How To Manage Factoring In The Elderpark Housing Association

Transcription

1 FACTORING INVOICING AND ARREARS PROCEDURES Elderpark Housing Association November 2012

2 Factoring Invoicing and Arrears Procedures 1. Pre Invoicing Procedures. i) Management Charge and Insurance are specified within each property s deed of conditions and will be charged quarterly. Any changes in charges will be approved by Committee. These charges can be increased by giving the owners at least 14 days written notice of doing so. ii) iii) Cyclical Fund contributions are also stated within each property s deed of conditions and will be charged quarterly. Any increase or decrease in fund charges require to be consulted with owners before hand as per deed of conditions. In relation to updating IBS the following steps will be followed: TF will update details of service charges and contractual costs relating to factoring, sharing owners and rented tenants in February of each year. HM input these fixed charges in to the respective IBS packages in relation to sharing owners and owners. (see the table below) Maintenance will up date ad-hoc charges on IBS factoring as and when the job is complete or the invoice is passed for payment. (see the table below). Day to day repair will automatically be charged to owners factoring accounts provided that the repair is entered against the correct block.

3 Name SET UP AS A CLOSE and reviewed annually. Update d by Management fee Close HM Insurance Close HM Communal landscaping Garmouth Garden, Garmouth Street, 8-30 Uist St, Fairfield & Elder St/Greenfiled, Harhill Site Close HM Extractor Fan Maintenance Close HM Bulk up lift Close HM Close Cleaning Fortnightly and Weekly Close HM Backcourt gardening Close HM Name Fixed Charges, reviewed annually Laundry costs Fixed Charge HM Lift Sinking Fund Fixed Charges HM Lift Maintenance Contract. Fixed Charges HM Gas Usage of Communal Boiler Elder St Fixed Charges HM Name Adhoc Charges Main Close Painting Adhoc Charges Main Composition Flooring Adhoc Charges Main Landlord Supply Adhoc Charges Main Stair Lighting Adhoc Charges Main Gutter cleaning Tenemental 3 Storey Adhoc Charges Main Maintenance Communal Gas Boiler Elder St Adhoc Charges Main Guttering ( not 3 storey Tenemental) Adhoc Charges Main iv) The invoices which make up these bills will be available for inspection in the Maintenance Office. In order to administer this at least 48 hours notice for current bills and 7 working days for older bills will be required. 2. Invoicing All changes in ownership will be processed prior to a full invoice run. Invoices will be run on the IBS test system for checking prior to being issued Invoices will be sent to owners within 4 weeks of the period ends as follows Period End Invoices sent by 31 st December 31 st January

4 31 st March 31 st April 30 th June 31 st July 30 th September 31 st October Invoice Sample is attached (appendix 1). 3. Arrears Administration Arrears control is essential in maintaining an effective and efficient service to owners. There will be two areas of arrears administration: Standing Order / Direct Debits in order to maximise payment types. Arrears Control Standing Oder and Direct Debits Owners can pay by standing order and direct debit at any time. The payments will be calculated by the following: Arrears on Account if any Plus Estimation of Future annual bill Divided by The payment cycle, monthly, weekly etc.. This will be reviewed in March each year. Arrears Control The following procedures will be followed in relation to owners who do not participate in our budget scheme. 1. Bills will be prepared and posted and are due for payment 14 days after receipt. If no payment is received after 14 days Arrears Letter 1 will be sent (FAI ) 2. After a further 14 days if still no payments Arrears Letter 2 will be sent (FA2). Arrears steps 1 and 2 are self generated by IBS factoring arrears rules. Steps after the above are dependent on the level of debt.

5 If Debt is less than 200 the following steps should be followed. In Month 2 of debt (i.e. after 28 days since receipt) Arrears Letter 3 will be sent (FRA 3). Detailing that the Association may advise other owners in their block that they have defaulted on their payment and their arrears will be shared amongst the existing owners (joint and several liable). During month 3 Bill for the quarter will be prepared and posted and after 14 days of non payment the arrear can now join the arrears procedures as detailed below. 3. If no payment after above, then a solicitor s letter will be sent detailing our intention to raise a small claim action and informing the owner that they must contact our office to arrange payment. 4. If no payment received after 7 days of confirmation by the solicitor that they have sent letter, small claims action may be raised and lodged with the court In order to protect the interests of the Association the Housing Officer, based on their discretion, may decide to request the Solicitor to prepare a Notice of Potential Liability Of Costs (NPLC). The decision will be based on the level of the arrears, the amount of contact between the owner and the officer, and the length of time the owner has been in arrears. The NPLC lasts for 3 years unless it is re-registered and means that if the property is sold the buyer assumes liability for the debt. Alternatively, after seeking legal advice, an Inhibition may be raised on the property. An Inhibition stops the sale of the property. 5. Once debt reaches 750 the officer will ask the solicitor to prepare a Statutory Demand. If an agreement is not set up within 21 days a summary cause action must be raised for debt. 6. Once debt reaches 1500 (not including legal fees) then the Association can seek sequestration of the owner 8. Only once a Court decree has been granted can a wage or bank arrestment be sought. Officers will seek to obtain this information as part of arrears control process. 9. During the process of court action the officer will discuss appropriate diligences (civil legal recovery) with the solicitor. These include charges for payment, attachment, exceptional attachment earnings arrestment, arresting the rent which is paid by any tenant to an owner and bankruptcy.

6 10.00 Charges for Non Paying Customers. The Association will seek to give owners every opportunity to repay their debts by negotiating repayment plans based on the owners ability to pay. This will be supported by signposting owners to our money advice surgery, provided by Money Matters. However, when arrangements continual breakdown, where there is no contact by the owner, and /or where legal action is taken in compliance with this procedure, the Association will pass on the administrative costs of pursing court action and the actual legal charges to the non-payer. This will be based on the following: o If legal action has not been deemed expedient in terms of recovering the debt, but the debt is substantial, for example over or the owner was failed to contact the officer to set up an arrangement Letter 4 will be sent. The production of this letter should result in a administration fee. The decision to charge an administration fee will be at the discretion of the Housing Officer and may be removed should the owner has cleared their arrears as agreed. o Where a small claims action has resulted in a decree for expenses being awarded. The amount of expenses detailed on the decree will be added to the debt. Any future costs, accrued by the Solicitor or the Sheriff Officer in chasing the debt either through wage arrestment or attachment will be added to the debt. o Where legal action has been instigated but a decree has not been obtained. The actual costs will be added to the debt. This includes court costs where no decree was obtained or the legal costs of applying for a Notice of Potential Liability of Costs. 11 General Points on Arrears Control When entering into an agreement to clear the debt staff will endeavour to complete a Payment by Instalment Form detailing the amount of the instalments, when debt will be cleared and details of their employment. If this is completed over the phone a letter confirming the agreement will be issued. Court action may not be raised in any case for debt under 1500 unless you have good reason to consider that the Court decree will be able to be enforced. This would only be the case if you have details of a bank account, details of the debtors employers or details of a tenant to whom the debtor is renting out the property. Proposed changes in legislation may make it easier to trace debts bank account details. There it is felt that insufficient information is available to enforce a decree then the Housing Officer will lodge an NPLC. If the debt is over 1500 then it would be worthwhile taking Court action so that thereafter once decree has been granted it would be

7 possible to take bankruptcy proceedings and recover the costs involved from any equity in the house. Staff will update the stages in the arrears on IBS. Staff will use Registers Direct to identify the home address of owners who rent the property which we factor. Initially staff will use letter 2 & 3, as a means to encourage owners to set up agreement. If an agreement is in place the Association will not take debt recovery court action. Where there is a dispute over bills and or amounts within a bill, this amount will be deducted from the arrear until such times as is resolved. The Association will seek payment of any amounts not in dispute as per procedures above. Flexibility in arrears control is important because of the nature of dealing with people and also because there are varies legal remedies available to recover the debt. It is important that detailed diary notes are kept and reviewed regularly. Legal action case will be reviewed by the Committee in a yearly report.

8 Factoring Arrears Flow Chart Prepare Bills If no payment after 14 days Arrears Letter 1 Debt Less than 150 Letter 3 sent in month 2 of debt If no payment after a further 14 days Arrears Letter 2 Debt higher than 200 Raise small claims action or NPLC Solicitor Letter Court Decree Once debt over 750 raise summary cause action Charge for payment. Wage/bank /rent Arrestment. Attachment or Bankruptcy steps may be take to settle debt Once Debt Reaches 1500 raise sequestration and or Inhibition