Rental income collection policy

Policy statement

We are committed to providing a proactive, empathetic and preventative approach in supporting our residents with rent arrears. Our primary objectives are to ensure we provide sustainable tenancies whilst also maintaining our rental income. We achieve this by providing early intervention, clear communication and a supportive service to all our residents.

Belle Isle tenant management organisation (BITMO)

Belle Isle Tenant Management Organisation (BITMO) operates under delegated authority from Leeds City Council and are responsible for managing Leeds City Council properties within the Belle Isle suburb of Leeds.

Whilst BITMO applies this rental income collection policy, Leeds City Council retains responsibility within this policy in areas such as legal proceedings and former tenancy arrears management.

Aims of the policy

The aims of this policy are to:

prevent our residents from falling into rent arrears
provide timely and effective support to our residents who are in arrears to maximise tenancy sustainment
maximise the council's rental income to maximise resources to invest in delivering service to our residents
ensure that our approach is fair, consistent, and respectful of our resident's diverse needs
ensure that our service is transparent, accountable, and supports a positive relationship between landlord and our residents
support the delivery of wider housing management services

Purpose

The purpose of this policy is to provide details of how we (Housing Leeds) will perform its housing management duties of rent collection, and efficient arrears management, while supporting our residents to maintain their tenancies.

Our priorities

The income generated from rental collection ensures our homes are safe and well-maintained, whilst improving the service provided to our residents. By collecting rent consistently, we can continue to invest in our homes and support our residents and communities.

We deliver our rent collection service through local housing teams based in the communities we serve. This allows us to reach our residents easier, with staff managing fewer properties allowing for more personal support to our residents. We also provide specialist teams to work closely with our local teams to provide extra help and care for our residents when needed.

The policy supports the Inclusive Growth theme of the Leeds Ambitions Housing Strategy 2022 to 2027 around tackling poverty, reducing inequalities and supporting our residents. We will minimise homelessness through a greater focus on prevention and providing appropriate housing to support our residents with individual needs. We will help our residents maximise income and target interventions to tackle poverty in our local communities.

The Housing Leeds ‘we are here to help’ approach

To achieve our objectives, the council has committed to the following:

support our residents to pay their rent and provide assistance with claims for welfare support and maximising residents income
provide additional support to our residents who are struggling to pay their rent
to work with relevant stakeholders and focus on the needs of our residents so they understand to work with the council to ensure rent is paid, claim welfare benefits and seek the support if required
we will ensure all forms of communication with our residents are confidential, and supportive, ensuring all information is clear and tailored to the needs of the Individual
work with residents and consider income and expenditure details when making affordable repayment arrangements
encourage Direct Debit as a preferred method of payment whilst also offering a range of alternative payment options to suit each of our resident’s needs
promote rent to be paid in advance
work in partnership with external agencies to ensure all our residents receive appropriate support from the first day of their tenancy
if all efforts to resolve the arrears have been exhausted, we may consider legal action as a last resort, which could include seeking possession of the property
to continually explore ways, we can improve our service to our residents through stakeholder engagement and ensure we spend money wisely
we will promote citizens advice bureaux, debt advice agencies or other appropriate agencies to our residents

More information on debt advice is available on the Money Advice Service website.

Legal and regulatory framework

We will ensure that our Rental Income Collection Policy meets with legislative and best practice requirements to maximise income and minimise rent arrears. If court action becomes necessary as a last resort, then we will adhere to the Pre-Action Protocol for Possession claims issued by the Civil Procedure Rules (CRP) Committee under the authority of the Ministry of Justice.

Joint tenants are equally responsible for the full rent and any other charges. We will recover the full rent and any arrears owed from any of the individual tenants.

In households with sole tenancy agreements, tenants may be encouraged to keep other household members informed of any legal proceedings related to rent arrears.

Rent setting

We set our rents in line with the Rent Standard issued by the Regulator of Social Housing. Our residents will be provided 4 weeks’ notice of any change in their rent, services charges or garage rent.

Rent statements

We provide our residents with detailed rent statements every financial quarter with a breakdown included within the statement to clarify how balances are calculated and displayed.

Our residents have access to the Tenant Portal, where they can view their rent statements. We are committed to continuously improving this service and raising awareness of the Portal’s benefits. As part of this, we regularly review our approach to providing rent statements electronically to ensure we meet legal obligations, uphold service standards, and maintain the accuracy of the information presented."

A hard copy of the rent statement and balances can be provided if requested ensuring to suit each of our resident’s needs.

Payment and payment options

Rent is collected over 52-week period, and there are no rent-free weeks.

Every 5 to 6 years this may be collected over a 53 week period due to the calendar year having an extra day (or two in a leap year) which can result in 53 weekly rent payment dates. All our residents would be notified at least 4 weeks in advance.

Our aim is to make paying rent easy and offer a range of alternative payment options. The preferred method of payment is by direct debit, and we will promote this method to our residents wherever appropriate.

Direct Debits can be scheduled for payment on any day and set to recur on a weekly, fortnightly, four-weekly, or calendar monthly basis.

Alternatively, payments can be made in advance by one of the following methods:

standing order weekly, fortnightly, four-weekly or monthly
online payment via the Tenant Portal
telephone using a debit card (automated line available 24 hours per day, 7 days a week)
post Office or Pay Point outlets
Leeds City Credit Union (Available to Credit Union members)

Welfare changes

Universal Credit has changed rent payment responsibility for many of our residents. With Universal Credit, most claimants now manage their claims online and will receive the housing element directly to themselves to pay the rent. The entitlement of the housing element is affected by welfare changes such as the benefit cap, under occupation charge, and non-dependant charge.

For our residents affected by the welfare changes, we ensure to provide support through various means such as providing debt advice, Local Welfare Support Scheme (LWSS), Discretionary Housing Payments (DHP), Utility Grants, and energy cap helping residents to sustain their tenancies.

We work closely with Council Tax and Benefit Service to resolve outstanding issues with benefit claims and maintain good working relationships with the Department for Work and Pensions (DWP) as more of our residents move onto Universal Credit.

As we are signed up as a trusted partner, this status provides us access to the Landlord Portal for Universal Credit so that we can validate information to progress Universal Credit claims for our residents.

Once the claim is set up this will be paid directly into the claimant's bank account and is paid a month in arrears. We recognise our residents may go into arrears during this period and as so long as payment is made once they receive the first payment and the arrears are solely attributable to Universal Credit, no recovery action will be taken.

Where appropriate we may request a Managed payments to Landlord, Third Party Deductions for rent arrears, or direct Housing Benefit payments to the rent account when arrears on the rent account equal to or more than two months of their rental charge.

In line with our Lettings Policy and commitment to a “here to help” approach we support our residents before the tenancy starts. We provide advice on setting up a Direct Debit, assist with making claims for welfare benefits and ensuring all information is submitted and support provided throughout with claims.

We will also carry out affordability and vulnerability assessments before a tenancy begins to ensure the right support is in place.

In line with Lettings Policy, we will encourage payment of rent in advance. This payment can be made by an alternative payment method until the Direct Debit is setup.

Preventing rent arrears

We understand our residents may have other financial commitments, but paying rent is essential in keeping a safe and secure home. We are here to help our residents manage their rent and provide a supportive approach to finding solutions when payments of rent become difficult.

We engage with tenants in arrears or facing financial difficulties, placing them at the centre of the conversation and encouraging them to help identify solutions that work for them. Our approach may include assistance with:

maximising income - assist with claims for housing benefit/universal credit
financial inclusion - help with finding other agencies who can provide financial support
budgeting support - discussing affordable repayment plans based upon income and expenditure
signposting those needing digital assistance
supporting through Partnership Agencies - identifying partnership agencies who can provide general support
pre-Tenancy Support - providing clear advice at the use offer and Viewing Stages to give clear advice about payment options, how to maximise income and make claim for benefits whilst also capturing information around affordability
encouraging regular payments to avoid rent arrears
providing accurate detailed information on what the rent is for their home
providing quarterly rent statements, showing rent charged, payments made and the balance on the account.

Recovering rent arrears

Our rent collection procedure sets out the actions and timescales for each stage. It focuses on early intervention through regular contact to help our residents resolve arrears and avoid possession proceedings. We will ensure repayment plans are based on affordability, with instalments agreed where needed.

The first stage

We monitor rent accounts weekly and ensure early intervention takes place if payments are missed. We will attempt contact and work with our residents if arrears are not addressed. Whilst expectation is the arrears are to be paid in full; we may agree to affordable repayment plans to clear the arrears. We may exhaust all methods of communication via letter, email, phone, text or home visit to ensure early intervention takes place whilst making clear that a failure to engage may result in legal action.

Notice seeking possession

We may serve a Notice Seeking Possession where 4 weeks net rent or more is owing unless there is outstanding Housing Benefit or Universal Credit Claims, or affordable repayment plans are in place.

We will continue to attempt contact throughout to try support our residents with clearing the arrears to avoid further enforcement action.

If a Notice Seeking Possession is served, we may serve a Notice to Quit (NTQ) to terminate any garage site tenancy our residents may also have.

Court order for possession

Following a Notice Seeking Possession, if the rent account is not reducing on a regular basis, an application for a Possession Order may be made.

A rental possession claim may be applied for where 8 weeks net rent or more is owing. We may escalate the process as a last resort following the guidance on best practise as reflected in the pre-action protocol for possession claims based on rent arrears and civil procedure rules (CPR).

We will ask for any costs to issue the claim to be awarded at the court hearing and the costs to be charged and added to the rent accounting system.
If a possession order is obtained and a failure to comply with the court order, this matter may be escalated for eviction.

Application for eviction

If all other attempts to recover the arrears are unsuccessful, we may take action that results in the application of a warrant for eviction as a last resort if there is a failure to comply with the possession order.

We will continue to contact residents and work with them to clear their arrears, offering financial and tenancy support as required.

To ensure all attempts are made to resolve the arrears prior to applying for the warrant, the warrant panel will review each individual case to decide.

The warrant panel is the local housing office team leader or housing manager who will present the case to a panel consisting of the Income Management Team and Leeds Housing Options who will provide an impartial view and consider if it’s reasonable and proportionate to apply for a warrant based upon all relevant factors such as our commitments to preventing homelessness, the individual needs of those affected and the impact an eviction would cause, and the financial implications of eviction to Leeds City Council.

The panel will consider further factors such as information obtained from Children’s Social Services, Adult Social Care and Leeds Housing Options Support Team.

Following our application for a warrant of possession, we will not agree to suspend the warrant, and the tenant will need to seek independent legal advice.

If the eviction is suspended and any subsequent order is breached, we may (re)issue the warrant of possession if appropriate.

Exercise of discretion

In exceptional circumstances the Head of Service may decide that this rent arrears recovery policy shall not be applied in whole or part and may take any other action considered appropriate to the case.

Vulnerable tenants

Our policy on vulnerable tenants is set out in its individual needs policy which supports our residents who may have individual needs which affect the way that we provide services and ensure all our residents is supported to achieve a sustainable tenancy.

Where our residents with individual needs have rent arrears, we will consider them in accordance with the Pre-Action Court Protocol as part of all customer contact. Where individual needs are identified we will ensure that considerations are made to the proportionality and reasonableness of undertaking possession proceedings.

We will engage with other agencies to ensure that our residents needs are met and provide support through maximising their income and assist with applying for any welfare benefits they may be entitled to.

We will also ensure to balance the need to record and share information so that our resident's information is up to date and shared appropriately to meet their individual needs. We are also aware that needs may change over time so will continue to review a customer needs, and if reasonable adjustments have been agreed, we will make it clear how our service will respond to this need.

Insolvency and rent arrears

If our residents are struggling with debt, they may enter bankruptcy, obtain a Debt Relief Order (DRO), or an Individual Voluntary Arrangement (IVA). Whilst these can include the arrears, we will advise our residents that they are still liable for on-going payments of rent and recovery action may be taken if the rent is not paid.

If our residents apply for the Breathing Space Scheme, we will not take any enforcement action for the debt covered under the scheme, during the agreed period. Under the terms of the scheme, we will advise our residents that they are still liable for the on-going payments of rent.

Rehousing tenants with arrears

The council’s policy on rehousing residents with rent arrears is set out within our Lettings Policy. The Housing Allocations Scheme details exclusions from the register and offers of accommodation for our residents with rent arrears.

Persistent arrears may impact on the granting of a joint tenancy from sole and vice versa, in addition it will not be possible to transfer or conduct a mutual exchange. Discretion may be used in exceptional circumstances.

On receipt of a housing application, any applicants with current or former rent arrears will be assessed to ensure the applicant meets the Qualification Criteria and where applicable Reduced Preference may be applied. Details of how this will be applied are contained in the council's Lettings Policy. Other outstanding charges or housing debts may impact ability to rent or buy.

Introductory tenants (IT)/demoted tenants

Our policy on Introductory Tenants in rent arrears is set out in its Introductory Tenancy Policy. Most new tenants will be introductory tenants which is a period of 12 months, whereby after the 12 month period the tenant automatically becomes a secure tenancy and will then have all the rights of a secure tenant.

Former tenant arrears

If a tenancy ends with rent owing, we will still expect the outstanding amount on the rent account to be paid.

We will work with our residents to ensure any outstanding balance owed once the tenancy is terminated is paid, however we may agree affordable repayment arrangements where appropriate. We may attempt to make contact by letter, phone and visits to their new address.

Where no forwarding address is given, we will attempt to trace the forwarding address in order to resolve the outstanding balance.

If we are unable to recover the outstanding balance, we may use approved external debt collection agencies to arrange collection.

If we have followed all steps to recover former tenant arrears (FTA) and haven’t been successful, we may write off the debt in line with our financial procedures. If the chance to recover the debt arises later, we may still pursue it.

Credits (refunds)

If there is a credit balance on a residents account, residents must apply for a refund. Where a credit refund has not been requested within 2 years after the tenancy is terminated the credit may be written off. If the resident is located after the 2 years, the credit may still be refunded after this time period. Refunds will not be approved if the refund would cause the rent account to go into a debit or breach an arrangement in place or court order.

Legislation, regulation, and guidance

Any action taken in relation to recovering rent arrears may also consider the context of any applicable national legislation, including but not limited to:

Protection from Eviction Act 1977
Housing Act 1985 (as amended by the Housing Act 1996)
Housing Act 1988 (as amended by the Housing Act 1996)
Housing Act 1996
Homelessness Act 2002
Equality Act 2010
Deregulation Act 2015
Social Housing Regulations Act 2023