1.0: PROJECT OVERVIEW 1.

1 INTRODUCTION

Rent collection refers to the situation whereas tenants occupy property management services, they have to pay the rent as require. Rent includes payment for their home, garage or service charge and is collected to cover the cost of the services provided by the management. The rent was set within the governments rent regime and maximise rates of collection. In general viewing, usually rent collection and arrears management is a key indicator for measuring property management performance.

The efficiency of a landlord in collecting rents and managing rent arrears is important because if rent is not collected or arrears are allowed to grow, funding has to be found from elsewhere to maintain the services. Basically, rent collection and arrears management forms an integral part of the overall Rent Policy of the company. For the purpose of this report the rent collection will mean rent and service charge (where applicable) as per the tenancy agreement.

Rental income is a major source of finance for Housing Associations and is used to meet the costs of their financial commitments and managing and maintaining their housing stock. It is therefore important for Housing Associations to adopt and follow good policies and procedures in relation to the whole area of Rent Collection.The Department would adopt the view that tenants have a responsibility to pay their rent on time and equally Social Landlords have a responsibility to maintain and sustain tenancies.

accounting and arrears control practice. In common with all public service management reform programmes.There will however be occasions when failure by a tenant to pay rent may result in more serious action being taken resulting in court action and eventual eviction. Eviction has high social and economic costs for both the tenant and the Association and frequently results in the debt being unpaid and the Social Landlord left to pay court costs. the Department would urge all Social Landlords to place an increasing emphasis on alternative approaches with a focus on preventative. Achieving good practice in management of the rents service is a challenging task and many issues and policies need to be considered in the development of a programme to improve rent assessment. . accounting and arrears recovery service. should be a central element of any proposed strategy to achieve good practice in the rent assessment. strategies. Therefore. accounting and control of arrears of rents for local authority dwellings should take account of the specific issues. plans to improve practice in the assessment. rather than reactive. collection. Eviction should always be viewed as a last resort and should only be used when all other avenues have been exhausted. Some of these issues and policies are relevant only to the rents service. These indicators should be related to the specific local needs and requirements of each local authority and they should be regularly reviewed. collection. others apply to the wider local authority housing service and indeed to the entire public service. The identification of a set of performance indicators as the basis for assessing the quality of the service and to inform strategic management decisions which has been claim as one of the issues. updated and monitored to meet changing conditions and circumstances. collection.

This management information should relate directly to the chosen performance indicators. . ideally.Rent service management information systems should. finance. readily collated. lettings. vacant dwellings. clearly presented. be linked to the information systems relating to the other main elements of the housing service such as tenancy updates.Management information systems should be established in order to collate all of the information necessary for performance measurement. It should also aid problem solving and decision making and assist in policy formation. repairs and maintenance and budget control. be easily collected. and regularly reviewed.

rather than reactive strategies. The ultimate legal option is possession actions leading to eviction and the use of possession actions by social landlords have more than doubled in the decade to 2003. the average size of rent debts has grown. in many cases the problem of rent arrears has been exacerbated by deficiencies in management by social landlords. delay in processing claims for property benefit. failure to communicate with tenants in financial difficulty and delay in commencing recovery action. Housing Corporation regulatory guidance emphasises that social landlords should seek to maintain and sustain tenancies. leading to an overall increase in rent arrears nationally. rather than terminate them and that eviction should only be used as a last resort.However. . It is the responsibility of tenants to make sure that they pay the rent they owe. This is often characterised by the lack of coherent strategy for dealing with arrears.1. However. Eviction has high social and economic costs and landlords should therefore place increasing emphasis on alternative approaches and a focus on preventative. Although the number of tenants in rent arrears has fallen slightly.2 PROBLEM STATEMENT Ensuring that rental income is collected effectively is a key function for social landlords. Social landlords have a range of tools and remedies available to them to tackle rent arrears.

1.3 OBJECTIVE General Objective: • To examine the strategy approach to improving rent collection and arrears management Specific Objectives: • To identify the factors leading to rent arrears problems that influencing the organizing of organizational strategy approach • To identify good practice in the prevention and management that influencing improvement in rent arrears management arrears • To determine the use of possession actions as a legal remedy to overcome rent arrears problems and improving rent arrears management .

determines what variables to measure to obtain the factors involve which may leads to the rent arrears problem among the tenants.Vulnerable tenants .ethnic Strategy approach Factors .1 represent conceptual framework of a research to examine the variables that involve in order to improve the rent arrears management.household type -gender .Life style .Changes in employment entitlement status .age .Independent Variable Mediator variable Dependent Variable Demographic Backgroundof tenants .Young single people . In order to overcome and improving the rent arrears management.1: Conceptual Framework of the Research Figure 1. A conceptual framework guides research. landlords .Low income families .convenient ways of payment Improving rent collection and arrears management Figure 1.

age. the landlord also should identify problem that faced by tenants that are actually the factors influencing appearances of rent arrears management. can be reach. ethnicity and so on. and leads to present and future orientation. such as household type. then this will come out with the better or improved rent collection arrears management. preventative measures of arrears management. The approach should be realistic. reflects the organizational goal without neglecting tenants interest. clear.should first recognize the background of tenant. after the factors that leads to the rent arrears problems has been indentified.Other than that. the landlords may then organize the strategy approach as the systematic planning to overcome the problem of rent arrears. In addition. After all the tenant’s demographic profile. strategy approach in order to reorganize organizational management has been indentified. maximising tenants income and also managing rent arrears in policy aspect. factors that leads to rent arrears problem. The strategy approach including the organisation of rent arrears management. This is important for the landlords to identify the characteristics or tenants profile that have a large probability of facing a problems in rent payment. gender. .

funding has to be found from elsewhere to maintain services. The efficiency of a landlord in collecting rent and managing rent arrears is important as if rent is not collected or arrears are allowed to grow. It is the responsibility of tenants to make sure that they pay the rent they owe. However. Effective management and prevention of rent arrears should therefore be a key component in a local authority’s strategy to regenerate its communities.Finch.2002). This is often characterised by the lack of coherent strategy for dealing with arrears.0 LITERATURE REVIEW Rent Collection The collection of rent is one of the most important aspects of the Housing Management Service because the rents paid by the tenants contribute to the income used to manage and maintain social housing ( Audit Commission. Rent collection and arrears management are a key indicator of housing management performance. According to Gray. Poor performance in rent collection and arrears management may also have an adverse effect on rent levels and a landlord's business plan (Audit Commission 2001). Similiarly. good management of rent collection and prevention of arrears can provide tenants with a feeling that the landlord supports the needs of all tenants and not just those in rent arrears. failure to communicate with tenants in financial difficulty and delay in commencing recovery action (Welsh Assembly Government. 2004). in many cases the problem of rent arrears has been exacerbated by deficiencies in housing management by social landlords. delay in processing claims for housing benefit.2. research by Audit . Prescott (1983).

Good practice requires that a rent determination system must not only reflect the principles laid down by the Department of the Environment and Local Government but that it should also be simple and transparent. Furthermore. whilst standing orders and . and the relatively high proportion of social tenants who do not have bank accounts (Evans & Smith. focusing on alternative methods to costly and damaging legal proceedings (Capita Conference. and not contribute to the unemployment trap. However. dispersal of stock. James &Michelle (2001) state that the first step to achieving good practice in the management of the rents service is improving procedures in relation to the determination of rents.Commission(2002) state that associations need efficient and effective rent collection methods that are also convenient for tenants . have carried out a detailed cost benefit It is important to reviewing rent collection methods which is vary in terms of operating costs and effectiveness. Successful rent collection is key to a social landlord’s housing management strategy. post office giro payments are associated with relatively high levels of arrears. few social landlords analysis of their rent collection. According to Evans & Smith(2002). to systematically challenge the services and ways of working. many councils remain committed to door-to-door collection. easily administered by staff and understood by tenants. The main barriers to extending payment options are setup and ongoing costs. the research also state that improvement has to be encouraged.staff and/or elected member resistance.2002). especially for small housing associations. door-todoor collection is usually a costly service to operate. in particular in rural areas . lack of information on the costs and benefits of existing methods.2005). whilst door-to-door collection and office payments are associated with lower levels. This conference will explore effective strategies and solutions to manage rent arrears.

and reduces the anxiety and disruption experienced by tenants (Audit Commission. Scott (2005) in his further study. the balance of costs and benefits will vary locally. as well as publicising the . and this should involve highlighting the connection between rent payments and the landlord's ability to deliver high quality services. allows councils and housing associations to target resources on improving services. Preventing & Arrears Management Prevention is better than cure. found that landlords should promote a rent payment culture. When social landlords fail to collect the rent due from their tenants there is less resource available to fund front-line service provision and there are negative consequences for both individuals and communities.direct debits (where tenants have bank accounts) may be much more cost effective. So it is important that social landlords effectively manage rent collection to ensure that the resources available to finance the housing service are maximised to the benefit of all service users. visit tenants within the first few weeks of them taking up their tenancies and advise tenants who have applied for HB of any potential shortfall and the amount they are likely to have to pay. 2005). effective rent arrears management is important. Clive Grace (2004) suggest. Improving the effectiveness of the management of rent arrears aimed at all social landlords and all levels of a landlord’s rent arrears management service – from the governance (elected local authority members and elected Registered Social Landlord board members) through to the practitioners (housing officers) and stakeholders (tenants’ and their associated representative bodies) (Scott.2002). It is more cost effective. In addition the research also state that the importance of prevention is recognised by social landlords where the majority provide welfare benefit advice. However.

accessible and convenient to use.. finding that "the importance of management performance far outweighs the impact of external factors … Good management can affect the local situation. Radford (1980) found that demographic characteristics were the best predictors of arrears levels and Duncan & Kirby (1983) found that "the highest arrears occurred among the local authorities with the highest levels of economic and social deprivation". The DoE funded study 'Preventing Rent Arrears' was inconclusive in this respect finding an example in Warrington where local estate offices had improved landlord-tenant relations thereby reducing arrears and finding other reports where decentralisation had been "accompanied by a large increase in arrears" (Duncan & Kirby 1983). Duncan & Kirby 1983.The Gloucestershire data in this study is not much more enlightening although it might be notable that Fosseway (the highest performing organisation) has established two estate offices for delivery of the whole estate management function. Many studies on rent arrears performance draw attention to the importance of ranking rent arrears performance data alongside indices of deprivation (Housing Corporation 2000.1993). even in the most difficult circumstances. Bines(1993)also found that "there was quite a high positive correlation between. It is also interesting to consider whether the extent of decentralisation may have an influence on rent collection and arrears performance. Bines . More successful authorities … often have arrears 50% or more below the levels of authorities facing similar socio-economic conditions" (Audit Commission 1984). In this way the wider social context can be taken into account.potentially serious personal consequences of accumulating arrears. . the relative deprivation in each local authority area and the percentage of current tenants in serious arrears" The Audit Commission report "Bringing Council Tenants' Arrears Under Control" also supports the view of Anne Power. They should provide a wide range of options for making rent payments. which are flexible.

. nor even a specific set of management methods. The report by Clinton et al (1989) places considerable emphasis on how organisations and procedures reflect the history of local government and on the fact that variations in performance can be explained by the facts of geography and social structure as much by organisational structure.The CHR (1989) & Clinton et al (1989) reports concluded that "no particular organisational form. can guarantee good performance" (CHR 1989).

questionnaire was used in this study as the main source of getting data.1 METHODOLOGY RESEARCH METHOD Research Design This study used a causal research design. In terms of nature of causality. . the relationship is a causal relationship. two variable are related if certain values of one variable coincide with certain variables of another variable. Lawrence(2009) states that when the values of one variable produce the values of the other variable. mediator variable consists of strategy approach in order to gain the improving in rent arrears management. the researcher are using independent variables.2002. factors influencing rent arrears problems.2000).Zikmund.0 3. Among these methods. Hence. A causal explanation exists when there is a correlation between an independent variables (input) and a dependent variable (output) (Wikipedia. Mediator variable that has been chosen is functional in influencing the strength of a relationship between two other variable (independent and dependent variable). questionnaires are a popular means of collecting data because it can cover a large number of people or organizations and relatively cheap ( de Vaues. In this study. In this research. According to DSJ Research Ltd (2009). causal research explores the effect of one thing or the effect of one variable on another. There are many methods of collecting data and the main methods such as questionnaires. mediator variable and dependent variable Independent variable are sociodemographic of tenants. interviews and observations.2009).3.

. A likert scale is a psychometric scale commonly used in questionnaires. Likert scale was used in this study to generate statistical measurement of people’s attitudes and opinions. consists of question on satisfaction of the organizational’s rent payment management. The advantages of using Likert scale are obvious that “they are easy to construct.2009). The third dimensions.2009). The first dimension and second dimensions are self-assessment including personal financial management question and items of phenomenon question related to the knowledge on arrears management.Measurement of Variables In this study.2009). This part was devided into four dimensions. questionnaires are used to be instrument for analysis and which can be divided into two parts: Part A: Tenant’s demographic Background Part B: Questions related to variables answered in a six-point Likert scale. the fourth dimensions are to measure the improvement on rent collection and arrears management. The second part consists of questions to measure the independent variables and dependent variables. the tenant as the respondent’s demographic profiles were asked. Respondents specify their level of agreement to a statement when responding to a Likert questionnaire item. Likert scale is a direct measure of attitudes developed by Rensis Likert (Keegan. In first part. administer and score” (Keegan. and is the most widely used scale in survey research(Wikipedia.

Convenience random sampling is one of the main types of non-probability sampling methods. in areas of Johore Bahru. According to Changing Minds(2009). Hence. A person’s attitude is the summed score from each question.Extemely agree Research sample The target population is the tenant which deals with the property and housing management.Very disagree 3. Likert scales are also known as summative scales. Convenience random sampling was used in this study. A likert scale adds up responses to statements representative of a particular attitude. each item may be analyzed separately or in some cases item responses may be summed to create a score for a group of items.Extremely disagree 2. The respondent obtained by people who come to the place which intent to deal in rental agreement. A convenience random sampling is made up of people who are easy to reach. .Somewhat agree 5.Very agree 6.After questionnaire is completed. convenience random sampling generally assumes a homogeneous population that one person is pretty much like another. Likert scale was used as indicated below: 1.Somewhat disagree 4. The researcher choosing a few property and housing management as the location.

SPSS is a good first statistical package for people wanting to perform quatitative research in social science because it is easy to be used and can be a good starting point to learn nore advanced statistical packages (Harvard-MIT Data Center. Statistical Package for the Social Science 16. obtained raw data will be analysed by statistical method.0) computer software was used. It is a method of analyzing or representing statistical data or a procedure for calculating a statistic.0 (SPSS 16. In this study. There are many software in the market for analyzing social science study.2009). The data collected from the survey was tested using statistical techniques such as frequencies distribution .Data Analysis In research.

.Tackling Rent Arrears in Wales.org/explanations/research/sampling/convenience_sampl ing. Brining Council Tenants' Arrears Under Control (London: HMSO) Bines... Managing Social Housing (London: HMSO) Capita Conference (2005). Pleace. The Nature and Effectiveness of Housing Management in England (London: HMSO) Clive Grace(2004) . (1989).BIBLIOGRAPHY Audit Commission (2002) . Radley.Convenience Sampling.A.Surveys in Social Research.(2002). The National Perspective. Kemp.Sydney:Allen & Unwin DSJ Research Ltd. Audit Commission in Wales De Vaues. (1993).(2009).What is Causal Research? Retrieved on February 23.htm Centre for Housing Research & Clinton et.al. C. W.Solution To Improve Rent Collection( Central London) Changing Minds (2009). N.D. P.2011 from . Retrieved February 23.Housing Benefit. London: Audit Commission Audit Commission (1984). Arrears Management in Social Housing. from http://changingminds.2011.

Likert Scale. Cameron.. R.(2009).from http://en. London: ODPM . Kirby. and Mountford. May 1980 pp..lordsucth.G. Prescott-Clarke.net/index2.2011. (1994) .2011. S. K.htm Lawrence.Glosary.. and Smith. Housing.harvard. K.(2009). H. T.2011 from http://www.//www. J.Retrieved on January 13.com/po1251/shively-6. B.wikipedia. S. (1983) . Closing the Gap: Working together to reduce rent arrears.edu/projects/SPSS_tutorial/spsstut.. Gilroy.co. Finch. Audit Commission Wales Gray.http://www. S. D.php?option=com_content&do_pdf Duncan.Retrieved on 24 February.uk/glosarry.Writing a Research Investigation Report. London: DoE/ HMSO Harvard-MIT Data Center. A.1417 Scott.Guide to SPSS. from http://gerardkeegan.2011.C.Rent Arrears in Local Authorities and Housing Associations in England. (2002).hmdc. Wikipedia.(2009). (2005) Improving the Effectiveness of Rent Arrears Management: A Guide to Good Practice..marketresearchworld.shtml Keegan.Causal Theory and Research Design.pdf.org/wiki/likertscale Housing Corporation (2000) Source 46: Registered Social Landlords in 2000: performance indicators (Housing Corporation) Radford. Retrieved January 18.from http.Preventing Rent Arrears (HMSO: London) Evans. (1983) Rent Arrears: a basis for comparison.(2009). R.Retrieved on January 12. & Kirby.