Rent arrears management practices in the housing association sector

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tends to be higher following stock transfer, as the maintenance of cash flow becomes a key issue . The Commission also suggested that some associations operating in lower demand areas might perceive a greater incentive to avoid eviction, which could leave properties unoccupied . 56 Studies analysing the underlying causes of rent arrears have identified the following risk factors: low-income earners, households with children, people experiencing changes in employment status and single adult households (especially those with children) . Pressures within the sector have grown, as social housing has become more residualised and occupiers more marginalised . 57 However, two related issues are of particular note . First, HB payments to tenants of HAs and private landlords are made four weeks in arrears . This is regarded as a particular compounding issue, especially given the research finding that some associations took no account of this when making applications to court . 58 Secondly, there is little evidence to suggest that many tenants in 56 Audit Commission (2003), op cit . 57 Ford, J . and Seavers, J . (1998), op, cit .; Killeen, A . (2005), op cit . 58 Pawson et al, (2004), op .cit .; Audit Commission (2003), op cit . 30 rent arrears are unwilling to pay and much more evidence, which suggests that tenants would pay if they could . It should also be borne in mind that rent arrears are often only one form of debt among others, with debtors often actively juggling their finances in quite complex ways . Understanding payment decisions and motivations is rarely a straightforward endeavour, which suggests that there should be scrutiny of the arguments made by some that possession proceedings are necessary to overcome the problem of those who “won’t pay” . 59 Overall, understanding the reasons for arrears is a key factor in understanding how to maintain a tenant-focussed response to non-payment, as well as being the starting point for income maximisation and a holistic response to overall indebtedness . Although the factors leading to the accrual of arrears do not form the primary focus of this research, it is an important context for social landlords’ development of rent management practices including decisions by HAs on which Ground for possession on which to rely . 59 Dominy, N . and Kempson, E . (2003), Can’t Pay or Won’t Pay? A review of creditor and debtor approaches to the non-payment of bills, http://www .dca .gov .uk/research/2003/4-03es .htm
2.3 Rent arrears management practice Individual HAs are responsible for establishing and implementing their own policies and practices around rent arrears management . Existing research has identified a wide range of practice, but much effort of late focuses on prevention, possibly as a response to the Codes and guidance discussed above (para 1 .3) . Studies have shown that, when arrears occur, most landlords have some kind of numerical threshold – either number of weeks’ rent outstanding or the amount of arrears accrued – which triggers their initial response . 60 In this respect, arrears prevention and rent collection has been aided by the expansion and specialisation of HAs’ IT systems, 61 with better management information and automated monitoring . Earlier use of computerised management systems tended to result in automated responses insensitive to specific circumstances, with standard letters being sent at standardised trigger points . 62 By the early part of the current decade, however, a focus on prevention was beginning to reduce such practice, in favour of a more case-focussed approach . 63 It is not possible to calculate the impact of this focus on collection rates . However, it is worth considering the extent to which an association relies on automated procedures and whether this may influence the likelihood of possession action . Initial responses to arrears vary, from dispatching standard letters or making telephone calls, to personal visits and offers of income maximisation advice, sometimes in-house or sometimes by referral to outside agencies . 64 Even by 2002-03, email and text messaging had begun to be used by some associations and some landlords had a policy of making a home visit at this stage . Ford, J . and Seavers, J ., op cit; Gray, B ., Finch, H ., Prescott-Clarke, T ., Cameron, S ., Gilroy, R ., Kirby, K . and Mountford, J . (1994), Rent Arrears in Local Authorities and Housing Associations in England, London: HMSO; Kempson, E ., Bryson, A . and Rowlingson, K . (1994), Hard Times: How poor families make ends meet, London: Policy Studies Institute; Croft, J . (2001), Risk Crystallisation, Housing Debt and Social Exclusion, Unpublished PhD thesis, University of Bristol 60 Pawson et al (2004), op cit . 61 Ford, J . and Seavers, J . (1998), op cit . 62 Pawson et al (2004), op . cit .; Gray et al (1994), op cit . 63 Pawson et al (2004), op cit . 64 Pawson et al (2004), op cit .; Phelps, L . and Carter, M . (2008), op cit . Rent arrears management practices in the housing association sector 31
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 and 14: Chapter 1 Introduction 1.1 Backgrou
Page 15 and 16: arrears management and related aspe
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: Pawson et al’s study found that 9
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
Page 67 and 68: Table 5.2 - Primary structure of ar
Page 69 and 70: Table 5.3 - Recent changes in organ
Page 71 and 72: Table 5.6 - Staff training provisio
Page 73 and 74: Within the transfer landlord cohort
Page 75 and 76: • Where arrears were accrued befo
Page 77 and 78: Table 5.9 - Estimated percentage of
Page 79 and 80: elatively high response rate achiev
Page 81 and 82: 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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