Technical Notes 2024, Issue 143 - Tenant Rent Arrears Write-Offs

1. The purpose of this Technical Note is to advise Elected Members that the Council’s Chief Finance Officer has authorised a number of write-offs of former and active tenant rent arrears. 
2. When a tenancy is terminated, either voluntarily, abandoned or by repossession, any debt on a rent account then becomes former tenant rent arrears. The Service will seek to recover the debt by means of an affordable and sustainable agreement with a former tenant. Should no forwarding address be known, then and where appropriate, a debt recovery service can be used to trace the person in an attempt to recover the debt.  
3. The Council’s financial regulations highlight that ‘no debt in respect of an amount due to the Council, once correctly established, will be discharged otherwise than by payment in full, or by resolution of the Policy and Resources Committee, authorising the writing-off of the debt or the unpaid portion thereof’, except that the Chief Finance Officer may write-off where:

• There are good and sufficient reasons for so doing (including circumstances where;- the debt is not economic to pursue; the debtor is deceased with no prospect of collection from an estate; the debtor is in Liquidation; there is a Sheriff Office recommendation; the debt is outwith statutory prescribed periods); or
• The sum due on residual balance is less than £2,000.

4. There are seven cases where the Prescription and Limitation (Scotland) Act 1973 (“the 1973 Act”) applies, where tenant rent arrears cases have subsisted for a continuous period of 5 years or more, and as such are considered unrecoverable under the terms of Section 6 of the 1973 Act.  Obligations can be extinguished by the prescriptive period of five years and these include payments by way of rent under a lease.

5. The Housing Service has made provision within the Housing Revenue Account (HRA) to write-off bad and doubtful debts. The amount of £41,224.04 can be accommodated financially from the HRA and the General Fund as set out in the table below: