Rent arrears management practices in the housing association sector

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and “traffic light” designations . It is deviation
from benchmark arrears figures, which would
affect whether a lender would be prepared to
lend to the association and the pricing of any
loan . No lender specifically requires associations
to use Ground 8, and its use may be prohibited
in standard LSVT agreements where “boilerplate”
documents are used . Associations may
“hide behind” the supposed effect on lenders .
Lender attitudes towards Ground 8 reform
are difficult to predict; their key requirement
will be that associations have the full range
of measures in place to manage arrears .
– Disentitling the use of Ground 8 by HAs may
have an impact on the lending environment
at a time when any impact on risk would be
of concern to lenders . Ground 8 provides
comfort to lenders because it offers a relatively
straightforward path to possession . Reform,
which makes it difficult to remove non-payers,
would be of concern to lenders as it may
undermine the financial viability of HAs .
As a result, it offers a useful tool for Has .
c. The rent arrears Pre-action Protocol narrows
the discretion of District Judges where the
association has complied with its terms, and this
should place a further burden on the tenant to
say why an order should not be made in favour
of the association . In these circumstances
the justification for Ground 8 as a means
of countering judicial indecision has been
weakened .
– The discretionary grounds for possession
for rent arrears lead to multiple (and costly)
suspensions of warrants for possession . The
most regularly cited example of this involved
a possession claim where there had been 17
suspensions of warrant . Questions were also
raised about the sustainability of tenancies where
a postponed possession order had been made .
d. When using Ground 8, associations are
“relentlessly going for an order” and are
inflexible .
– As a corollary of the certainty provided by
Ground 8, housing associations are able to bring
possession proceedings at a later stage allowing
for other interventions in the meantime, such
as money advice . In clear-cut cases, where a
tenancy is unsustainable, it is a useful tool .
e. Occupiers do not necessarily understand
the mandatory effect of Ground 8 and this
increases the chances of their losing their home
as a result of the claim . A defendant might be
better informed having sought advice but many
occupiers subject to possession claims do not