CIH Level 3 Certificate in Housing Practice (QCF)

Assignment 2

Occupancy Tenure and Lettings and Prevention and Management of Rent Arrears

Please attach this and the following pages to the front of your assignment to form one document

Your Name Richard Somers

Your tutor’s name Geoff Proudlock

Module number and module title Occupancy Tenure and Lettings

Prevention & Management of Rent Arrears

Course CIH Level 3 Certificate in Housing Practice (QCF)

Date assignment submitted 28th March 2015

First attempt or resubmission (please state) First Attempt

Please reflect on the assignment you are about to submit; then answer the questions below. This will

help us to address your concerns and help you to improve your skills. We may use this information to

help us improve our courses.

1. Things I think I have done well in this assignment:

I think done well in adapting to a Housing Associations point of view in this assignment. I visited a

Housing Association and interviewed their staff to prepare for this assignment. I think I answered

section A really well. I found it really interesting. I think I provided a very accurate flow chart for section

B and answered its brief well.

2. Things I have struggled with in this assignment: 

I found all aspects of this assignment to be challenging and outside of my comfort zone. I

particularly struggled with section B and C as I do not manage rent or handle allocations on a day

to day basis. This struggle produced lots of learning and I feel that this will be very beneficial to me

in the future.

3. Skills I would like to acquire/develop to improve my assignments:

I think I have all the skills I need.

4. Was the assignment brief clear? Yes

5. Think about the four compulsory self-assessed tasks you completed online. Note here the key

things you learned from these tasks, and how you might use this information in your studies and/or

your career:

There was a great deal of learning for me in all of the self-assignments, they have provided me with a

grounding in tenure, allocations and rent arrears prevention and management. This has increased my

confidence in dealing with these subjects in my job. This learning has also opened up the possibility of

applying for different roles within my organisations,i.,e, income officer, and allocations officer. There is

also now the potential for me now to apply for a Housing Association.

Please ensure that your work is clearly referenced as plagiarism is treated very seriously and

can result in a reduction of grade, a failure grade or, in extreme cases exclusion from the

course.

TUTOR FEEDBACK

To be completed by tutor and uploaded to Moodle

Student Name

Module number and module title Occupancy Tenure and Lettings

Prevention & Management of Rent Arrears

Course

Date received by tutor

TUTOR COMMENTS

This should include a discussion of the presentation and referencing as well as the content which was

completed well and what needs to improve.

Overall comments

What you did well

What you could improve

Grade awarded (first attempt):

Occupancy Tenure and Lettings

Prevention & Management of Rent Arrears

Pass Pass

Refer Refer

Grade awarded (resubmission):

Occupancy Tenure and Lettings

Prevention & Management of Rent Arrears

Pass Pass

Refer Refer

Section A

Why am I being treated differently to my neighbour?

Recently, three very concerned tenants contacted The Industrial Dwelling Society Housing Association (HA) and asked “Why am I being treated differently to my neighbour?” It had transpired that Mrs A, Mrs B and Mrs C had been chatting at the school gates and realised that they had different rights in relation to their tenancies.

Investigation revealed that they were correct in the fact that they are treated differently. This is because they have different types of tenancies. Mrs A has a Secure Tenancy, Mrs B has an Assured Non Shorthold and Mrs C has a Starter Tenancy (Assured Shorthold). Even though they are all tenants of same HA they hold different tenancies, or “terms of occupation” (HCA, 2012, p22).

Q. Why do Mrs A, B and C have different tenancy types?

A. The type of tenancy given to Mrs A, B and C are different because they are governed by different laws, or Housing Acts of Parliament. HA’s “must meet all statutory and legal requirements in relation to the form and use of tenancy agreements or terms of occupation HCA, 2012, p22).”

When Mrs A became a Tenant she was granted a Secure tenancy because that is what the law at the time stated that she should be offered and her HA had to comply with this. This type of Tenancy was introduced by the 1980 Housing Act and is governed by the 1985 Housing Act.

When Mrs B became a tenant the law had changed. On the 15th January 1989 the 1988 Housing Act was introduced and Secure tenancies for registered HA’s were replaced by Assured Non Short hold Tenancies. Only local authorities could continue to offer Secure Tenancies. As Mrs B became a tenant after this date her HA had no choice but to offer her an Assured Non Short hold Tenancy. If she had applied after the Localism Act 2011 came into affected she may have been offered a five year fixed term Assured Tenancy.

When Mrs C became a tenant the law had again changed. It gave her HA the right grant Starter Tenancies (or Assured Shorthold) under the 1996 Housing Act. Her HA had a choice in adopting their use and decided to use them.

Q. How Secure is each Tenancy Type?

A. These types of tenancy each offer different levels of security of tenure, or protection from eviction. Secure and Assured Non Shorthold Tenancies offer strong security as landlords can only terminate the tenancy with a court order court which will only be granted if they can demonstrate that they have followed the correct procedure and can prove their grounds (Price, 2015).

For Starter, or Assured Shorthold Tenancies there is much less security. A court order must be obtained to end this type of tenancy but no grounds need to be proved. Possession will be granted so long as the landlord has followed the correct procedure (Price, 2015).

Q. Who can buy their properties?

A. Secure Tenants have the right to buy and this is granted to them under the 1985 Housing Act. They will receive a discount based upon their length of tenure.

Assured Non Short hold Tenants do not have the ‘right to buy. The only exception to this is if they have been transferred from a local authority as part of a stock transfer. This is called a ‘preserved right to buy.

Starter Tenancies do not have the right to buy as it is not a part of the terms of occupation for Assured Shorthold Tenancies.

Q. If Mrs A,B, or C die can their partner succeed?

A. Yes - succession rights for the partner are the same for all three tenancy types, so long as a previous succession has not occurred and they are in occupation.

Q. Will Mrs A, B or C pay the same amount of rent?

A. No, the rents are set differently for Secure, Assured and Starter tenancies. Rents for Secure tenants are set by the Independent Rent Officer and the HA has to apply for this every two years. For assured non-short hold tenants and Starter Tenancies the HA sets a level which is no more than 80% of the market rent for the accommodation. Annual rent increases by no more that the Retail Price Index +0.5%. It is also reset every time an accommodation is re-let to a new tenant (HCA, 2012). Shortly this will change to the Consumer Price Index + 1% (HCA, 2012).

Q. Which is the most valuable type of Tenancy to have?

A. It could be argued that the most valuable type of tenancy to a tenant is a secure tenancy as these offer more rights than Assured or Starter Tenancies. For example they include the valuable right to buy, the right to ‘fair rent’, the right to take in lodgers, improve and the right to set up a Tenancy Management Organisation. HA are aware of this disparity and some are trying to redress the balance by increasing the rights that assured tenants have. Starter Tenants have the least valuable type of tenancy as they hold a very basic form of Tenancy.

Q. What are the advantages to the HA of each type of Tenancy?

A. Secure Tenancies carry the right for the landlord to vary terms, without tenant agreement, other than rent or service charge. The other types do not. Also secure tenancies under the 1985 Housing Act carry specific grounds for possession which is useful to a landlord seeking to address anti-social behaviour and rent arrears.

Assured tenancies, like secure tenancies offer structured grounds for possession which can curb problem tenant behaviour. They also offer a mandatory possession ground for rent arrears (Ground 8, The 1988 Housing Act).

Starter Tenancies are advantageous to the landlord as a court will grant mandatory possession so long as the correct procedures are followed.. This enables HAs to tackle extreme and problematic tenants early on and minimise their impact on others.

Section B

Understanding Rent

In this time of recession many tenants are worried about the possibility of eviction. Industrial Dwelling Society (IDS) Housing Association has “a core commitment to sustaining tenancies and using court action as a last resort for rent arrears (IDS,2008,p1).” This is achieved through arrears prevention, early intervention, referrals to external agencies, tackling financial exclusion and court action as a last resort.

1). Arrears Prevention – IDS delivers this by:

a). Explaining how the rent process works and what is expected right from the start at the new tenant’s sign up.

b). Promoting the right regular payment method and encouraging New Tenants to use standing orders and direct debits.

c). Ensuring benefit take up, and resolving housing benefit issues.

d). Discussing the tenant’s finances and offering them budgeting advice both at sign up and throughout their tenancy.

e). Reviewing their rent during New Tenant Visits.

f). Early contact regarding rent arrears and quarterly rent statements.

(IDS, 2008)

2). Early intervention and management of arrears. This process is outlined in the Early Intervention stage of ‘The Rent Arrears Process Step by Step’ diagram below..

3). The use of external statutory and support organisations where necessary for tenants. Referrals to partner organisations such as the council( i.e., Social Services),the Citizen’s Advice Bureau, Christians Against Poverty and Step Change. While these partnerships are not formal they are effective.

4. The use of Financial Inclusion strategies to support residents. Referrals to credit unions and support for tenants in the completion of bank account application forms.

5). Legal Action as last resort. This includes adherence to a pre-action protocol for possession claims.(IDS,2008,p1)

These policies and procedures are similar in all registered providers, including local authorities landlords such as Enfield Homes( Enfield Homes, 2014.)

Rent arrears management for tenants is broken into stages:

This process includes a pre-action protocol for possession claims, and the court

action process (Kruse, 1997, p34).

The process outline is for an Assured Tenant who is in arrears, if the Tenancy held

was Secure or Starter Tenancy the process would be different. The main difference

for secure tenants is that the NoSP is served under the 1985 Housing Act (HA) citing

ground 1. The process itself for local authorities and registered housing association

who have secure tenancies is identical.

For Starter (Assured Shorthold) Tenancies the Notice is served under Section 21 of the 1996 Housing Act. The tenant is entitled to request a review of the notice fourteen days after it served (Kruse, 1997). If this review upholds the action then it will proceed. For Starter Tenancies the grounds do not have to be proved, so long as correct procedure is followed, the court will award possession.

Performance for IDS is measured as a percentage against the annual debit, or

amount of rent that is to be collected. Their target is 3.5% arrears annually.

Currently IDS is doing well by achieving 2.9% year to date. IDS also monitors it’s

rent receivable which is the total amount of rent paid as a percentage of total rent.

This is performing well at the moment, as is its former tenant arrears which are well

within budget.

It is vital for a registered landlord, such as IDS to manage and monitor performance

because the income generated from rent funds the entire service and repays

development loans. Poor performance could result in a poorly funded and delivered

service, and will impact on potential future development plans.

Section C

Different Approaches to Letting

Introduction

This briefing paper is to support the Tenant Scrutiny Panel in their review of the lettings process.

This paper will:

1). Set out the regulatory and legal context for and the requirements for allocating social housing.

2). Outline the different ways of letting properties.

3). Look at the advantages and disadvantages of these different methods.

1 .The Regulatory and Legal Context and Requirements for Allocations

Allocations in England and Wales are governed by the Tenancy Standard which is one of several Standards given in the Regulatory Framework introduced in 2012 by the Homes and Communities Agency(HCA, 2012). Registered providers shall “let their homes in a fair, transparent and efficient way. (HCA, 2012, p22).”

Registered Housing Providers (RHP) shall:

Meet the obligations of their nomination agreements to support local authorities (LA) strategic function and duties to meet local housing needs, including their homeless duties.

Address under occupation and overcrowding in their homes.

Publish polices which describe how they use common housing registers, common allocations policies and local lettings policies.

Clearly set out the criteria they use to for excluding actual and potential tenants from allocation consideration.

Develop and deliver allocations processes in such as way as to support their use by those with support needs and who speak English as a second language.

Minimise the amount of time their properties are empty.

Record all lettings and sales as required by the Continuous Recording of Lettings (CORE) system.

Provide all tenants wishing to move with clear and relevant advice about their housing options. (HCA,2012)

The 1996 Housing Act

The 1996 HA makes it statutory that allocations schemes must:

Allocate property to those who qualify to have accommodation allocated to them (1996, section 160A)

Give reasonable preference in allocating accommodation to certain defined groups (Section 167(2)).These being:

o The homeless as defined by Part 7 of the 1996 Act.

o People owed a duty by any HA according to the 1985 or1996 Housing Acts.

o People occupying insanity, overcrowded of unsatisfactory housing conditions.

o People who need to move on medical or welfare grounds, including disability.

o People who need to move to a particular locality where failure to move them

would cause hardship to themselves and others.

Follow their stated policy and procedure when they allocate accommodation. (Section 167(8).

Include a statement on the HA policy on offering people a choice of accommodation or the opportunity to express preferences about the properties which are allocated to them (Section 166a).

Achieve organisational management and policies objectives. This is commonly done through local lettings plans.

The 2002 Homeless Act – The Choice and Preference Requirement

The 2002 Homeless Act abolished the requirement that HA must have a housing register and allows people to be able to make a choice and have a preference over the accommodation they are offered (Section 166a).

The Localism Act 2011

The Localism Act 2011 supports the 1996 Housing Act, however it also allows registered providers to determine what classes or people are or are not qualifying persons in the allocation of social housing (S160AZ(6)(a)).

2. The Different Ways of Letting Properties

1.Type of Allocation

How does it work?

2.Advantages Disadvantages

Points Based Schemes

Applicants are accessed and given points based upon their circumstances which they use these to ‘bid’ on available properties which are advertised online and/or in local media.

.

Points systems recognise the ‘reasonable preference’ criteria which aids those who are the most vulnerable in society.

Points allocation is complicated and difficult for ‘bidders’ to understand which can cause frustration and legal challenge.

Points based systems as they are weighted in the favour of those to whom reasonable preference must be given to them could be seen to exclude all others and dominate this type of system.

Banding Schemes

Applicants placed in groups, i.e., medical needs, homeless, general needs and so forth. A proportion of allocations is made from different bands using a quota system

Clearly identifiable groups, people know where they stand.

This system clearly meets the reasonable preference criteria, while not allowing it to dominate.

Does not always take into account multiple needs.

Additional criteria required to allocate within a band i.e., date order, or points.

Priority Group Schemes

Applicants placed in groups, each group has a priority. Allocations are made to higher groups first. If there is no take up then they are made to the lower priority groups

Groups are clearly defined.

Reasonable preference is followed.

The higher priority groups dominate.

Can be very frustrating long standing applicants in lower place groups.

Applicant group placement open to challenge

Local Lettings Plan

HA produces a plan detailing the percentage of allocations they will use for nominations and for their own business needs.

Clearly factors in HA policies and procedures. Clearly allocates a percentage of resources to overcrowding under occupation, ASB. Balances the need of the organisation against statutory duty to local authorities.

Needs constant attention and rigorous management as needs and circumstances can and do fluctuate.

Traditional Date Order Waiting Lists

Allocations are made in date sequence.

This is a simple system for people to understand, and they know where they stand with it.

It does not demonstrate a reasonable preference for those whose circumstances may warrant special consideration.

Merit Properties are allocated based on the circumstances of the applicant, their need is weighed and given priority.

This is a very old fashioned human centred approach.

This can be seen as a very subjective process and is open to challenges on those grounds in terms of fairness.

Combined Methods

A Mixture of the above methods, for example, a local lettings plan, and a CBL banding system using points and date order.

A Mixture of the above methods, for example, a local lettings plan, and a CBL banding system using points and date order.

Produces a balanced approached to business and LA needs.

Allows differentiation between candidates in bands, so it is fairer.

These systems are complex and difficult for applicants to understand.

They can be subject to legal challenge.

Bibliography

Enfield Homes (2014) Rent Collection and Arrears Recovery Policy [Online]. Available from: http://www.enfield.gov.uk/Enfieldhomes/downloads/file/279/rent_collection_and_arrears_recovery_policy [Accessed 10th March 2015].

Homes and Communities Agency (2012) The regulatory framework for social housing in England from 2012 [Online]. Available from: https://www.gov.uk/government/publications/the-regulatory-framework-for-social-housing-in-england-from-2012 [Accessed 28th February 2015].

Industrial Dwelling Society (2008) Rent Policies and Procedures [Unpublished policy document].

Kruse, J. (1997) Recovering Housing Debt. Totton: Chartered Institute Of Housing

Price, G. (2015) Housing Law and Practice 2015. Guildford: College of Law Publishing.