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Debt Recovery Policy

Download Evolve Housing 'Debt Recovery' Policy (PDF)

Contents

1. Purpose
2. Scope
3. Definitions
4. Policy statement
4.1 Advising current tenants of arrears on their tenancy accounts
4.2 Managing current accounts in arrears
4.3 Minor outstanding debt owed to Evolve Housing
4.4 Major outstanding debt owed to Evolve Housing
4.5 Order of termination and possession
4.6 Managing vacated accounts
4.7 Tenants who vacate and are no longer being housed by Evolve Housing
4.7.1 Credit balances
4.7.2 Debit balances
4.8 Tenants who vacate and are going to another social housing property
4.8.1 Credit balances
4.8.2 Debit balances
4.9 Further information
5. Responsibilities
6. Related resources
7. Where to get more information

1. Purpose

This document defines Evolve Housing’s policy on tenancy charges including rent and non-rent debts.

Evolve Housing requires all tenants living in property owned or managed by Evolve Housing to pay tenancy charges. Tenancy charges include rent and non-rent debts - including any combined former debt.

Evolve Housing will establish a separate account for rent and non-rent accounts.  As charges become due, Evolve Housing will add the charge to the relevant account.  The tenant is required to meet their obligations to pay those charges as they become due.

Should a tenant move out of their property, Evolve Housing will calculate all charges and payments relating to the property, up to the date the tenant has returned the vacant property to Evolve Housing.  Any debit amounts remaining are known as vacated account debt.

2. Scope

This policy applies to tenants and former tenants of property owned or managed by Evolve Housing.  Evolve Housing will treat debt recovery with sensitivity and have an emphasis on privacy whilst recognising the capacity of the individuals to meet their commitments.

The impact upon an organisation, such as Evolve Housing, to function as a social housing provider, is dependant upon not carrying debt. Tenants are required to pay rent in advance, in accordance with their Residential Tenancy Agreement; failure to pay as agreed will result in Evolve Housing commencing arrears action. 

Evolve Housing understands there are competing demands upon families to meet their commitments; however the payment of rent and non-rent is considered a priority.  Evolve Housing will treat the recovery of rent and non-rent arrears with privacy and sensitivity.

Tenants may, under certain circumstances, enter into an agreement with Evolve Housing to repay their debt.  Evolve Housing will take a staged approach to debt recovery by allowing a tenant to enter into an agreement to repay their debt over a period of time.  If the agreement is breached, Evolve Housing may take formal action for the recovery of a debt through the NSW Civil & Administrative Tribunal (NCAT).

3. Definitions

  • Applicant – the person who makes the formal application for housing assistance
  • Tenant – the person who signs the Residential Tenancy Agreement with Evolve Housing
  • Resident – a person who lives in the property on a permanent basis
  • Spouse – a husband or wife considered in relation to their partner
  • Household members – all people living in the home regardless of age or relationship

4. Policy statement

Evolve Housing is committed to maintaining its function as a social housing provider.

Evolve Housing is able to apply and recover tenancy related charges in accordance with the provisions of the Residential Tenancies Act 2010 and the Housing Act 2001.

Tenants have a legal obligation to pay their tenancy charges as they become due.  If tenants do not make payments, their accounts will fall into arrears; this will result in a breach of their tenancy agreement.

Tenants must notify Evolve Housing immediately if they are unable to make payments.  Evolve Housing will work with tenants to ensure they meet their obligations to pay their tenancy charges.  However, Evolve Housing will take appropriate legal action when there are major or persistent arrears.

Former tenants must pay all money owing on vacated accounts.  Evolve Housing will take action through the NCAT to recover monies owing, or pursue legal action if former tenants do not make repayments.  Evolve Housing will refund any credit amounts.

4.1 Advising current tenants of arrears on their tenancy accounts

Evolve Housing will always contact tenants in writing if their accounts fall into arrears. Additionally Evolve Housing may also contact tenants by phone, or by visiting them in their homes.  Evolve Housing will respond quickly to ensure the tenant pays their tenancy charges on time and to help prevent the debt from escalating.

4.2 Managing current accounts in arrears

Evolve Housing reserves its right to issue a Notice of Termination in accordance with the Residential Tenancies Act 2010, if there have been breaches of the residential tenancy agreement.

Before taking action at NCAT, Evolve Housing will work with the tenant to try to resolve any problem relating to their non-payment of monies owing to Evolve Housing.

Prior to taking action at NCAT, Evolve Housing will consider the following:

  • The tenant’s payment patterns.
  • The amount of time the tenant has been in arrears and the amount of arrears.
  • The reason for the tenant being in arrears.
  • The tenant’s ability and willingness to repay the arrears.
  • Possible involvement of support services.
  • Previous arrears patterns, including the steps that have been taken to resolve the problem.

Evolve Housing will then consider whether to:

  • Negotiate a repayment arrangement.
  • Apply for a Specific Performance Order (SPO).
  • Issue a Notice of Termination (NOT).
  • Apply to NCAT for an Order of Possession (OOP).

Evolve Housing may refer a tenant to various financial and other support services in order to assist in managing their arrears.

If a tenant goes into arrears, Evolve Housing will negotiate a reasonable repayment arrangement with the tenant.  A debt can be repaid in full or by instalments. Evolve Housing expects all outstanding debts to be repaid as soon as possible.

Where a tenant claims financial hardship or other difficulties that may affect their ability to meet the proposed repayment plan, they will need to supply evidence of their financial position.  Upon receipt of such evidence, Evolve Housing may consider a lesser repayment.

If Evolve Housing is unable to negotiate a reasonable repayment arrangement, it will escalate the arrears recovery process.  Depending upon the circumstances, Evolve Housing may apply to NCAT for a Specific Performance Order, or for an order to terminate the tenancy.

Evolve Housing will in the first instance; seek a lump-sum payment, usually half the amount outstanding, in order to clear the arrears quickly.  Thereafter, a reasonable repayment arrangement is considered to be a sum equivalent to two days rent each week in addition to the weekly rent.

4.3 Minor outstanding debt owed to Evolve Housing

A major debt is a debt that cannot be repaid within a three month time-frame.  All major debts that cannot be repaid within three months must be taken to NCAT, where, in the first instance Evolve Housing will seek an SPO.  The SPO will set out the method and amount of payment required to clear the debt within a reasonable period (usually a maximum of six months).

Should the tenant breach the terms of the SPO, Evolve Housing will return to the NCAT and seek an Order of Termination and Possession. 

4.4 Major outstanding debt owed to Evolve Housing

A major debt is a debt that cannot be repaid within a three month time-frame.  All major debts that cannot be repaid within three months must be taken to the NCAT, where, in the first instance Evolve Housing will seek an SPO.  The SPO will set out the method and amount of payment required to clear the debt within a reasonable period (usually a maximum of six months).

Should the tenant breach the terms of the SPO, Evolve Housing will return to NCAT and seek an Order of Termination and Possession. 

4.5 Order of Termination and Possession

An Order of Termination and Possession is an order granted by NCAT which legally ends the tenancy on a certain date.  An Order of Possession sets a date by which the tenant must vacate.  If a tenant fails to vacate the property by the date in the possession order, Evolve Housing will apply for a Warrant of Possession requesting the NSW Sheriff’s Office to evict the tenant. 

4.6 Managing vacated accounts

When a tenant moves out of an Evolve Housing property, all charges and payments relating to the property will be reconciled.  This may result in an amount remaining as a credit or debit.  In order to manage any refund or debt notices, it is important the tenant provides Evolve Housing with a forwarding address.

4.7 Tenants who vacate and are no longer being housed by Evolve Housing

Evolve Housing will automatically transfer balances between the tenant’s accounts if the tenant has left the property and will no longer be housed by Evolve Housing. 

If there is a credit balance on one account and a debit balance in another, Evolve Housing will use the credit to pay off the debit.

Where possible Evolve Housing will advise the former tenant in writing of their final accounts, including whether any amount has been transferred between accounts and the reasons for the transfer.

4.7.1 Credit balances

Evolve Housing will refund credits where an account is in credit or an extra deduction has been made from the tenants Centrelink payment after they have left the property, or where the tenant’s financial institution has deducted an additional amount by direct debit after the tenant has left the property.

If the total credit amount is more than fifty dollars ($50.00), Evolve Housing will attempt to find the former tenant and refund the money.  If the amount is less than fifty dollars, Evolve Housing will refund the money when the former tenant requests a refund. 

If a former tenant is deceased, Evolve Housing will refund any credit to the Executor of the former tenant’s estate.

If the tenancy is a joint tenancy, Evolve Housing will divide any credit amount equally amongst all the former tenants.  One of the former tenants may provide written authority to pay their share or a nominated amount of their share of the refund to another of the former tenants.

4.7.2 Debit balances

Evolve Housing will waive debit balances where the tenant is deceased, or the former tenant is declared bankrupt. The debit in this instance will be waivered up to the date of the bankruptcy.  Any debit after that date will be pursued.

If a former tenant does not repay the debt in full, Evolve Housing will apply to NCAT for an Order of Payment of Monies Owing (which is not time limited) and also verbally request a Certified copy of Money Order. Evolve Housing may also refer the account for recovery to a Mercantile Agent.

Alternatively when the whereabouts of the ex-tenant is known, Evolve Housing may take recovery action either through a Letter of Demand or a Mercantile Agent.

If a tenant leaves their property owing Evolve Housing money, the debt will be recorded on Housing Pathways which may effect eligibility for social housing in the future or may restrict the services available to the former tenant until the debt is repaid or an offer of repayment is entered into HOMES.

The information relating to money owing or arrangements entered into will be recorded on Housing Pathways “HOMES” computer system.

If a joint tenancy account is in debit, all the former tenants are liable for the debt.  If one of the former tenants reapplies for assistance, they will have to arrange to repay all money owing.

4.8 Tenants who vacate and are going to another social housing property

Where a tenant will be housed in another Evolve Housing property, Evolve Housing will not automatically transfer balances between former accounts or from a former account to a new account.  Evolve Housing will manage credit and debit balances as outlined below.

4.8.1 Credit balances

Tenants may agree to transfer a credit balance to pay off a debit balance on their former or new accounts or transfer a credit balance to their new account.

4.8.2 Debit balances

Evolve Housing will not transfer a tenant if they have a debit balances at their current property. However, Evolve Housing will manage debt recovery action as a part of the current tenancy (see Evolve Housing Transfer Policy). 

Under Section 140 of the Residential Tenancies Act 2010 a tenant who has an outstanding debt from a former tenancy will make a reasonable arrangement to repay the debt and continue making repayments, or Evolve Housing may take action against their new tenancy through the NCAT.

4.9 Further information

When making decisions about managing accounts, Evolve Housing will consider various information and evidence. If a tenant disagrees with a decision Evolve Housing has made, they should first discuss their concerns with a Housing Manager. 

The next step, if they still believe Evolve Housing has made an incorrect decision, is to lodge a formal appeal of the decision (see our Appeals Form). 

For information on how an appeal works, see our Appeals Factsheet and Appeals Policy.

A tenant can only ask for a formal review of tenancy charges if they believe Evolve Housing did not calculate the rent subsidy correctly, or has not correctly credited payments for tenancy charges or Evolve Housing cancels their rent subsidy.

The tenant cannot ask for a formal review if rental arrears results in eviction proceedings.  In these cases, an independent body called the NSW Civil & Administrative Tribunal (NCAT) will hear the matter.  The role of NCAT is to resolve disputes between tenants and Landlords.

Evolve Housing can be contacted at:

Henry Dodd House, 9-13 Argyle Street, Parramatta, NSW 2150

P.O Box W124,Parramatta, Westfields NSW 2150

info@evolvehousing.com.au

This policy is subject to change from time to time at the discretion of Evolve Housing.  Where an individual is observed to not be working within the scope of this policy, the breach will be addressed by a team leader.

5. Responsibilities

It is the responsibility of the:

Chief Executive Officer to ensure this policy and associated procedures are applied and committed to by the Executive Leadership Team.

People & Culture Department to provide Team Leaders with timely policy-related support and guidance.

Leadership Team/Team Leaders to ensure familiarity with this policy and related procedures, to commit to following them accordingly and where relevant, promote the policy to their team.

Employees to ensure they comply with this policy, be responsible for their own behaviour and if required, attend relevant training as provided by the company from time to time.

6. Related resources 

7. Where to get more information

Contact Evolve Housing on 1300 692 245 or 02 8862 1500 or info@evolvehousing.com.auFor further information see our Appeals Policy and Appeals Factsheet. 

Document No:  HS016.2.0  |  Approved:  20/09/2013  |  Review Due:  20/09/2014