11. Supporting information - Appendix 1 - Hierarchy of debts
Priority one: rent
Definition of debt
Unpaid rent for a current tenancy.
Reason for priority
Persistent unpaid rent will result in court action and possible eviction so paying rent arrears must be the first priority for the customer.
Initial arrears will be dealt with by contacts, calculating income and essential expenditure, agreeing payment promises and will escalate to legal action if the debt is not paid.
Priority two: court costs
Definition of debt
Court costs accrue when Gateshead Council takes legal action to obtain:
- a possession order
- warrant for eviction
- money judgement
- third party debt order
- attachment of earnings
Reason for priority
Unpaid court costs from possession action mean the original possession order is still valid even if the rent arrears have been cleared. The customer must clear the court costs in full to discharge the possession order.
Once rent arrears are cleared, the customer should pay an agreed regular sum to clear their court costs.
Priority three: rechargeable repairs
Definition of debt
A charge for repairs required as a result of customer damage or neglect to the council's property.
Reason for priority
Repairs may be withheld until payment is made which may impact on quality of life or the condition of the property.
Priority four: former tenant arrears
Definition of debt
Unpaid debt for a previous tenancy which includes:
- unpaid rent
- unpaid court costs
- unpaid garage rent
Reason for priority
We aim to recover all former tenant arrears where it is financially viable to do so. It is important customers clear this debt as they may be excluded from accessing Gateshead Council accommodation if they have outstanding debts.
If the debtor is not traceable, or the debt is not viable to recover or has been owed for over 6 years we will write off the former tenant arrears (see section 3).
If the debtor is subsequently traced or makes contact, then the written-off debt will be reinstated and pursued.
Before deciding to write off, the case may be referred to a debt agency for collection.
Priority five: garage arrears
Definition of debt
Unpaid rent for a garage tenancy.
Reason for priority
Garage tenancies will not be granted to applicants with priority one, two or three arrears, since this would divert funds needed to sustain their tenancy.
Whilst a customer has a garage tenancy their rent account must not accrue rent arrears.
If the garage rent account has more than five weeks' rent arrears, we will serve a Notice to Quit and terminate the garage tenancy. This will enable the customer to prioritise paying their rent and keeping their home.