STROUD DC
INCOME COLLECTION & RECOVERY POLICY
PART 1
POLICY BACKGROUND & COVERAGE
Introduction
1.1
The Council aims to keep rent arrears and other debts at the lowest possible level, in
order to maximise income to the Housing Revenue Account (HRA) and to
demonstrate good financial management.
1.2
Our policy on the recovery of debt will be to offer all relevant support and advice to
tenants, licensees and leaseholders, enabling them to understand their
responsibilities and entitlement to benefits. However, where debts do arise, we will
take prompt action in line with policy.
1.3
This policy details the arrangements for the planned and cyclical maintenance of
properties owned by the Council.
1.4
All policies have been developed jointly by Councillors, Tenants and members of
staff.
Key Principles of the Income Collection and Recovery Policy
2.1
The key principles of the Income Collection and Recovery Policy are:

to keep rent and service charge arrears at the lowest possible levels, and below
target figures that will be set annually, in order to maximise income to the HRA

to keep the amount of income outstanding from levels outstanding rechargeable
repairs from current occupiers at as low a level as possible, in order to maximise
income to the HRA
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to place emphasis on effective prevention and firm, fair action to tackle rent and
service charge arrears, in order to minimise debts and to sustain tenancies

to keep tenants, licensees and leaseholders informed about benefits and other
financial help which may be available to them, and to maximise the take-up of
benefits
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to work in partnership with Housing Benefit to ensure effective liaison and
efficient administration

to take every opportunity to support and assist residents to manage their
accounts effectively to minimise the chances of debt occurring and the need to
take formal action for recovery

to comply with all statutory and regulatory requirements regarding debt and
arrears recovery

to treat applicants in a fair and non-discriminatory way, in accordance with the
Council’s Equalities Scheme.
2.2
The Council fulfils its repairing responsibilities through a combination of the following
policies:
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Current Tenant Rent Arrears
Rechargeable Repairs
Leasehold Service Charges
Former Tenant Arrears
Writing Off Debt
Relevant legislation and regulatory compliance
3.1
The Council will ensure that it recovers income in accordance with best practice and
relevant policy and legislation, including the following:
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Housing Act 1985 Schedule 2 Grounds for Possession
Civil Procedure Rules: Pre-action Protocol for Possession Claims based on rent
arrears April 2010
Equalities Act 2010
Disability Discrimination Act 2005
PART 2
CURRENT TENANT RENT ARREARS POLICY
Introduction
1.1
The Council’s policy on the recovery of rent arrears from current tenants will balance
information, advice and support with firm enforcement action, to ensure that current
tenant rent arrears are minimised.
Actions undertaken
2.1
We will provide accessible information about the importance of paying rent in our
tenants’ handbook, leaflets and newsletters. Particular efforts will be made to help
those with specific needs (for example, those who lack basic skills in literacy or
numeracy, or those who do not have English as their first language). All our
information will be clear and easy to understand.
1.2
We will carry regular articles in our tenants’ newsletters on benefit advice and
support available to those tenants who fall into rent arrears. We will also use other
publicity campaigns to give advice and information to our residents.
1.3
At the start of each tenancy we will give each tenant:
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1.4
At the start of each tenancy we will also:
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1.5
advice on their obligations for paying the rent and the consequences of not
paying regularly
advice and information on our current tenant rent arrears recovery policy and
procedure
advice on methods available for paying their rent
advice and assistance on applying for housing benefit
advice on where to obtain independent help with claiming welfare benefits or with
debt counselling.
identify vulnerable tenants, to ensure that rent payment and arrears recovery
procedures are appropriate and that any additional support needs are identified
and agreed
explain the dates for rent collection
explain that joint tenants are legally jointly and severally liable for any debts.
agree an appointment for a post-occupancy ‘settling in’ visit to check, amongst
other things, that rent payments are being made and any benefit claims have
been successfully processed
We will make a wide range of payment methods available to our tenant including:
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direct debit
standing order
swipe card at external payment points
direct payment of housing benefit
telephone banking
on line payments
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payment in cash, credit card or debit card or cheque at the Council office in Ebley
Mill.
1.6
Where tenant’s financial circumstances may have changed (for example when a
tenant’s entitlement to Housing Benefit has been stopped) we will provide advice and
assistance on how to pay rent, and where to obtain independent help with budgeting
skills.
1.7
We will send a rent statement to all residents every three months showing what was
paid in at least the last 13 weeks.
1.8
Upon request we will send residents a rent statement showing their arrears since the
date they accrued.
1.9
We will act promptly in contacting tenants who have rent arrears. We will contact
such tenants by letter, e-mail, telephone, home visit or fax. Home visits will always be
made for more vulnerable tenants or where it has not been possible to make contact
by other means.
1.10
Where debts cannot be cleared in full with a single payment, we will agree written
affordable repayment arrangements with our tenants, based on their income and
expenditure.
1.11
We will work closely with the Supporting People Team, support providers, and with
other external agencies, such as the Citizens Advice Bureau, to support tenants in
maximising their income and paying their rent in order to sustain tenancies.
1.12
We will provide residents with advice on where they can get help from other
independent agencies.
1.13
We will liaise with Housing Benefit to ensure that tenants are receiving their full
entitlement to benefit.
Remedies sought
3.1
We believe that applying to the Court to seek possession of a tenant’s home should
be considered as a measure of last resort where all other efforts to recover arrears
have failed.
3.2
We will accept direct deductions from income support/job seekers allowance as a
repayment arrangement where appropriate.
3.3
We will not take possession action against tenants where repayment agreements
have been made and are being kept.
3.4
We will only take possession action when we are satisfied that any outstanding
Housing Benefit issues have been resolved, and payments have been received or
overpayments refunded.
3.5
Where we enter an introductory or secure tenant into Court seeking possession of
their home, we will at the same time seek a money judgement order.
3.6
Where we enter a tenant into Court we will encourage tenants to attend Court and
will give information on sources of independent advice and support.
3.7
Where a tenant breaches the terms of a postponed possession order, we will return
to Court to seek a fixed possession date.
3.8
We will continue to offer advice and information to tenants on debt repayments, the
requirements of Court Orders and how to apply for variation orders, and where to
obtain independent help.
3.9
When we return to Court to seek a warrant for the eviction of a tenant we will:
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liaise with the Homelessness Team
liaise with Gloucestershire County Council’s Community Adult Services
Department Helpdesk where we believe there is a vulnerable adult living in the
household
liase with Gloucestershire County Council’s Children’s Social Care Department
Referral and Assessment Team where we are aware that there are children
residing in the home
3.10
All evictions will be authorised by the Housing Manager.
3.11
We will only consider a current tenant debt to be cleared when the rent arrears and
any Court costs have been repaid in full.
PART 3
RECHARGEABLE REPAIRS
Introduction
1.1
The Council’s policy on the recovery of rechargeable repairs from existing tenants
and occupiers will balance information, advice and support with firm enforcement
action, to ensure that outstanding rechargeable repair income is minimised.
Actions Undertaken
2.1
Where an occupier (current tenant or person occupying accommodation on licence)
incurs a rechargeable repair we will send them an invoice for the outstanding
amount.
2.2
Payment will be required in full before any re-chargeable repairs work is carried out,
with the following exceptions where:
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an emergency response is required
the property has to be made secure at the direction of the police where they
have forced entry (costs will be recharged as appropriate to either the resident or
the police)
the repair is prejudicial to the health and safety of the household (for example a
blocked WC)
the disrepair could cause or is causing damage to other parts of the property or
to other properties
the Council considers that the disrepair could lead to deterioration in the
appearance of the area
the Council is satisfied that genuine hardship exists
2.4
We will act promptly in contacting occupiers who owe monies for rechargeable
repairs, following the dispatch of the invoice. We will contact occupiers by letter, email, telephone and home visit. Home visits will always be made for more vulnerable
occupiers, or where it has not been possible to make contact by other means.
2.5
Where debts cannot be cleared in full with a single payment, we will agree written
affordable repayment arrangements with our occupiers, based on their income and
expenditure.
2.6
We will make a wide range of payment methods available to our occupiers, including:





direct debit
standing order
telephone banking
on line payments
by cash, credit card or debit card or cheque at our Ebley Mill office
Remedies Sought
3.1
Where an occupier fails to pay the sum outstanding for a rechargeable repair or
persistently breaks the terms of the jointly agreed repayment agreement we will enter
the matter into the County Court seeking a judgement (usually a Money Judgement
Order).
3.2
Where the Court make a judgement in our favour we will take appropriate action to
enforce the judgement.
PART 4
LEASEHOLD SERVICE CHARGES
Introduction
1.1
The Council’s policy on the recovery of outstanding service charge income from
leasehold owners will balance information, advice and support with firm enforcement
action, to ensure that outstanding leasehold service charge income is minimised.
Actions undertaken
2.1
We will provide leaseholder owners with estimated service charge accounts on an
annual or six monthly basis, depending on the terms of the lease. The information will
include details of how charges have been calculated.
2.2
We will make arrangements with all leasehold owners to pay their service charge
accounts. We will allow leasehold owners to pay their accounts, as follows:
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2.3
annually
quarterly
monthly
weekly
We will make a wide range of payment methods available to our occupiers, including:

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

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direct debit
standing order
telephone banking
on line payments
by cash, credit card or debit card or cheque at our Ebley Mill office
2.4
Non-payment of service charges will be pursued as a breach of covenant. We aim to
prevent leaseholder owners from accruing serious debts, which may lead to involving
the mortgage lender in capitalising the arrears, which in turn could lead to
repossession. We will deal with non-payment of service charges in line with the same
principles as apply to rent arrears (i.e. clear explanations of responsibilities,
information about benefits and sources of independent advice, etc.).
2.5
We will act promptly in contacting leasehold owners who have arrears. We will
contact leasehold owners by letter, e-mail, telephone and home visit. Home visits will
always be made for more vulnerable leasehold owners or where it has not been
possible to make contact by other means.
2.6
Where debts cannot be cleared in full with a single payment, we will agree written
affordable repayment arrangements with our leaseholder owners, based on their
income and expenditure
Remedies sought
3.1
Where a leasehold owner has either failed to agree to a repayment plan or has
breached the terms of the repayment plan on a number of occasions and the owner
has a mortgage, we will contact the mortgagee advising them of the non-payment of
service charges and request that they consider capitalising the arrears.
3.2
Where the leasehold owner is the outright owner of the accommodation, or where the
mortgagee refuses to capitalise the debt, we will initiate action in the County Court to
recover the debt, initially via a money judgement order. If this is unsuccessful we will
then seek to recover the debt via repossession of the property.
PART 5
FORMER OCCUPIER DEBT
Introduction
1.1
The Council’s former occupier debt policy seeks to recover as much income owed by
former occupiers as possible.
Actions undertaken
2.1
We will seek the new address of all former occupiers (including former tenants and
leaseholders) who leave owing us an outstanding debt (rent arrears, service charge
arrears, Court costs, occupancy charges and rechargeable repairs).
2.2
Where we are able to locate the new address of a former occupier who owes a
housing debt to the Council, we will send them an invoice for the sum outstanding.
For all debts greater than £10, a letter will be sent to the former occupier should they
not respond to the invoice.
2.3
Where a former occupier makes contact with us in relation to a debt, we will provide
them with information about how the debt accrued and make arrangements for them
to repay the debt.
2.4
Where the debt relates to a former occupier who has died, we will contact their next
of kin or the executor of the estate to establish whether the former occupier’s estate
had sufficient funds to cover the debt. Where there are sufficient funds to repay the
debt, we will arrange with the former occupier’s next of kin or executor for repayment.
2.5
Where we become aware of the whereabouts of a former occupier whose debt has
been written off, and the debt it not statute-barred, we will re-instate their debt and
make arrangements for recovery of the outstanding sums.
Remedies sought
3.1
Where a former occupier owes a debt in excess of £2501 and has failed to make
arrangements to repay the debt, or has failed to comply with the terms of a
repayment agreement, we will seek a money judgement order and will undertake
appropriate recovery action.
3.2
Where a Court has granted a money judgement order against a former occupier, we
will seek to enforce it by means of an attachment of earnings order where we are
aware that the former occupier is employed.
3.3
We will, from time to time, use external debt collection agencies to recover former
occupier debt on our behalf.
1
This sum will be reviewed on an annual basis.
PART 6
WRITING OFF FORMER OCCUPIER DEBT
Introduction
1.1
This policy sets out the arrangements within the Council for writing off the debts of
former occupiers and current tenants.
Actions Taken
2.1
From time to time the Council will write off the debts of former occupiers and in very
exceptional circumstances debts of current tenants. Debts will be written off for the
following reasons:
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2.2
the debt is uneconomic to recover
the Council has been unable to trace the former no funds in estate – the former
occupier died leaving no funds in their estate
recovery action has proven unsuccessful
recovery of the debt would cause severe financial hardship
All debts will be written off by the Council’s Audit Team based on the
recommendations of Housing Officers. Recommendations in relation to the writing off
of debt will be made by Officers of increasing seniority.
PART 7
EQUALITY IMPLICATIONS
Introduction
1.1
The Council is committed to giving an equal service to all. Any action taken under
this policy will comply with current equalities legislation.
Procedures and Practices
2.1
The Council’ staff and contractors will operate in such a way to ensure that their
procedures and practices are sensitive to the needs of individual residents and to
ensure that they do not discriminate on the grounds of:
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2.2
ethnicity
age
disability
religion or belief
gender
sexual preference
gender identity
Income collection and recovery action will from time to time need to be tailored to
meet the needs of individuals, for example the approach to pursuing a debt may vary
because of the needs of the residents. All cases will be considered on an individual
basis.
Information
3.1
The Council will in all reasonable circumstances make information available in a
variety of information formats, including:
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large print
audio tape
community languages
PART 8
PERFORMANCE MONITORING
Introduction
1.1
The Council will monitor its performance in delivering its income collection and
recovery service to ensure that the service is delivered effectively and HRA income is
maximised.
Performance Monitoring
2.1
To help achieve the Council’s aim of ensuring continuous improvement in the
services it provides and to ensure that it meets all statutory obligations, the Council
will put in place systems and processes in place which allow it to monitor and
evaluate performance.
2.2
The Council will constantly monitor service standards and its achievement of targets
in relation to the collection and recovery of income.
2.3
The Council will continually review its services by measurement against the
performance of other social housing providers, with the aim of achieving continuous
improvement and to ensure compliance with best practice
2.4
The Housing Portfolio Holder and the Housing management Forum will receive
quarterly updates detailing the following information:
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total amount of rent collected from current and former tenants as a percentage of
the total rent collectable, in:
total amount of rent arrears owed by current tenants as a percentage of the total
rent collectable, in:
total amount of rent arrears owed by former tenants as a percentage of the total
rent collectable, in:
total amount of rent arrears owed by former tenants which were written off as
unrecoverable as a percentage of the total rent collectable, in:
number of current tenants in arrears, as a percentage of the total number of
tenants
the total amount of current occupier rechargeable repair income collected as a
percentage of the total amount of current occupier rechargeable repair income
collectable:
total amount of service charge income owed by leasehold owners as a
percentage of the total leasehold service charge income collectable.
PART 9
REVIEW OF INCOME COLLECTION AND RECOVERY POLICY
1.1
This policy will be reviewed by the Council every three years unless there is a
change in legislation or regulation.
1.2
Where there has been a change in legislation which has an impact on the policy, the
policy will be reviewed within 3 months of the legislation or regulation coming into
affect.
PART 10
APPROVALS
Date approved by the Housing Management Forum:
xxth October 2010
Date approved by the Council:
xxth November 2010
Date for review of the policy:
November 2011