SC CORPORATE DEBT POLICY, CURRENT TENANT DEBT POLICIES POLICY OWNER: SERVICE MANAGER KEY 2.0 DEFINITIONS 2

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1 FORMER TENANTS DEBT STATUS VERSION 1 APPROVED BY: LANDLORD SERVICES MT Date LANDLORD SERVICES Date SHADOW CHALLENGE BOARD DATE DUE FOR AUGUST 2014 REVIEW OUTCOME OF REVIEW N/A SERVICE RESOURCES, HOUSING OPTIONS RELATIONSHIPS: LINKED SC CORPORATE DEBT POLICY, CURRENT TENANT DEBT POLICIES POLICY OWNER: SERVICE MANAGER KEY LS08c, LS08e, LS08f, LS08g PERFORMANCE AREAS: 1.0 CONTENTS 2.0 DEFINITIONS OBJECTIVES, AIMS AND PRINCIPLES Objective Objective Objective Objective Aims and principles of former tenant debt recovery ROLE OF MANAGERS KEY ISSUES FOR POLICY IMPLEMENTATION REFERENCES 7 Former tenants debt Page 1 of 18

2 2.0 DEFINITIONS Former Tenant debt: Debts to the Council generated by failure of tenants to pay for rent, repairs or remedial works. They do not include outstanding debts for service charges or for maintenance works to leasehold or commercial properties OBJECTIVES, AIMS and PRINCIPLES Objectives of the Former Tenant Debt Policy Shropshire Council recognises that the maximisation of former tenant rental income and other debt through the operation of appropriate and cost effective management is fundamental to the success of service delivery and customer satisfaction. The Council cabinet approved a Transforming Landlord Services report in January 2012 to consider the future management arrangements for council housing. In order to achieve the best outcomes for both parties the Council will work with tenants to help prevent them building rent debt as well as other associated debt by: ensuring tenants are made aware of their ongoing rent and repair responsibilities before, during and after tenancy termination; informing them of debt at the earliest opportunity with methods of remedy; provide a range of payment options and repayment plans along with appropriate information concerning their account to support them in building their capacity to manage their personal budgets; support tenants and former tenants in their responsibilities in a way which is sensitive to their individual circumstances; ensure all tenants have access to advice and support including direct referral to welfare and debt counselling services to manage debt and maximise income. Former tenants debt Page 2 of 28

3 Objective 1 To take prompt preventative action to minimise the level of tenant and former tenant debt. The Council will ensure that it will improve performance and support its customers through the operation of clear, accessible and successful procedures including open service standards so that those in debt understand the support provided but also the processes that the Council may instigate to recover debt. During the tenancy the Council will attempt to minimise the potential for former tenant debt by taking decisive action to prevent debt arising. Where debt has occurred we will work with the tenant to, where possible, clear the debt before the tenancy ends. However while the recovery of former tenant debt by any social landlord can be difficult, sometimes costly and often unsuccessful, nonetheless if the whereabouts of a former tenant is known or can be found we will begin recovery action. The Council will take account of individual circumstances to give departing and former tenants an opportunity to agree a repayment plan taking into account their personal circumstances and assistance will be given proactively to access debt advice agencies. However these agreements will be time limited and not simply a method of delaying payment. The Council will review the outcome of each stage of the recovery process and decide on any further action dependent on the level of debt, economic viability of pursuing the debt and likelihood of recovery. This may include the employment of accredited debt recovery agencies and other such businesses in an attempt to trace the whereabouts of former tenants in debt or recover debt itself. All legal remedies available to the Council will be considered to recover the debt. There may be cases where it is appropriate to temporarily suspend recovery action to enable support services, family or carers to intervene as part of the Councils commitment to help vulnerable individuals or families. Where this occurs the suspension will be regularly monitored and reviewed. Objective 2 To reduce former tenant debt through recognition of individual circumstances and application of individual solutions. To assist in the recovery of former tenant debt the Council will invest in effective performance management and IT systems to Former tenants debt Page 3 of 38

4 ensure efficient working by staff and minimise any opportunity for unattended debt. Process mapping, detailed procedure notes and training will be provided for tenant representatives and staff. Some debts may be difficult to collect and writing off certain debts may be the most economical solution, however this will not normally be recommended until other options for recovery have been exhausted. Through debt prevention and recovery work with current tenants the aim is to control the level of debt before termination. However, to ensure debt management is an efficient and effective process we will write-off all debts considered inappropriate, irrecoverable or uneconomic to pursue. All debt written-off because the debtor is untraceable will be entered in the Bad Debts Register as appropriate and recorded against the former tenancy. The debt can be reinstated at a later date if the whereabouts of a former tenant becomes known. We will ensure that individual circumstances are taken into account when making repayment arrangements to ensure that they are realistic and affordable and to enable the customer to settle their debt in a controlled and time bound manner. Any such arrangements will be regularly monitored and reviewed. Where a customer has former tenant debt and has applied for re-housing by Shropshire Council their application may be suspended until such time as an acceptable repayment arrangement has been agreed. Objective 3 To work efficiently and effectively to reduce former tenants debt. The Council is committed to the collection of all tenant debt for both current and former tenancies. Robust policies and procedures are in place for current tenants to ensure early intervention and support tailored to the individual when debts start to accrue. This in turn ensures that the level of former tenant debt arising when a tenancy ends is minimised as much as possible. Where the Council are aware of the whereabouts of the former tenant and the procedure has been exhausted to pursue them for payment of the debt without success, the option of full and final settlement may be considered on a case by case basis. Where a debt is over 6 years old and all available avenues have been exhausted to collect the outstanding debt and where no payment has been received, the Council will write off the outstanding balance. Where a tenant is deceased leaving former tenant debt their estate Former tenants debt Page 4 of 48

5 becomes liable for the outstanding debt. Should there not be an estate or should there not be sufficient monies in the estate to satisfy the outstanding debt the balance will be written off. Where a debt has been written off there will be the facility to reinstate the debt should the tenant be in a position to commence payments off the debt. Reinstatement can be actioned at any time. Objective 4 To ensure that the Council is clear about how it will deal with the collection of former tenant debt Publicity can help to prevent rent debt by ensuring that tenants know it is taken seriously. The Council will promote its commitment to the collection of rent debt in the following ways: Via the Council website In conjunction with partner agencies such as the CAB Via leaflets and posters displayed in public buildings By raising the profile of rent payment at every contact with customers both face to face and over the phone. By using the local media to promote the payment of rent, particularly at keys times of non payment such as prior to Christmas or in the Summer holidays Publicise where tenants can get help The Council will work with partner agencies and signpost tenants in need of assistance in dealing with rent debt to a variety of sources such as: Citizen s Advice Bureau National Debtline Shropshire Joint Team Money Advice Trust Community Legal Advice SUSTAIN Credit Unions We will publicise our approach to the collection of rent debt in our service standards. We will also produce leaflets detailing what we will do if a customer has former tenant debt and also advise them where they may go to for help and assistance. We will ensure that advice and assistance is offered at each stage of the recovery process to signpost tenants to the relevant agencies to support them in dealing with their debt. Currently the Council works with the Citizen s Advice Bureau via a formal referral service to enable our tenants to receive general Former tenants debt Page 5 of 8 5

6 advice and support as regards debt problems. We will also ensure that vulnerable tenants are treated fairly and compassionately at all times and offered (where appropriate) referral to relevant support agencies AIM AND PRINCIPLES OF FORMER TENANT DEBT MANAGEMENT The key aim is to maximise income and reduce debt for the service so that there is the maximum sum available to invest in homes and services. We will do this through: timely information to prospective tenants of their responsibilities to pay; tailored support to tenants to pay their rent and other charges; robust processes to monitor, intervene and recover debt. Former tenants debt Page 6 of 68

7 ROLE OF MANAGERS Managers within the Service are critical to the success of maximising income and minimising debt of former tenants. As part of their commitment to a performance culture and minimising the risks to customers of ill-managed debt managers should: Know how their team and others are performing against inhouse targets and standards, best practice and national top quartile performance; Intervene throughout the process as is necessary with training, supervision and innovation to reach top quartile levels. Average or poor performance levels are not acceptable and staff must be made fully aware of the performance management framework and the relevant key performance indicators. As consideration of personal circumstances when finding solutions for tenants and former tenants is crucial, managers must ensure that the principles of the Council s approach to equality and diversity and customer care are applied in all cases KEY ISSUES FOR POLICY IMPLEMENTATION To minimise debt from those exiting Council tenure there is a requirement for performance in a number of activities to be excellent if the Council is to achieve top quartile performance. These are as follows: effective accounting, recording, Housing Benefit and IT management systems; staff at all levels who are knowledgeable, committed and efficient in their work; close partnership working across relevant Council services, the Courts Service and voluntary agencies; adherence to policies on equality/diversity and customer care. 6.0 REFERENCES Housing Act 1985 Landlord Services Service Standards Transforming Housing Landlord Services 2012 Former tenants debt Page 7 of 78

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