CORPORATE DEBT POLICY

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1 CORPORATE DEBT POLICY Reference: HSL/CDP/JE/06 Approved: 28/03/07 Revised: 1 Statement of Intent 1.1 The intention of the corporate debt policy is to set a clear over-arching statement on how the Housing Solutions Group (the Group) will administer and collect all monies due from its customers. 1.2 This policy covers all income and charges due from individual customers of the Group and its subsidiaries. That is our tenants, leaseholders, shared owners and users of our community assistance services such as lifeline. 1.3 The Group expects that all customers make full and timely payments for services received as the efficient collection of all monies due is essential to the financial viability of the Group. 1.4 The Group recognises that many of its customers face a range of difficulties in making regular payments of charges due and will work closely with these individuals and other agencies to ensure that appropriate support and assistance is provided to help ensure that payment difficulties are kept to a minimum and proportionate action is taken to recover unpaid monies. 1.5 This policy does not cover monies due from non-core customer debtors, for instance contractors, business lessees, suppliers and partners. 1.6 This policy covers the following Group members: Bridgewater Housing Association Limited; Furnival, and; Maidenhead & District Housing Association. 2 Aims 2.1 The aims of the corporate debt policy are to ensure that: All monies due from the Group s customers are collected; All customers are treated fairly within the framework of collection and recovery activity for each service area; A wide range of convenient means of making payments are provided; Customers are supported in their efforts to maintain regular payments where 1

2 appropriate; Customers identified as having vulnerabilities which may impact on their ability to make regular payments are offered tailored assistance where appropriate; All customers are supported when necessary in an attempt to promote secure tenancies, homes and communities; Appropriate external agencies are involved in activities designed to promote regular payments and the recovery of outstanding monies due; Legal action to recover customer debts will be taken only where other reasonable efforts to ensure payment have been attempted, and; Possession action will only be taken where there is no other reasonable legal alternative. 3 Related Polices 3.1 The Corporate Debt Policy relates to the following Group policies: Equality & Diversity; Leasehold and Shared Ownership Management; Rent Arrears, and; Response Repairs and Cyclical Maintenance. 4 Who is covered by the Corporate Debt Policy? 4.1 The following Groups of customers are covered by the corporate debt policy: Tenants; Leaseholders; Shared owners, and; Lifeline users. 5 What charges are covered by the Corporate Debt Policy? 5.1 The following charges are covered by the corporate debt policy; Rent (excluding market rents); Tenancy service and utility charges; Leasehold / shared owner annual service charges; Leasehold / shared owner major repairs and improvement charges; Supporting people charges; Lifeline charges; Repair re-charges Legal costs, and; Garages (where the tenant is also a tenant or leaseholder / shared owner of the Group). 2

3 6 Delivery of the Corporate Debt Policy 6.1 Principles The Group aims to substantially reduce the level of all debt in a way that will contribute to the sustainability of the area by applying the following principles; Early Contact. Every opportunity will be used to make debtors aware of the Group s sympathetic, common sense and realistic approach to debt. Co-ordinated Action. The essential exchange of information between departments to ensure that co-ordinated action is taken which recognises the importance of priority debts internally and externally. Money Advice Provision. The Groups ability to provide money advice both internally and by referral to money advice services in the voluntary sector. 6.2 Culture The Group aims to promote a culture where customers value both their homes and the services we provide and this is reflected in their willingness to pay. This will be achieved by: Working towards the achievement of excellence in customer service; Promoting both the rights and responsibilities of being a tenant or leaseholder through unambiguous and consistent messages and actions, and through regular and clear information; Combining the use of sanctions against those who do not pay with rewarding those who consistently do, and; Improving customer focus, consultation with stakeholders and levels of resident involvement. 6.3 Staff The Group aims to continuously develop high quality staff, with clear goals and priorities to deliver services and who are both respected and valued by customers. This will be achieved by: Providing staff with the knowledge and understanding of the impact of debt on both individuals and service delivery within the organisation and enabling them to deal more comprehensively with issues of debt recovery through encouraging partnership working with both internal departments and external organisations; Providing staff with clear and concise procedures to be followed so that debt recovery is approached in a consistent manner; Involving staff in developing tools and processes with which they can provide high quality and effective yet sensitive debt recovery services; Sharing individual and team good practice to encourage consistently high standards across the Group; 3

4 Supporting staff in their duties through performance appraisal, review of management structures and through a comprehensive training programme, and; Achieving standards of delivery that meet the requirements of quality accreditation schemes such as Chartermark. 6.4 Recovery Procedures 6.5 The Group is committed to approaching debt recovery in a consistent and unambiguous way and to ensuring that all debtors understand the consequences of non-payment. Accordingly the recovery procedures followed must: Be sufficiently effective to ensure that whenever they have the means, people do pay their debts and are not able to avoid their obligations; Acknowledge the debtor s obligations and responsibilities to their dependants; Effectively distinguish between those who cannot pay their debts and those who will not; Allow for the proper consideration of debtors circumstances and provide sensible and realistic arrangements for those who genuinely need time to pay their debts; Protect debtors and their families from harassment and undue hardship; Attempt to assist the debtor in sorting out debt problems before they escalate out of control; Attempt to reach an agreement without resorting to action that might result in exacerbation of the debt situation; Be efficient and cost effective; Recognise and protect the debtor s rights at every stage of the process; Provide for timely money advice referral where early contact has identified financial difficulty, and; Accept that in some cases there is no prospect of the debt being paid. 7 Prioritising Debts Internally 7.1 A key aspect of the corporate debt policy is that the Group should prioritise recovery action where there are multiple debts owed to the Group by customers. 7.2 The following guidance should be applied when prioritising debts owed to the Group: Debts directly affecting the security of tenure of the customers home should be prioritised first in all instances; The size of each debt should be considered with the largest being prioritised subsequent to the above criteria, and; Debts related to essential support services should then also be prioritised. 4

5 8 Prioritising Debts Externally 8.1 It is recognised that many customers who get into debt with the Group are also in debt with a wide range of other, external creditors (e.g. Council Tax, credit cards, hire purchase, bank loans, mortgages and non-high street lenders). 8.2 When negotiating debt repayments the Group acknowledges that it must take into account the debtors responsibilities to other creditors. 8.3 When counselling a debtor the Group will advise then to prioritise their debts. The Group will expect that debts that can affect security of tenure (rent arrears and service charges) always be regarded as high priority alongside mortgages and utilities. 8.4 As a general principal the Group expects that other debts be considered as a lower priority (e.g. credit cards, bank loans) as these cannot affect security of tenure. 8.5 However in all complex cases the Group will positively encourage the debtor to seek external, independent professional advice to assist them in managing their debts. 9 Equality and Diversity 9.1 Housing Solutions Group is committed to a policy of fair treatment for all its members, tenants, employees and applicants, regardless of religion, sexual orientation, age, class, racial origin, sex, disability or marital status as determined in the Equality & Diversity Strategy. 10 Review 10.1 This policy will be reviewed on a three yearly basis or in response to changes in legislation, regulatory guidance, good practice or changes in other relevant Housing Solutions Group policy. 5