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.  Fairhive recognises 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 Fairhive.

1.2. Fairhive has 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 Fairhive’s Service Charge Policy.

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

1.5. Fairhive expects that it is the residents 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.  Fairhive recognises 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 members of staff in shaping the Income Collection Service

2.2. Information and Support

Fairhive will:

• Complete an affordability assessment and risk matrix prior to allocating a tenancy to identify whether any support is needed to manage the rent account and sustain the tenancy.  Where it is deemed from the affordability assessment that the property is unaffordable, the applicant may be refused the tenancy.
• 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 Fairhive’s 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 Fairhive’s 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.

2.3. Arrears Prevention

Fairhive 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 Fairhive’s 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 Fairhive and welfare benefit providers of any changes in personal circumstances.

2.4. Clear Procedures

Fairhive will:

• Take prompt action to recover rent arrears when required and aim to recover debt within the shortest possible timescale to maximise Fairhive’s income.
• Seek to make realistic repayment arrangements to clear arrears, taking into account the resident’s income and outgoings.  Debt payments will be prioritised towards the current rent account first, followed by garage rent arrears, former rent accounts, then any sundry debts.
• Take appropriate action through the County Courts in line with the Rent Arrears Recovery Procedure and publicise Fairhive’s 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.
• 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.
• Give advice to Assured Shorthold tenants on their obligations to fulfil their contractual obligations within their tenancy agreement. In the absence of exceptional circumstances, we will use the provision of mandatory Section 21 of the Housing Act 1988 for those residents who are in persistent rent arrears during their starter tenancy.
• Make use of the provision of mandatory Ground 8 of the Housing Act 1988 in very exceptional circumstances.  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 with credit balances and offer rent refunds where the account is more than the value of 1 month’s rent in credit for current tenants of working age.  For current tenants of non-working age we will offer refunds where the account is more than the value of 1 week’s rent in credit.
• Ensure our staff are knowledgeable and equipped with the right tools to provide an effective income management service by regularly training our staff in procedures to recover arrears, welfare benefits and welfare reform matters.

2.5. If there is debt due to Fairhive 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 the Fairhive’s gardening service.
• Transfer to another Fairhive property.
• 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 Fairhive 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, EMT and Tenant Scrutiny Panel (TSP) on a monthly and quarterly basis.

5. Impacts

Resident/Staff  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 advise on debt and budget management.

Staff 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:

• 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 prevision 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.

6. Related legislation and other documents:

Equality and Diversity Policy 

Policy author details

Author	Hayley Dickens
Job title	Income and Leashold Manager
Date approved	February 2023
Review due date	February 2026