Government of Jersey

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A decision made (10/01/2007) regarding: Arrears Policy - Approval.

Subject:	Arrears Policy - Approval
Decision Reference:	MD-H-2007-0005		Exempt clause(s):
Type of Report: (oral or written)	Oral		Person Giving Report (if oral):	Carl B Mavity, Director of Estate Services
Telephone or e-mail Meeting?			Report File ref:
Written report – Title
Written report – Author (name and job title)	Carl B Mavity, Director of Estate Services
Decision(s): The Minister approved the Housing Department Policy in Respect of Rent Arrears
Reason(s) for decision: To put in place a robust Policy and processes for the recovery of existing arrears and the prevention of new debts.
Resource Implications: Financial: NIL Manpower: NIL ICT: NIL Property: NIL Law Drafting: NIL
Action required: Director of Estate Services to take the necessary action to implement the said Policy.
Signature: (Minister)		Date of Decision: 10 January 2007

Arrears Policy - Approval.

POLICY HD4

STATES OF JERSEY HOUSING DEPARTMENT

POLICY IN RESPECT OF RENT ARREARS

The Housing Department has a ZERO TOLERANCE POLICY

in respect of rent arrears

This policy describes the activities and responsibilities involved where rent accounts of current tenants are in arrears. The term “Rent Arrears” applies only to rent, not any other debts incurred by the Tenant. Such debts are dealt with in a separate Policy. (See Policy HD5)

The Policy applies to all rented property administered by the Housing Department. The Department expects tenants to prioritise rent above other bills.

Responsibility for the management of rent arrears and for contributing to challenging this unacceptable behaviour rests with all staff in the Department.

Business Plan

This Policy will assist the Housing Department to meet its Business Plan objective by addressing the following key target:

Reduce the percentage of rent arrears to 2.0% of gross rental by 31st December 2008 and 1.5% by 31st December 2009.

The Housing Department’s Aims

· To maximise the Departments rental income in order to fund required maintenance to maintain homes at the Decent Homes Standard

· To ensure that all new tenants and those transferring between properties have the Department’s zero tolerance policy in respect of Rent Arrears explained to them

· To provide clear and unambiguous guidance to any tenant in financial difficulty

· To take early action and apply preventative measures for rent arrears

· To adopt a firm but respectful approach to arrears recovery

· To avoid the use of eviction for rental arrears other than where all other means have failed.

Tenants Responsibilities

The term “Tenant” includes sole and joint tenants. If two or more people have signed the Tenancy Agreement, they are jointly liable for payment of rent. this means that each person is fully responsible for the payment of rent and any arrears of rent.

1. Rent is payable from the day the Tenancy is signed. Tenants have an obligation under the Terms of their Standard Tenancy Agreement to pay rent due every week. For all new tenants this shall be in advance.

2. Under present arrangements for the payment of rent abatement, tenants have a responsibility to notify the Department of any change in income. They must also advise of any circumstance that may affect their ability to pay their rent. This arrangement will change in June 2007 when the Low Income Support Scheme takes over responsibility for assessing and paying housing benefit.

3. Tenants can choose to pay their rent from one of the following methods:

By Cash or Cheque at the Post Office

By Cash or Cheque at the States Treasury

By Direct Debit

By Debit Card (payments can be made over the phone)

By Signing authority for rent to be taken from benefits cheques (Family Allowance, Sickness Benefit, Invalidity Benefit, Old Age Pension etc...)

By Wage Deduction

The preferred method of payment will always be Direct Debit. All new tenants will be required to pay by direct debit other than in the case where the tenant does not possess a bank account or payment by the signing over of benefit cheques is preferable.

Under the proposals for Low Income Support, a tenants rent plus charges will be paid to the Department direct by the Social Security Department as follows:-

Where a tenants Low Income Support payment is greater than or equal to the rent plus charges due, the full amount of the rent plus charges will be paid to the Department with any balance being paid to the claimant.

Where a tenants Low Income Support payment is less than the rent plus charges due, the full benefit payment will be paid to the Department as a contribution towards the rent with any balance due being paid by the tenant, preferably by Direct Debit and in advance.

Preventative Measures

1. Each new tenancy will be a Temporary or Probationary Tenancy for a period of 12 months. It will be explained to the Tenant that the conversion of this agreement into a permanent Tenancy will be conditional on there having been no rent arrears during the 12 month probationary period and to there having been no other breaches of the tenancy agreement. The Department will reserve the right not to make a tenancy permanent and shall be entitled to vacant possession with one weeks notice as set out in the agreement.

2. At the start of a Tenancy, the tenant will be informed of all costs associated with their new tenancy. An assessment of the likely abated rent will be made and a temporary net rent figure agreed with the Tenant. This rental is due immediately and shall be payment in advance. Following the implementation of Low Income Support the full rent will be due immediately.

3. For each new tenancy a direct debit mandate will be completed other than where a bank account is not available or when a tenant is in receipt of benefits whereupon the tenants may be required to sign over their benefit cheques as a guarantee of rent payment and/or provide a guarantor. Following the introduction of Low Income Support the payment of any benefits to the Department in lieu of rent will be mandatory.

4. An explanation will be given of the Zero tolerance policy in respect of rent arrears.

5. Tenants will be required to submit a completed abatement form for Housing Subsidy when signing their tenancy or be able to demonstrate that they have the means to pay the full rent.

6. A credit check may be carried out to establish the level of any existing debt and to allow for necessary management controls to be put in place. A poor credit history is not necessarily a reason not to house an applicant.

7. When contacting a tenant on any matters all staff will be encouraged to take the opportunity to check that the tenant is aware of the rent arrears policy.

How the Policy will be implemented - Work Flow Process

The Compliance Team is responsible for tackling rent arrears.

The attached Flow Chart shows the procedure the Compliance Team will follow when arrears have been identified on a rent account.

It is recognised that there are two kinds of Arrears which each require a different approach.

New Arrears Cases - Early Intervention

1. New rent accounts will be closely monitored for the first 12 months.

2. During that 12 month period, in the event of rent arrears the tenant will be given one opportunity to pay the debt within 7 days.

3. A failure to pay the debt may result in one or more of the following sanctions being implemented;

a. Withdrawal of Maintenance Services

b. Cancellation of garage rental agreements (this charge will then be removed from the account)

c. Cancellation of parking permits

d. Disconnection of TV aerial services where this is an element of the rent (this charge will then be removed from the account)

e. Disconnection of the district heating service where this is an element of the rent (this charge will then be removed from the account)

f. Referral to Petty Debts Court for collection of the outstanding sum

g. Issue of a Notice To Quit

h. Eviction (as a last resort);

all without the need for further notice to be served. All costs associated with any of the interventions 3a–h inclusive will be the responsibility of the tenant to pay.

Long Term or Persistent Arrears

1. The Compliance Team will adopt a Pro-Active approach to rent arrears by targeting estates with large arrears; this will involve home visits to tenants in arrears which may take place out of office hours if required. Tenants will also be contacted at their place of work, either by phone or in exceptional circumstances where other attempts have failed, in person.

2. For those tenants who receive Benefits we will suggest that they sign authority for their cheque to be paid to the Housing Department as a guarantee of rent and arrears payment. With the advent of Low Income Support this will be mandatory.

3. The Department can insist that a tenant pay their rent to a Debt Collector who will call at their address on the day they are due to pay. Where this is necessary the Debt Collectors costs will be added to the Tenants account.

4. A failure to pay the debt and establish a regular pattern of rent payments may result in one or more of the following sanctions being implemented;

a. Withdrawal of Maintenance Services

b. Cancellation of garage rental agreements (this charge will then be removed from the account)

c. Cancellation of parking permits

d. Disconnection of TV aerial services where this is an element of the rent (this charge will then be removed from the account)

e. Disconnection of the district heating service where this is an element of the rent (this charge will then be removed from the account)

f. Referral to Petty Debts Court for collection of the outstanding sum by mandatory wage arrest

g. Issue of a Notice To Quit

h. Eviction (as a last resort);

all without the need for further notice to be served. All costs associated with any of the interventions 4a–h inclusive will be the responsibility of the tenant to pay.

5. Agreements will be made with tenants to repay accumulated arrears. These agreements shall be made in writing and shall be for a sum not less than 7.5% of the tenants’ gross regarded income.

6. If a tenant is adhering to an agreement made with the Department we shall not utilise the sanctions at 4 above.

Evictions

The Department will normally cancel an eviction date if the debt is cleared in full. However, in cases with a history of persistent non-payment, we may proceed with an eviction even if the debt is cleared. In any case all costs accrued to that stage shall be for the tenant to settle.

Appendixes

Sample Letter 1

Sample Letter 2

Effective Date

The Policy shall become active on the date on which the respective Ministerial Decision is signed by the Minister.

Policy Drafted	28th December 2006	The Compliance Team

Policy Reviews	Date	Reviewed By