assessment prior to allocating an affordable rent tenancy. Where it is deemed from the affordability assessment that the property is unaffordable, the applicant may be refused the tenancy.
Complete a tenancy risk matrix prior to allocating a tenancy to identify whether any support is needed to manage the rent account and sustain the tenancy. Where support needs are identified, the appropriate referrals will be made to internal teams.
Promote a payment culture emphasising the responsibility for rent payment from initial contact with prospective residents and throughout their tenancy. This will be undertaken through discussions at the sign-up and new tenant visit appointments, identifying rent arrears in the early stages, and taking prompt action in accordance with the Rent Arrears Recovery Procedure.
Make every effort during the nomination process, tenancy sign up and when in contact with residents to inform them of their responsibility to pay rent in line with their tenancy agreement.
Maximise income for vulnerable residents by actively referring to our welfare advice service to provide advice and guidance on financial matters including benefit advice, budgeting, debt counselling and promotion of good money management. We will promote these services through a wide range of media sources including our newsletter and website.
Issue rent statements for all tenants on a quarterly basis so that residents are aware of the current position of their rent account. These are also available on demand, as is the balance only service through our SMS text messaging service.
Develop and maintain links with local statutory and voluntary agencies to provide support and assistance to residents in managing or preventing arrears.
Offer support to residents impacted by welfare reforms to find the most appropriate payment plan and payment method, and to assist with applications for benefits, and/or more suitable accommodation where appropriate.
Utilise our internal tenancy sustainability fund (subject to annual budgets) to assist our residents that are experiencing financial hardship. Every application will be considered on an equal basis and assessed by our Welfare Team before a decision is made.
Promote a customer focussed service where our residents are treated equally, fairly and respectfully through the debt recovery process, recognising that some residents may require extra support due to vulnerabilities or disabilities.

2.3. Arrears Prevention

We will:

Enable residents to pay arrears using a variety of payment methods that are flexible, accessible and convenient to use. We will encourage and actively promote the use of cost-effective payment methods including direct debits and standing orders as our preferred methods of payment.
Empower residents to keep themselves informed of their rent account balance through the use of our online resident’s portal.
Have a clear and consistent approach to rent arrears recovery that promotes consistent monitoring of rent payments, early intervention, arrears prevention and regular contact with our residents throughout the life of their tenancy.
Capture and record changes to resident profiling data and encourage residents to inform us and welfare benefit providers of any changes in personal circumstances.

2.4. Clear Procedures

We will:

Take prompt action to recover rent arrears when required and aim to recover debt within the shortest possible timescale to maximise our income.
Seek to make realistic repayment arrangements to clear arrears, taking into account the resident’s income and outgoings.
Take appropriate action through the County Courts in line with the Rent Arrears Recovery Procedure and publicise our action to recover arrears. We will adhere to the County Court’s pre-action protocol on possession claims for rent arrears, and take repossession of a property (eviction) only as a last resort.
Consider seeking possession of the property where a resident is made subject to a bankruptcy or Debt Relief Order.
Request a direct payment of the housing element of Universal Credit from the Department for Work and Pensions in line with their Alternative Payment Arrangement guidelines.
Make use of the provision of mandatory Ground 8 of the Housing Act 1988, in very exceptional circumstances. Ground 8 can only be used to seek mandatory possession where the minimum sum of rent arrears is outstanding. This would be for persistent non-payment without cause and where all other avenues of ensuring recovery of rent due have been exhausted. Due to the nature of the transfer agreement we will not use Ground 8 provisions for residents that transferred from Aylesbury Vale District Council.
Monitor rent accounts that are in credit. If an account holds more than the equivalent of one month’s rent and there are no outstanding debts owed to us, we may offer a refund. If money is owed to the Local Authority or the Department for Work and Pensions because of an overpayment of housing costs or Housing Benefit, any credit on the account will be used towards that balance before a refund is considered. We will always retain the equivalent of one full payment on the account. This will match the usual payment frequency, for example, if rent is paid weekly, we will keep one week’s rent or if rent is paid monthly, we will keep one month’s rent. This ensures that rent remains up to date for the period ahead.
Ensure our employees are knowledgeable and equipped with the right tools to provide an effective income management service by regularly training our employees in procedures to recover arrears, welfare benefits and welfare reform matters.

2.5. If there is debt due to us by a resident, we will consider withdrawal/denial of the following services:

New permissions for improvements to the property.
New pet permissions.
Scheduled improvement programme works.
Existing and new garage licences.
Existing and new requests for our gardening service.
Transfer to another of our properties.
Mutual exchanges.

3. Policy Implementation

3.1. The Income Collection and Leasehold Manager is responsible for the implementation of this Policy.

3.2. In complying with this Policy we will ensure that:

Clear and consistent procedures are in place.
Arrears prevention information is clear, straightforward and promoted proactively to residents.
Rent recovery procedures make best use of I.T. and communication methods in order that the management of arrears is effective and efficient.

4. Performance Measures and Monitoring

4.1. Rent Arrears Prevention will be measured by the following indicators:

Current rent arrears as % of rent debit.
Number of evictions and court hearings on an annual basis.

4.2. The Assistant Director of Housing and the Income and Leasehold Manager will monitor this Policy to ensure it meets positive practice and statutory requirements.

4.3. The Policy will be monitored through KPI’s to the Board, ELT and Resident Forum (RF) on a monthly and quarterly basis.

5. Impacts

Resident/Employee Implications -

The Residents’ Forum has been consulted during the preparation of this policy.

Legislation controlling debt advice requires that we ensure that the Welfare Advisors have the necessary training and licence to provide specific advice on debt and budget management.

Employees are regularly trained in procedures to recover arrears, welfare benefits and welfare reform matters.

Equality, Diversity & Inclusion -

Our residents are diverse and this will be taken into account during the implementation of this Policy to ensure equity of treatment:

We will take into account the individual needs of our residents and tailor our approach and actions appropriately.
All correspondence and literature will be in plain English and jargon free.
If required we can provide information in alternative formats such as large print or Braille and translation by the use of Language Line.
We will take account of a resident’s vulnerability and will contact residents by their preferred method of contact.

We will seek to monitor the profile of residents who fall into arrears or are evicted to ensure we are treating everyone fairly.

Value for Money -

We will ensure the effective management of rent collection as this is critical tour financial viability. For the purpose of this Policy, rent arrears are defined as any rent payment not made in accordance with the tenancy agreement or licence.

We believe that arrears prevention is more effective in the long term than arrears recovery. This Policy is designed to ensure the best use of resources, and the delivery of a value for money service.

Wherever possible, arrears prevention activity will be undertaken as part of another activity including the sign up process, during the new tenant visit and in existing mailings.

We will use a range of preventative measures to help sustain tenancies and minimise the use of possession action.

We will benchmark performance against similar organisations to monitor quality, performance and cost effectiveness and strive to deliver best practice services and achieve top quartile performance.

Data Protection -

All due care is taken to protect data held by us and in particular, we ensure we keep all resident data secure and meet with data protection requirements.

Accountability -

The Residents’ Forum has been consulted during the preparation of this Policy.

Quality -

We look to ensure that our residents are safe in their homes by supporting the provision of well-maintained homes which are in line with legislative and regulatory requirements.

When things go wrong -

Residents can communicate concerns through our formal channels. Via telephone, email, our website or our social media channels.