Technical Notes 2024, Issue 182 - Former Tenant Rent Arrears Write-Offs & Former Tenant Credits Write-Backs

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 tenant rent arrears and write-backs of former tenant rent credits.
2. The new Integrated Housing Management System, NEC, which will go live in late October 2024, will only transfer five years of data from the current housing management system, Saffron. The write-offs and write-backs support the implementation of this new system as part of the data cleanse process, while also ensuring that relevant back up reports are held.  
3. 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.
4. 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.

5. There are 441 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.
6. The Housing Service has made provision within the Housing Revenue Account (HRA) to write-off bad and doubtful debts. The amount of £568,238.10 can be accommodated financially from the HRA and the General Fund as set out in the table below:        

Budget provision for write-offs/bad debt

Total amount requested for write-off

7. There are 2,399 cases of former tenants, with amounts totalling £174,525.12, whose tenancy have ended more than 5 years ago leaving a credit on their rent accounts, which have been written back. Should any of these former tenants present at a later date then this can be reversed with money refunded, where appropriate and evidence produced to support a claim for refund.