In our first blog installment, we exposed the hard truth that today’s approaches to Agreements are failing both landlords and tenants. What should be a powerful tool for sustainable arrears management has grown bogged down in systemic flaws, from outdated technology to unmanageable caseloads. Now, we turn to solutions.
This blog outlines the key areas of opportunity for income team leaders to transform Agreements into a powerful and empathetic tool for empowering tenants while boosting arrears recovery rates.
Firstly, it’s important to clarify what landlords can realistically control to improve Agreement outcomes.
Agreements success depends on factors at different levels. Some, like broader structural and social influences, heavily impact adherence but lie mostly beyond landlords' control. Others - such as the systems and practices used to create and manage Agreements - are directly within landlords' power to change.
By focusing on controllable factors, landlords can drive meaningful improvements in Agreements outcomes. Better yet, when landlords optimise how Agreements are created and managed, the resulting boosted success rates create positive ripple effects over time.
Our research reveals a number of key priority areas within landlords' control that could transform Agreements success rates.
Tenants are far less likely to adhere to Agreements they perceive as imposed rather than co-created. Therefore, it’s crucial to involve tenants in the process of setting terms and give them a genuine say to foster a sense of shared ownership and commitment.
However, many organisations lack the structured systems and training needed to enable officers to engage in meaningful interactions at these ‘golden moment’ opportunities.
In the full report, we highlight the training and process improvements to equip officers for meaningful, empathetic, and collaborative conversations, along with system supports that enable more informed decision-making during tenant negotiations.
Cadence - the combination of payment value, frequency, and number of instalments - is a critical factor in Agreement success. The key is to optimise this cadence, ensuring repayments are both sustainable for tenants and effective for recovery.
Trust plays an important role in determining affordable instalment amounts. Allowing tenants to self-report what they can afford, and taking this at face value, can strengthen the landlord-tenant relationship. However, discretion is also essential. While some tenants may underestimate what they can afford, others may actually overcommit.
It’s not just about installment amounts, however. It’s also advisable to develop repayment timelines that take into account customers’ preferences and circumstances to foster stronger commitment and buy-in.
Agreement payments compete with many other financial obligations - some essential, others discretionary. Agreements can fall to the bottom of the priority list simply because social landlords don’t employ the aggressive tactics used by other creditors, such as late-night calls or knocks on doors.
Timely, persuasive intervention can enable landlords to ethically compete with other financial demands. This requires treating each tenant as an individual, through personalised support, flexible adjustments during seasonal pinchpoints, and proactive reminders at the first sign of potential Agreement failure.
Without psychological buy-in to Agreements, tenants may grant themselves “internal permission” to miss payments.
For example, tenants can perceive Agreements are an unconditional entitlement; likewise, a lack of consequences can inadvertently create a perception of ‘external permission’ to miss payments. Therefore it can be beneficial to introduce a sense of eligibility and potential to lose the opportunity of entering into an Agreement, even if subtly.
Conversely, positive reinforcement for adherence can help build new habits and strengthen commitment. For example, systems that automatically send positive messages when payments are made can reinforce good behaviour and foster a sense of achievement.
Effective Agreements management relies on the ability of officers to harness data for strategic and operational insights. Integrated systems are therefore critical for monitoring how Agreements are performing against expectations and to share vital information across departments and with senior levels of the organisation. Despite this, Agreement performance data is often siloed within income teams, or not reported at all, because existing systems lack the functionality to report effectively.
There are wide reaching potential benefits that improved reporting could deliver, from better planning and forecasting to more targeted interventions. Better data insights can also support allied requirements, such as improving officer training and development, as well as providing crucial legal and compliance data.
In our final installment, we present an evidence-based framework for structured yet empathetic Agreements management - building on all the key themes above. We’ll also explore how technology enables the ‘golden moments’ approach, turning insights into actionable processes.
To read the full whitepaper, download for free here!