11. Supporting information - Appendix 2 - Arrears prevention and recovery procedures
New tenants will usually be given an introductory tenancy. This usually lasts for 12 months and will automatically become a secure tenancy, unless the introductory tenancy has been extended for a further 6 months if the obligations in the agreement have not been complied with, or if court proceedings have commenced.
Introductory tenancies
The New Tenancy team conduct tenancy sign-ups for all new tenants. This ensures that the tenancy gets off to the best possible start with any tenancy sustainment barriers identified and support put in place from day one. At times, we can get support in place even before the tenancy begins. A New Tenancy Officer will then manage the introductory rent account for the first 12 months. After the first 12 months a tenancy will become secure and move onto the Secure team to manage.
Support for residents:
All efforts are made to ensure a resident has in place what they need to help them sustain a tenancy. This support is explored for the lifetime of the tenancy and revisited at every contact with a resident. Support is available for residents regardless of if they have rent arrears or not. If someone is in rent arrears, a rent officer will make contact attempts with a resident who has missed or underpaid. They will in the first instance try to ascertain why. A tool that we use to do that is an income and expenditure check. It allows us to ascertain payment ability, what level of arrangement is suitable and helps us identify what support is needed. Areas that we identify for support via an income and expenditure check could include:
- not receiving the correct level of income or benefits
- income maximising opportunity
- high energy or food costs
- unsustainable debt repayment to creditors
- potential loan shark activity
Once support areas have been identified, support referrals are made, or residents are passed to the Advice and Support team or Debt Advice team to help with:
- benefit checks to make sure that the correct level and elements of benefits are being received (income maximisation)
- help to claim benefits
- help to appeal benefit decisions
- help to make a Crisis and Resilience Housing Payment application to help with the under-occupation charge (bedroom tax)
- budgeting support
- grant applications to help reduce water rate charges
- grant applications to help with rent arrears, debts, furniture, or white goods
- energy efficiency and usage advice
- emergency fuel top-ups
- food support
- employment referral to help moving closer to or gaining employment
- help with debts including help to make repayment offers to creditors, contacting creditors on resident's behalf, then as a last resort arranging a DRO or bankruptcy.
- refer on for longer term support for areas such as GP or mental-health support, long-term tenancy support and legal advice with organisations such as Citizens Advice and 2 Way Tenancy Solutions
- Debt Respite Scheme (Breathing Space)
Breathing Space is a Government-backed scheme that gives people in problem debt temporary protection from most creditor action, interest and charges, allowing time to seek advice and start a plan for recovery. Only an approved debt advice provider can place someone into Breathing Space. If you have entered Breathing Space, please let the rent team know the information including which debt advice provider you are working with.
Escalation:
The introductory tenancy escalation process consists of a mixture of letters, notices, contacts, home visits and support actions.
In total, there are 8 letters (including a notice and witness statements for court). These letters are:
- introductory reminder letter
- introductory warning letter
- income and expenditure letter
- debt advice letter
- pre notice of termination
- 6-month extension
- notice of termination
- court witness statement
- eviction date set
Arrangements
Residents will be given multiple suitable arrangements depending on their circumstances. Even at the point after we serve a witness statement, if the resident makes contact and offers a suitable arrangement, we would advise the court of that at the hearing and that it is satisfactory to us.
In some circumstances, even if a resident elects not to engage with us or make payments, we will still endeavour to sustain the tenancy by applying to the Department for Work and Pensions to get the housing cost and payment towards the arrears paid direct to us. This is only successful when a resident is in receipt of certain benefits. With Universal Credit, for example, we are able to apply for direct costs (an APA) via the UC landlord portal that we have access to. The DWP will then deduct these costs from the resident's benefit payment before they send a payment to the resident.
Vulnerability checks
At several stages in the escalation, we will carry out a vulnerability check. For this we will contact adult social care to ascertain if they were aware of any issues or had a case on the resident. If there are children in the household, we will also contact children's social care. These checks are done before we make a court application and before we proceed to evict. If we suspect issues, we will also carry out these checks before we serve a Notice of Termination. We also liaise with other internal departments (for example, the relevant Housing Officer) to try and understand the residents' and household circumstances.
Extension
If a tenant has not managed their rent account acceptably but there are positive signs they will, we will serve a document on the tenant advising them that we will be extending the introductory tenancy by a further 6 months. This is for them to demonstrate that they will make appropriate payments and reduce the arrears. Before the 6-month period has elapsed, if they do not demonstrate that, we will serve a Notice of Termination on the tenancy. If they have demonstrated making payments and reducing the arrears, the tenancy will become secure.
Notice of Termination
When a tenant receives a Notice of Termination, if they do not appeal it within the review period, this effectively ends the tenancy as the court must grant us possession of the property. The tenant can appeal to Gateshead Council when a notice is served and a review date will be set. A panel will listen to the tenants' mitigations and decide to either dismiss the appeal or allow a stay. The panel is normally made up of a legal representative of Gateshead Council as well as ward members.
When an appeal is dismissed, a court application will be made and at a hearing we will be awarded possession of the property. The tenant has no rights of appeal and cannot appeal the eviction.
Prior to applying for an eviction date, a referral will be made to the Housing Options team. This is to allow that team time to make contact with the resident and outline their housing options and what would happen if they were evicted. 4 weeks after the referral is made to Housing Options, the Rent and Income Service Manager, Legal Recovery Manager and the Housing Options Manager attend an eviction prevention meeting to discuss the referral outcomes and agree a way forward.
Secure tenancies
Support for residents
All efforts are made to ensure a resident has in place what they need to help them sustain a tenancy. This support is explored for the lifetime of the tenancy and revisited at every contact with a resident. Support is available for residents regardless of if they have rent arrears or not. If someone is in rent arrears, a rent officer will make contact attempts with a resident who has missed or underpaid. They will in the first instance try to ascertain why. A tool that we use to do that is an income and expenditure check. It allows us to ascertain payment ability, what level of arrangement is suitable and helps us identify what support is needed. Areas that we identify for support via an income and expenditure could include:
- not receiving the correct level of income or benefits
- income maximising opportunity
- high energy or food costs
- unsustainable debt repayment to creditors
- potential loan shark activity
Once support areas have been identified, support referrals are made, or residents are passed to the Advice and Support team or Debt Advice team to help with:
- benefit checks to make sure that the correct level/elements of benefits are being received (income maximisation)
- help to claim benefits
- help to appeal benefit decisions
- help to make a Crisis and Resilience Housing Payment application to help with the under-occupation charge (bedroom tax)
- budgeting support
- grant applications to help reduce water rate charges
- grant applications to help with rent arrears, debts, furniture or white goods
- energy efficiency and usage advice
- emergency fuel top ups
- food support
- employment referral to help moving closer to or gaining employment
- help with debts including help to make repayment offers to creditors, contacting creditors on resident's behalf, then as a last resort arranging a DRO or bankruptcy
- refer on for longer-term support for areas such as GP or mental-health support, long-term tenancy support and legal advice with organisations such as Citizens Advice and 2 Way Tenancy Solutions
- Debt Respite Scheme (Breathing Space)
Breathing Space is a Government-backed scheme that gives people in problem debt temporary protection from most creditor action, interest and charges, allowing time to seek advice and start a plan for recovery. Only an approved debt advice provider can place someone into Breathing Space. If you have entered Breathing Space, please let the rent team know the information including which debt advice provider you are working with.
Escalation
The secure escalation process consists of a mixture of letters, notices, contacts, home visits and support actions.
In total, pre court there are 7 letters (including a notice and witness statements for court). These letters are:
- secure reminder letter
- secure warning
- notice of seeking possession (must owe 8 weeks' rent before being served)
- secure court warning letter
- secure court application letter
- pre-court letter
- secure witness statement
All the escalation letters are interspersed with attempts to contact the resident. These are normally telephone contacts, texts messages, leaving a voicemail, home visits and sending an email. There are no limitations on the number of contacts we will attempt. Our housing management system (NEC) will present accounts to a rent officer with a suggested action. The frequency of these events or actions can depend on the resident's payment frequency. For instance, if a resident has said that they will pay their rent monthly, if no payment or a short payment is made, the system will present an action for an officer a week after the payment was due. So if a resident had an arrangement to pay on the 1st of the month, but did not make the payment, the following Monday the account will be in an officer's workflow to look at. All actions can be deleted, backstepped or authorised by officer discretion. The timescale of an account passing through the escalation policy could be months or several years, depending on customer engagement, payments, and payment arrangements.
Home visits
Residents will have at least 3 home visits before court stage. The Notice of Seeking Possession and the Secure Witness statements are hand delivered.
Arrangements
Residents will be given multiple suitable arrangements depending on their circumstances. Even after we serve a witness statement, if the resident makes contact and offers a suitable arrangement, we would advise the court of that at the hearing and that it is satisfactory to us.
In some circumstances, even if a resident elects not to engage with us or make payments, we will still endeavour to sustain the tenancy by applying to the Department for Work and Pensions to get the housing cost and payment towards the arrears paid direct to us. This is only successful when a resident is in receipt of certain benefits. With Universal Credit, for example, we are able to apply for direct costs (an APA) via the UC landlord portal that we have access to. The DWP will then deduct these costs from the resident's benefit payment before they send a payment to the resident.
Vulnerability checks
At several stages in the escalation, we will carry out a vulnerability check. For this we will contact adult social care to ascertain if they were aware of any issues or had a case on the resident. If there are children in the household, we will also contact children's social care. These checks are done before we make a court application and before we proceed to evict. If we suspect issues, we will also carry out these checks before we serve a notice of seeking possession. We also liaise with other internal departments (for example, the relevant Housing Officer) to try and understand the residents' and household circumstances.
From the point where a court application is imminent, at every opportunity, we strongly encourage residents to seek independent legal advice - normally with Citizens Advice Gateshead.
Post-court
Once a court order is obtained, the responsibility for managing the account passes from an officer to a team leader.
The escalation post court consists of 3 letters:
- court non-compliance letter
- secure pre-eviction letter
- eviction date set
As with the pre-court escalation, these letters are interspersed with contacts and home visits. Actions are suggestions and the team leader can authorise, delete or backstep at their discretion. Support opportunities will also be explored exactly the same as the pre-court escalation.
Prior to applying for an eviction date, a referral will be made to the Housing Options team. This is to allow that team time to make contact with the resident and outline their housing options and what would happen if they were evicted. 4 weeks after the referral is made to housing options, the Rent and Income Service Manager, Legal Recovery Manager and the Housing Options Manager attend an eviction prevention meeting to discuss the referral outcomes and agree a way forward.
If an eviction date is applied for, the resident can still speak to us and make a repayment offer. They can also lodge an appeal at court stay the eviction. Free legal advice and representation is available at court via Citizens Advice.
Usually there is no limit on the number of times a resident can appeal evictions that have been set. We have, for example, had cases where court hearings have taken place on up to 20 occasions. A resident can also request that the court vary the terms of the court order. This can be varying the type of order from an immediate order to a suspended one or varying the amount they need to repay each week.
Former tenant rent accounts
Former tenant collection is lower down in the hierarchy of priority order of accounts to collect. For example, if a resident has a current account, that will always be prioritised over former tenant collection.
We will still make sure, however, that all efforts are made to ensure a resident has support in place to help them make payments towards former tenant debts.
Support for residents
All efforts are made to ensure a resident has in place what they need to help them sustain a tenancy. This support is explored for the lifetime of the tenancy and revisited at every contact with a resident. Support is available for residents regardless of if they have rent arrears or not. If someone is in rent arrears, a rent officer will attempt to contact them. They will in the first instance try to ascertain why they have missed a payment or underpaid. A tool that we use to do that is an income and expenditure check. It allows us to ascertain payment ability, what level of arrangement is suitable and helps us identify what support is needed. Areas that we identify for support via an income and expenditure check could include:
- not receiving the correct level of income or benefits
- income maximising opportunity
- high energy or food costs
- unsustainable debt repayment to creditors
- potential loan shark activity
Once support areas have been identified, support referrals are made, or residents are passed to the Advice and Support team or Debt Advice team to help with:
- benefit checks to make sure that the correct level and elements of benefits are being received (income maximisation)
- help to claim benefits
- help to appeal benefit decisions
- help to make a Crisis and Resilience Housing Payment application to help with the under-occupation charge (bedroom tax)
- budgeting support
- grant applications to help reduce water rate charges
- rant applications to help with rent arrears, debts, furniture, or white goods
- energy efficiency and usage advice
- emergency fuel top-ups
- food support
- employment referral to help moving closer to or gaining employment
- help with debts including help to make repayment offers to creditors, contacting creditors on resident's behalf, then as a last resort arranging a DRO or bankruptcy
- refer on for longer-term support for areas such as GP or mental-health support, long-term tenancy support and legal advice with organisations such as Citizens Advice and 2 Way Tenancy Solutions
Escalation
The former tenant escalation process consists of a mixture of letters, contacts, and the use of external organisations for tracing and collection.
In total, there are 6 letters. These letters are:
- informed tenant of balance
- former tenant letter 1
- former tenant letter 2
- former tenant letter 3
- former tenant letter 4
- debt collection agency notification
As with other escalation, these letters are interspersed with contacts. Actions are suggestions and the officer can authorise, delete or backstep at their discretion. Support opportunities will also be explored exactly the same as other escalations.
When we exhaust our internal collection process, an account with a forwarding address can be passed to an external debt collector for collection. If a debt collection agency attempts collection but are unsuccessful, the debt will be passed for write-off.
If a debt is written off, it can be written back on at any point in the future. This can happen in instances when people come back for re-housing many years later. With this being the case, we can collect balances on accounts that are in some instances 20 years old.
Accounts without a forwarding address
If we have an account and have no forwarding address for the former occupant(s), we will attempt to contact the former occupant(s). If this is unsuccessful, we will attempt to trace them. We do this by checking our internal systems.
If our internal tracing attempts are negative, we will pass the account to an external tracing agent for them to carry out a trace using credit reference agencies, and so on. Once the tracing agent has passed the results back to us, any accounts where a forwarding address has been located are updated and pursued. Any negative trace result accounts are passed for write-off.
Arrangements
Residents will be given multiple suitable arrangements depending on their circumstances.
Garage rent accounts
Garage accounts are for residents who have rented a garage from the council to store their vehicles in. Residents can have multiple garage accounts. They are also available to non-council residents.
Escalation
The garage escalation process consists of a mixture of letters, contacts, and home visits. In total there are 3 letters, which are:
- garage letter 1
- garage letter 2
- notice to quit
As with other escalation, these letters are interspersed with contacts. Actions are suggestions and the officer can authorise, delete or backstep at their discretion. Support opportunities will also be explored exactly the same as other escalation. We will encourage residents who have current tenant arrears to prioritise those over garage accounts and advise them to give up garage accounts to enable them to maintain rent payments on their home.
After a notice to quit is issued on the garage, if the account is not cleared, a lock change will be actioned, and we will take back the garage.
Rechargeable repairs
Rechargeable repair accounts are created when a repair is carried out at a resident's property, but the repair is not due to wear and tear. An account can also be created in instances where a furniture pack has been damaged or items of it are missing.
Escalation
The rechargeable repair escalation process consists of a mixture of letters and contacts. In total there are 3 letters, which are:
- recharge repair acknowledgement letter
- rechargeable repair balance outstanding letter 1
- rechargeable repair balance outstanding letter 2
As with other escalation, these letters are interspersed with contacts. Actions are suggestions and the officer can authorise, delete or backstep at their discretion. Support opportunities will also be explored exactly the same as other escalations.
The escalation can loop back to the beginning of itself so that regular reminders are issued to the resident reminding them of the balance on the account. When a resident has left the property, and the former tenant rent account collection has been exhausted and (for example) written off, an officer can also pass the recharge account for write-off.
Court costs
Court cost accounts are created when a resident has court action taken against them and the court awards costs of the hearing to Gateshead Council.
We would prioritise collection of current rent accounts over court cost collection.
Escalation
The court cost escalation process consists of a mixture of letters and contacts. In total there are 3 letters, which are:
- court costs letter 1
- court costs letter 2
- court costs letter 3
As with other escalations, these letters are interspersed with contacts. Actions are suggestions and the officer can authorise, delete or backstep at their discretion. Support opportunities will also be explored exactly the same as other escalations.
The escalation can be set to the beginning of itself so that regular reminders are issued to the resident reminding them of the balance on the account. When a resident has left the property, and the former tenant rent account collection has been exhausted and (for example) written off, an officer can also pass the court cost count for write off.
Payment methods
For all account types, payments can be made via the following:
- Direct Debit
- standing order
- online payments
- card payments over the phone
- direct deduction from benefits
- 24-hour card payment line
- post office
- pay point
- wages deductions (council employees only)
Multiple payment methods can be accepted on accounts at the same time. For example, a tenant could have a Direct Debit set up as well as a direct deduction from their benefit. Direct Debits may not be accepted on accounts where 2 Direct Debits have been returned not paid.