Rent Arrears Policy

Effective Date: March 2019 Review Date: March 2022 Approved by HHP Board: 20 March 2019

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TABLE OF CONTENTS

INTERPRETATIONS & ABBREVIATIONS

INTRODUCTION ...................................................................................... 2

AIMS & OBJECTIVES ................................................................................ 2

EQUAL OPPORTUNITIES ............................................................................ 3

AFFORDABLE RENTS ................................................................................ 3

METHODS OF RENT PAYMENT ................................................................... 3

PERFORMANCE MONITORING .................................................................. 4

PERFORMANCE INDICATORS .................................................................... 4

PREVENTION OF ARREARS ........................................................................ 4

HOUSING BENEFIT ................................................................................... 5

RENT ARREARSS CONTROL AND RECOVERY ............................................... 6

ARREARS CONTACTS ............................................................................... 6

REPAYMENT ARRANGEMENTS ................................................................... 7

LEGAL ACTION ....................................................................................... 7

NOTICE OF PROCEEDINGS OF RECOVERY OF POSSESSION AND DEGREE OF

EJECTION 8

CONFIDENTIALITY ................................................................................... 8

BOARD MEMBERS IN ARREARS.................................................................. 8

FORMER TENANT ARREARS ....................................................................... 9

COMPLAINTS PROCEDURE ....................................................................... 9

MONITORING AND REVIEW OF POLICY ..................................................... 9

POLICY CHANGE HISTORY ...................................................................... 11

INTERPRETATIONS & ABBREVIATIONS ........................................................ 12

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RENT ARREARS POLICY

INTRODUCTION

1.1 Rent is our main source of income. The effective collection of rent and the

prevention and effective management of rent arrears is vital for us in order to

maximise the financial resources available to maintain its housing stock, fund

its ongoing investment programme, provide a full range of services to its tenants

and other customers, and remain a going concern.

1.2 The payment of rent is a primary responsibility of every tenant and is a central

obligation of the tenancy agreement. We expect all tenants to pay their rent

on time in accordance with their tenancy agreement and rent debt will always

be pursued.

1.3 Rent payment is a major issue for tenants and we have a responsibility to

prevent tenants from accumulating rent arrears that may trap them in a cycle

of poverty and/or lead to their eviction. It is important to focus on early action

and intervention, however a supportive and understanding view will be taken

of arrears problems in cases of proven financial hardship.

AIMS & OBJECTIVES

Aims

2.1 The aims of Hebridean Housing Partnership’s Rent Arrears Policy are to:

a) Ensure that we have sufficient resources to function efficiently and

effectively;

b) Ensure that tenants are not burdened with higher rents as a result of

uncontrolled rent arrears;

c) Maximise rent collected;

d) Maximise uptake by tenants of Housing Benefit or Universal Credit and

other welfare benefits to which they are entitled; and

e) Minimise the level of rent arrears in a sensitive but effective manner,

and wherever possible enable tenants to maintain their tenancy and

avoid eviction and/or homelessness.

Objectives

3.1 The specific objectives of the policy are:

a) To emphasise the importance of the payment of rent when a tenant

first applies for housing, at sign up, and during new tenancy visits;

b) To regularly and effectively monitor levels of rent arrears and have

early intervention mechanisms in place which identify potential rent

arrears issues and prevent significant rent arrears arising;

c) To offer early, appropriate notification, support and guidance to

tenants to reduce rent arrears;

d) To respond quickly to non-payment of rent and make contact with the

tenant as soon as possible;

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e) To adopt an approach to arrears management which is firm but also

focuses on preventing homelessness and takes account of tenants’

individual circumstances;

f) To take appropriate action in each case in accordance with the level

of the rent arrears; and

g) To promote joint working with Comhairle Nan Eilean Siar and other

external agencies as appropriate.

EQUAL OPPORTUNITIES

4.1 This policy complies with our Equal Opportunities Policy. We are committed to

a proactive role in valuing and promoting diversity, fairness, social justice and

equality of opportunity by adopting fair policies and procedures. The Equal

Opportunities Policy should be seen as an integral component of our Rent

Arrears Policy.

AFFORDABLE RENTS

5.1 We will not provide extra services without consultation with tenants where there

will be an impact on their rent. We will aim to ensure that it meets the Scottish

Social Housing Charter’s rent and service charges outcome and standard in

respect of rent and service charges.

5.2 This requires that rents and service charges are set in consultation with tenants

and other customers so that a balance is struck between the levels of services

provided, the cost of the service, and the affordability of rents. It also requires

that tenants are given clear information on how rent and other money is spent.

5.3 We will send all tenants a rent statement at least twice each rent year. This will

ensure that tenants understand that we monitor accounts and be aware of

the status of their account.

METHODS OF RENT PAYMENT

6.1 We will offer tenants a range of payment methods and will keep these under

review. These include:

• Direct Debit;

• Bank Standing Order;

• Rent Card Payments at ‘Paypoint’ Outlets;

• CNES Cash Desk;

• HHP Cash Desk;

• Online Payment; and

• Housing Officer Home Visit (in exceptional circumstances).

6.2 We will consider new methods of payment as these develop.

6.3 We will encourage tenants in receipt of Housing Benefit or Universal Credit

housing element to opt for direct payment to landlord, and in appropriate

circumstances will seek statutory deductions from DWP payments.

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6.4 In accordance with our tenancy agreement, tenants are required to pay their

rent and other charges in full one week in advance, unless an alternative

arrangement which suits their particular circumstances is agreed in advance.

PERFORMANCE MONITORING

7.1 The Board will annually agree its target for current tenant rent arrears as a

percentage of the net rent due in the financial year.

7.2 We will put in place systems to monitor that its targets are being met and

consider action where appropriate.

7.3 We are committed to maximising rent collection performance.

7.4 We will benchmark against other organisations’ rent collection performance.

7.5 We will provide staff with training to enable them to carry out their rent arrears

control function effectively and sensitively.

7.6 We will develop a customer focused service and will seek to work in partnership

with other organisations which can benefit its tenants, including Citizens Advice

Service, CNES Housing Benefit Section and Department of Work & Pensions.

7.7 A report on Arrears Management Performance Indicators (statutory and local)

will be made to each meeting of the Board.

7.8 The Board will review the Arrears Management Performance after each year

end and amendments will be made as necessary to the Rent Arrears Policy

and associated procedures after consultation with service users and other

agencies.

PERFORMANCE INDICATORS

8.1 We will maintain systems to measure the Statutory Performance Indicators:

a) Current tenant rent arrears as a percentage of the annual nett rent

receivable;

b) Number and percentage of tenants owing over £250 in rent arrears;

c) Number and percentage of tenants owing over 4 weeks rent; and

d) Number and percentage of tenants owing over £1000 in rent arrears.

8.2 We will maintain systems to measure Local Performance Indicators in relation

to:

a) Number and percentage of tenants in rent arrears;

b) Amount and percentage of rent arrears due to Housing Benefit;

c) Amount and percentage of annual rent collected;

d) A banded analysis of arrears;

e) A geographic analysis of arrears; and

f) Number of tenants evicted due to rent arrears.

8.3 We will maintain systems to enable it to make ARC returns and this data shall

be reported to the Board and in our Annual Report.

PREVENTION OF ARREARS

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9.1 It is recognised that prevention is the best means of arrears control and we will

take steps at the earliest possible stage to prevent arrears accruing and to

promote a culture of payment.

9.2 The importance of communicating effectively with housing applicants and

prospective new tenants is recognised as a key means of controlling and

minimising rent arrears. Pre-tenancy advice, information and assistance will be

provided as follows:

At The Point of Application

9.3 When a prospective tenant makes an application for housing, the applicant

will be advised to retain all relevant financial information that may be required

if an application for Housing Benefit or Universal Credit housing element is

made. This advice will be repeated when an offer or provisional offer is made.

Sign Up Interview

9.4 At sign up the tenant will be informed as fully as is practical of all costs

associated with the tenancy. It will be emphasized that the tenant is responsible

for the payment of rent, even if Housing Benefit or Universal Credit is awarded.

Rent payment methods will be discussed and agreed. Tenants will be

encouraged to make payments by direct debit, but if this is not appropriate to

their circumstances an alternative method of payment will be agreed. Housing

Benefit or Universal Credit housing element entitlement will be considered and

if it appears that the tenant may be entitled to Housing Benefit or Universal

Credit housing element they will be given assistance to complete the

necessary application form where appropriate and encouraged to select the

direct payment to Landlord option.

New Tenancy Visit

9.5 New tenants will have their rent account monitored closely for early signs of

difficulty and will receive a visit within six weeks of the start of the tenancy to

emphasise the advice given at the sign up interview and to identify and resolve

any early payment issues.

HOUSING BENEFIT

10.1 Universal Credit (UC) was implemented in the Western Isles in September 2018.

UC is affecting relatively small numbers of tenants at present but this will

increase when full migration takes place. The migration of those on legacy

benefits is due to commence in 2020. This policy continues to refer to ‘Housing

Benefit’ as not all tenants will be affected by UC.

10.2 Direct Housing Benefit payments account for a significant percentage of our

income and the effective collection of Housing Benefit is key to minimising rent

arrears and to our financial wellbeing.

10.3 We will continue to operate a Service Level Agreement with Comhairle Nan

Eilean Siar to ensure that Housing Benefit entitlements are paid on time and

that relevant information about claimants who are our tenants is provided.

10.4 We will take a proactive approach to Housing Benefit and UC cases at all times,

and in appropriate circumstances will assist tenants affected by the ‘Bedroom

Tax’ to claim Discretionary Housing Payment (DHP).

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10.5 We will encourage the prompt reporting of change in household/income

circumstances and will actively encourage tenants to return Housing Benefit

review forms promptly. In the case of UC claimants we will ensure tenants

report any changes through their online journal.

10.6 We will notify tenants as soon as possible after information is received that a

Housing Benefit or UC claim has been suspended or cancelled, and will assist

tenants as appropriate to have their claim reinstated.

10.7 We will seek to maintain a positive working relationship with Comhairle Nan

Eilean Siar Housing Benefit staff in order to ensure the best possible service to

tenants and to minimise rent arrears caused by suspension or cancellation of

Housing Benefit.

10.8 Rent arrears that arise as a result of delayed Housing Benefit or UC payments

shall be treated as technical arrears.

RENT ARREARS CONTROL AND RECOVERY

11.1 We will adopt a firm and sensitive approach to rent arrears recovery.

11.2 In order to identify rent arrears as they arise, we will establish and maintain a

fully integrated Housing Management System which holds the records for rents

and arrears case management, allocations, void management, estates,

customer services and property management. The system automatically

reflects all payments to rent accounts or changes in rent account balances.

The system also indicates where there are ‘technical arrears’ due to expected

payments for Housing Benefit, and incorporates our current Rent Arrears Policy

and procedures.

11.3 A realistic and consistent approach to rent arrears recovery is essential and

early intervention and identification of rent arrears is a key element in successful

rent arrears recovery.

11.4 This policy shall be supplemented by detailed working procedures which will

be used by staff in implementing the policy.

11.5 Rent arrears recovery will be based on a staged escalation process up to and

including repossession.

11.6 Recovery actions will be based on a preventative approach that seeks to

maximise tenants’ entitlement to benefits as well as securing regular payments.

11.7 Staff will take account of the particular needs of vulnerable tenants and liaise

with relevant external agencies to assist as appropriate.

11.8 Joint tenants will be made aware that they have joint and several responsibility

for rent arrears repayment.

11.9 If tenants have outstanding debt to us then any payments due to them by us

will first be paid to their rent account. Any balance outstanding after the rent

account balance has been cleared being paid to the tenant. This shall also

apply to former tenants’ accounts if payment is due through the tenants’ right

to compensation scheme.

ARREARS CONTACTS

12.1 All contacts with tenants, whether by letter, email, phone, text message or in

person will be conducted in private and the outcomes recorded in writing.

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12.2 Where a tenant is known to be vulnerable, arrangements will be made for his

advocate to be present at any meeting. If a tenant requires an interpreter or

signer, arrangements will be made to have one present.

REPAYMENT ARRANGEMENTS

13.1 Before legal action is considered, every effort will be made to get a clear

picture of the tenant’s circumstances and the reason(s) for the arrears.

13.2 In cases where the tenant cannot clear the arrears in a single payment, an

affordable payment plan to reduce the arrears in realistic and sustained

instalments over a specific period of time will be set up. This will be based upon

a detailed assessment of the tenants’ ability to pay.

13.3 A written agreement will be made with the tenant where possible.

13.4 Once a tenant has agreed a repayment plan, the rent account will continue

to be monitored. If payments continue to be missed recovery action will be

escalated.

LEGAL ACTION

14.1 Legal action is the last stage in the arrears process and a decision to proceed

with action to recover possession of the property and outstanding debt will only

be taken when all other means of recovery of the rent arrears have been

exhausted, or when the tenant has failed to engage or respond and rent

arrears continue to increase or have not reduced.

14.2 Before commencing with legal action, we will ensure that all Pre-Action

Requirements as set out under sections 14 and 14A of the Housing (Scotland)

Act (“the 2001 Act”) as amended by section 155 of the 2010 Act and

Repossession Orders under section 16 of the 2001 Act as amended by Section

153 of the 2010 Act have been complied with.

14.3 Relevant departments of Comhairle Nan Eilean Siar and any appropriate

support agency/provider will be informed of the legal action and encouraged

to provide assistance to prevent the homelessness of the tenant and their

household.

14.4 During all stages in the legal action process the rent account will be regularly

monitored and attempts to make personal contact with the tenant and resolve

the matter will be made.

14.5 Eviction will always be seen as a measure of last resort.

14.6 Other forms of action such as lowering repayment arrangements, Direct

Payments from benefits and wage arrestment will be pursued before a decision

to seek, obtain and implement a Decree of Ejection is made.

14.7 We will provide tenancy support to tenants who are at risk of losing their homes.

14.8 We will seek to recover legal expenses incurred when taking court action

against tenants in rent arrears, unless the Director of Finance and Corporate

Resources determines that it is not cost effective to do so. A scale of charges

will be introduced and subsequently reviewed annually, which reflects actual

legal costs incurred in taking court action and staff costs specifically associated

with the legal action.

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NOTICE OF PROCEEDINGS OF RECOVERY OF POSSESSION AND DEGREE

OF EJECTION

15.1 The Director of Operations will have day to day responsibility for rent arrears

monitoring and recovery including the issue of Notice of Proceedings for

Recovery of Possession.

15.2 It is delegated to the Director of Finance and Corporate Services to initiate

Court Proceedings leading to Recovery of Possession of a tenancy at the Sheriff

Court.

15.3 The Board will receive a report, at each meeting of the Board, of Notice of

Proceedings for Recovery of Possession issued to tenants and Decrees of

Ejection granted by the Sheriff Court.

15.4 We will take immediate action to implement a Decree of Ejection once

granted.

15.5 Some tenants will seek to clear rent arrears after a Decree of Ejection has been

granted. In such cases, if payment is made in full, the Decree of Ejection will

not be implemented. In such circumstances arrears are expected to be paid

in full. Any decision to accept less than full payment shall only be taken by the

Director of Operations. If a decree is granted against a tenant for the second

time, the assumption will be that the decree will be implemented regardless of

an offer to pay. A decision not to implement a second decree will only be

taken by the Director of Operations and would be based on an assessment of

the tenant’s circumstances, the implications of enforcement, and liaison with

other appropriate agencies. If a decree is granted for the third time, it shall be

implemented.

15.6 Comhairle Nan Eilean Siar’s Social Work Department, Homelessness Section

and other relevant agencies will be notified of cases where we are pursuing a

Decree of Ejection.

CONFIDENTIALITY

16.1 Reports to the Board will be presented in a way that ensures that tenants’

confidentiality is protected at all times.

BOARD MEMBERS IN ARREARS

17.1 The Board is responsible for determining our Rent Arrears Policy and receives

reports on individual arrears cases.

17.2 It is important that there is no conflict of interest for Board Members in rent

arrears matters. Board Members in rent arrears must declare an interest at any

meeting where the matter being discussed involves rent arrears, as set out in

our Code of Governance for Board Members.

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FORMER TENANT ARREARS

18.1 We will pursue former tenant rent arrears, where it is recoverable and cost

effective to do so, in accordance with its Recovery of Sundry Debts Policy.

COMPLAINTS PROCEDURE

19.1 Tenants who have a complaint about the way they have been dealt with in

respect of rent arrears recovery may refer to our Complaints Policy, which is

available at the Partnership’s offices

MONITORING AND REVIEW OF POLICY

Policy Review

20.1 This policy will be subject to regular review. Such reviews will encompass the

requirements of Section 54 of the Housing (Scotland) Act 2001 in relation to

consultation. We will fulfil this obligation as a minimum. UC will ultimately

replace Housing Benefit, and Housing Costs will become a component of UC.

20.2 The introduction of UC may have a negative impact on our ability to collect

rent and may lead to an increase in levels of rent arrears.

Legislative & Regulatory Framework

21.1 Relevant legislation includes:

The Housing (Scotland) Act 2001

This establishes the regime of Scottish Secure Tenancies, the terms of such

Tenancies and the arrangements for repossession of a tenancy.

The Housing (Scotland) Act 2010

This set out the terms of Pre-action Requirements under sections 14 and 14A of

the Housing (Scotland) Act (“the 2001 Act”) as amended by section 155 of the

2010 Act and Repossession Orders under section 16 of the 2001 Act as

amended by Section 153 of the 2010 Act.

The General Data Protection Regulation (GDPR)

Sets standards for the gathering and sharing of personal information.

The Human Rights Act 1998

Has an effect on housing management functions, including Recovery of

Possession Proceedings.

The Bankruptcy and Diligence (Scotland) Act 2007

Sets out the legal framework for recovery of debt, including rent arrears.

The Homelessness (Scotland) Act 2003

Requires HHP to advise the relevant local authority in statutory form when legal

proceedings to raise proceedings are commenced.

The Social Housing Charter

The Charter requires that we manage all aspects of our business so that tenants,

owners and other customers receive services that provide continually

improving value for money for the rent and other charges that they pay.

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21.2 The following Scottish Housing Regulator’s Performance Standards are

particularly relevant to this policy:

21.3 Performance Standard GS 3.1: Responsiveness to Service Users – ‘We place

people who use our services at the heart of our work. We treat people with

respect and are responsive to their views and priorities.’

21.4 Performance Standard GS 3.1: Housing Information and Advice – ‘We provide

or procure effective information and advice, in line with the National Standards

for housing information and advice services.’

21.5 Performance Standard AS1.8: Arrears: - ‘We act to prevent arrears of rent and

service charges building up. We recover any arrears fairly and effectively.’

21.6 Performance Standard AS4.4: Prevention of Homelessness:- ‘We help prevent

homelessness arising in the first place and its recurrence when it has occurred.’

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HANGE HISTOR

POLICY CHANGE HISTORY

Version Change Applied Date By

3.0 Emphasise the key role that an effective

arrears policy plays in the financial

wellbeing of HHP;

Reflect legislative changes since the last

policy review; and

Expand performance

measures/indicators.

18 February

2015

Martin Flett

3.1 Wording updated for GDPR 9 March 2018 Angela Smith

3.2 Minor wording 20 March 2019 Donalda

MacKinnon

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INTERPRETATIONS & ABBREVIATIONS

The following interpretation and abbreviations are used in this policy:

Word Interpretation

HHP or Partnership Hebridean Housing Partnership

Board Means the Board of the Hebridean Housing Partnership

Board Members All Members of the Board including co-opted Members

ARC Annual Return Charter

All references to the masculine gender in this policy shall read as equally

applicable to the feminine gender

HHP is a registered society under the Co-operative and Community Benefit Societies Act 2014, Registered Number: 2644R(S),Registered Office: Creed Court, Gleann

Seileach Business Park, Willowglen Road, STORNOWAY, Isle of Lewis HS1 2QP. It is a charity registered in Scotland, Charity Number:SCO35767, registered as Registered

Social Landlord with the Scottish Housing Regulator, Registration Number:359 and registered as a Property Factor, Registration Number PF000183

Email: info@hebrideanhousing.co.uk

Web: www.hebrideanhousing.co.uk

Phone:0300 123 0773