Rent arrears management practices in the housing association sector

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years to 2010 3 . Similarly, a key theme of 2005 rent arrears good practice guidance was the need for a more pro-active way of working, to include prioritising direct contact with tenants falling into arrears (in preference to a reliance on postal communication) . 4 A key policy move aimed at consolidating the downward trend in social landlord possession actions since 2004 was the introduction of the PAP in 2006 . 5 A central objective of the research was, therefore, to assess the extent to which the PAP has impacted on HAs’ operational practice . All of this policy activity has taken place against a backdrop of generally benign economic conditions, with high levels of employment and low interest rates . It must be acknowledged that the onset of recession in 2008 may well affect the incidence of tenant debt and on social landlord practice in managing rent arrears . In our case study research we probed rent collection staff on early impacts of this new economic climate on arrears and possessions (see Chapter 6) . 12 Another important aspect of the context for the research is the changing regulatory landscape . Set up in December 2008, the Tenant Services Authority (TSA) is due to introduce a new regulatory regime for HAs in April 2010, with a new framework being rolled out for local authorities and ALMOs from the same date . An aspect of this new regime will be the introduction of the term “Registered Provider” in place of “Registered Social Landlord” (RSL) . Consistent with the title of the research, this report uses the term ‘housing association’ or the acronym HA . It should, however, be emphasised that our remit covered only HAs registered by the (former) Housing Corporation . Structure of the report In the remainder of this chapter we first outline the legal and regulatory framework for HA rent collection activity . This includes a summary of key official good practice messages published in the past few years . Next, follows an account of our research methodology . In Chapter 2, we review existing research and associated literature on 3 ODPM (2005) Sustainable Communities: Homes for All – A Five Year Plan from the Office of the Deputy Prime Minister; London: ODPM http://www .communities .gov .uk/archived/publications/corporate/homesforall 4 ODPM (2005) Improving the Effectiveness of Rent Arrears Management – Good Practice Guidance; London: ODPM http://www .communities .gov .uk/documents/housing/pdf/138886 .pdf 5 Ministry of Justice (2006) Pre-action Protocol for Possession Claims Based on Rent Arrears; http://www .justice .gov .uk/civil/procrules_fin/pdf/protocols/prot_rent .pdf
arrears management and related aspects of housing management activity . Chapters 3-6 then set out the findings of our own research . First, in chapter 3, we recount views of key national stakeholders on recent policy developments and on landlords’ management practices . Chapter 4 then reviews secondary data on arrears management performance and on the associated use of legal action . Chapters 5 and 6 summarise our empirical findings; from a national survey of associations and from six in-depth case studies focusing on individual associations (see Section 1 .3) . Conclusions are set out in Chapter 6, with findings from the eviction case file analysis detailed in Annex 1 . The remaining Annexes provide more detail on aspects of the research methodology and a profile of the case study HAs . 6 S 5(1), Housing Act 1988 . 1.2 Possession for rent arrears: the legal framework General The statutory framework within which they fall governs the security of tenure of all tenants of HAs . The interpretation of that framework is influenced by case law . Most such tenants have assured tenancies under the Housing Act 1988 . To obtain possession of a property let on an assured tenancy, a HA must obtain a court order, as with any landlord, unless the tenant determines the tenancy . 6 The landlord must serve a notice seeking possession, unless the court dispenses with that requirement . 7 The court can make an order for possession only on the basis of limited grounds contained in Schedule 2, Housing Act 1988 . In respect of rent arrears, there are three statutory grounds for possession: 8, 10, and 11 . Critically, Ground 8 is a mandatory ground – if the landlord proves its case, the court must grant possession . The only discretion is on the period within which the occupier is required to give up possession . 8 The other grounds for possession are discretionary and the landlord 7 S 8 (1), Housing Act 1988, although it should be noted that, where the landlord proceeds on the mandatory ground of rent arrears – Ground 8 – the court has no discretion to dispense with service: s 8(5) . 8 S 89, Housing Act 1980 . Rent arrears management practices in the housing association sector 13
Page 1 and 2: Rent arrears management practices i
Page 3 and 4: Contents Executive summary . . . .
Page 5 and 6: Executive summary Introduction This
Page 7 and 8: Key underlying factors were said to
Page 9 and 10: could, in part, reflect the growing
Page 11 and 12: overpayments and suspensions were p
Page 13: Chapter 1 Introduction 1.1 Backgrou
Page 17 and 18: “… there may occasionally be ci
Page 19 and 20: under Article 8 of the Convention,
Page 21 and 22: y HAs . 37 The Circular informed as
Page 23 and 24: Pre-action protocol for possession
Page 25 and 26: The purpose of these interviews was
Page 27 and 28: Table 1.1 - Case Study HAs Organisa
Page 29 and 30: Chapter 2 Rent arrears management p
Page 31 and 32: Pawson et al’s study found that 9
Page 33 and 34: 2.3 Rent arrears management practic
Page 35 and 36: this with any certainty . 69 Howeve
Page 37 and 38: authority can also lead to a lack o
Page 39 and 40: 2.5 The use of Ground 8 Although th
Page 41 and 42: In the Hunter et al study, 97 which
Page 43 and 44: some comment on the effect of the P
Page 45 and 46: • Ground 8 provided certainty to
Page 47 and 48: There was a difference of opinion a
Page 49 and 50: 3.3 The use of Ground 8 Whereas ans
Page 51 and 52: do so early enough, or at all . Cla
Page 53 and 54: Chapter 4 Rent collection and arrea
Page 55 and 56: 4.3 Housing Benefit service perform
Page 57 and 58: Table 4.3 - Housing association evi
Page 59 and 60: As shown in Figure 4 .1, CORE data
Page 61 and 62: were collected for landlords with l
Page 63 and 64: Most associations report initiating
Page 65 and 66:
5.2 Organisation of rent arrears ma
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Table 5.2 - Primary structure of ar
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Table 5.3 - Recent changes in organ
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Table 5.6 - Staff training provisio
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Within the transfer landlord cohort
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• Where arrears were accrued befo
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Table 5.9 - Estimated percentage of
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elatively high response rate achiev
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The survey sought to collect statis
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Ground 8 actions typically accounte
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How is the scale of Ground 8 use ch
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already routinely exercising the ac
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Chapter 6 Case study evidence Chapt
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Annex 2 outlines our method, includ
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a couple of weeks to three months)
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to officers and policies . Officers
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RM put it, “caused uproar from te
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preferred form of the organisation
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tenant contacts are now recorded on
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as a result, would make an order un
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use - in these cases, it is viewed
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g) The tenant perspective In each c
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Ground 8 was generally to scrutinis
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Ground 8 was said to be used as a
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The key stakeholders regarded the P
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ule it would not be used where HB w
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Table A1.1 - Evicted households by
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uncontactable as a result) . Where
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Just under half of all cases in the
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Annex 2 Case study HA selection Our
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Annex 3 Profile of case study housi
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However, after a review across its
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as developing joint working with th
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Annex 4 Case study topic guides HA
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19. What has been your recent exper
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12. How are your tenants helped wit
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9. If RSLs rely on Ground 8, what i
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4 Tenant employment circumstances (
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10 Value (£) of arrears at defined
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