Social housing allocations legal framework: statutory guidance for social landlords

13.  Rent Arrears or Other Outstanding Liabilities Related to a Tenancy

13.1 In making allocations landlords can take into account outstanding debts which relate to the tenancy of a house, such as rent or service charges. However the law^[11] does not allow landlords to take account of rent arrears or debts which fall within the following categories:

• any outstanding liability (such as rent arrears) attributable to the tenancy of a house of which the applicant is not, and was not when the liability accrued, the tenant;
• any rent or other liabilities accrued by the applicant on a previous tenancy which are no longer outstanding;
• any such liability which is outstanding but where the amount outstanding is not more than 1/12th of the annual amount payable (or which was payable) by the applicant to the landlord in respect of the tenancy; or the applicant has both:
  • agreed arrangements with the landlord for paying the outstanding liability; and
  • made payments in line with that arrangement for at least three months and is continuing to make such payments;
• any outstanding liability of the applicant or anyone who will live with the applicant which do not relate to the tenancy of a house.

13.2 These provisions are aimed at limiting the circumstances in which landlords refuse to allocate a house to an applicant because of their or others' earlier debts. In some circumstances it may be reasonable for a landlord to decline to allocate a house to an applicant if they have significant unpaid rent arrears or service charges. Landlords are not prevented from doing this however landlords cannot refuse to allocate a house to an applicant:

• because of non-housing debts;
• where previous arrears of rent or service charges have been paid;
• where the rent or service charge arrears amount to no more than a month's rent or charges; or
• where the applicant has come to an arrangement with the landlord for paying arrears, has kept to the arrangement for at least three months and is continuing to make the payments.

13.3 Local authorities which are considering refusing to allocate a house to an applicant because of significant unpaid rent arrears or service charges should also consider what duties they may have to the applicant under their homeless responsibilities. This will involve determining whether they are homeless, and if so, whether they are unintentionally homeless. Local authorities may also consider whether the applicant has a local connection with the landlord's area or another area. The Code of Guidance on Homelessness includes approaches to households who have become homeless due to financial problems.