Download - Tenancy Management Manual · Web viewA rental and/or maintenance arrears repayment agreement made between the department and a tenant or former tenant to repay rental arrears in regular

Tenancy Management ManualChapter 1: Arrears

October 2017

Revision history

Version Amended section Effective Details

1.0 October 2017 Incorporation of version control tableAccessible format

More information

To find out about housing options visit the Housing website <http://www.housing.vic.gov.au> or contact your local Housing Office <http://www.housing.vic.gov.au/contact-a-housing-office>.

To receive this publication in an accessible format contact Housing Practice and Complex Support <[email protected]>.

Authorised and published by the Victorian Government, 1 Treasury Place, Melbourne.

© State of Victoria, Department of Health and Human Services, October 2017.

ISBN: 978-1-76069-066-3 (pdf/online/MS word)

Available on the Tenancy management manual page on Services Providers website <http://providers.dhhs.vic.gov.au/tenancy-management-manual>.

http://providers.dhhs.vic.gov.au/tenancy-management-manual

http://www.housing.vic.gov.au/contact-a-housing-office

http://www.housing.vic.gov.au/

Contents

Revision history........................................................................................................................................ 2

More information...................................................................................................................................... 2

1.1 Definitions....................................................................................................................................... 5

1.2 Policy and Procedures.............................................................................................................71.2.1 Introduction................................................................................................................................... 7

1.2.2 Aim............................................................................................................................................... 7

1.2.3 Rental charges and payments......................................................................................................7

1.2.4 Debt recovery principles...............................................................................................................7

Record keeping......................................................................................................................................... 9

Procedure.................................................................................................................................................. 91.2.5 Debt recovery action..................................................................................................................... 9

1.2.6 Suppressing an account.............................................................................................................10

1.2.7 Initial arrears letter...................................................................................................................... 11

1.2.8 Rental arrears of less than $5.00................................................................................................11

1.2.9 Arrears greater than $5.00.........................................................................................................11

1.2.10 Local Agreements....................................................................................................................... 12

1.2.11 Number of Local Agreements.....................................................................................................14

1.2.12 Negotiating a Local Agreement..................................................................................................14

1.2.13 Creating an agreement...............................................................................................................15

1.2.14 Revising agreement repayment levels........................................................................................15

1.2.15 Monitoring Local Agreements.....................................................................................................15

1.2.16 Broken Agreements.................................................................................................................... 15

1.2.17 Issuing a Notice to Vacate..........................................................................................................16

1.2.18 Application for VCAT hearing.....................................................................................................17

1.2.19 VCAT hearings........................................................................................................................... 17

1.2.20 Prepare for the VCAT hearing....................................................................................................18

1.2.21 Withdrawing and adjourning, hearings.......................................................................................18

1.2.22 Legal Agreements...................................................................................................................... 18

1.2.23 Renewal of proceedings.............................................................................................................20

1.2.24 Order for Possession.................................................................................................................. 21

1.2.25 Order for Possession Agreements..............................................................................................23

1.2.26 Monitoring Order for Possession Agreements............................................................................25

1.2.27 Broken Order for Possession Agreements.................................................................................26

1.2.28 Deciding whether or not to obtain a Warrant of Possession.......................................................26

1.2.29 Purchase and issue Warrant of Possession...............................................................................29

1.2.30 Extend the Warrant of Possession.............................................................................................30

1.2.31 Execute Warrant of Possession..................................................................................................31

1.2.32 Warrant Application Outcome Notices........................................................................................31

1.2.33 Movable units............................................................................................................................. 32

1.2.34 Tenants in Housing and Support Program properties.................................................................32

1.2.35 Rental arrears greater than $10,000...........................................................................................32

Appendix 1.............................................................................................................................................. 34Rental arrears procedures flow chart........................................................................................................34

Appendix 2.............................................................................................................................................. 35Text alternative for Rental Arrears procedures.........................................................................................35

1.1 Definitions

Term Definition

Assessable Income Income received by tenants, occupants of movable units and all household members that is used to calculate the rent payable and repayment agreements for the household. Assessable income is listed in the Rental Rebates Policy.

Department Department of Health and Human Services, formerly described as the department in housing policy and procedure manuals.

Determination The decision or order made by a Chairperson at VCAT after hearing evidence regarding a tenancy matter. The order is read out by the Chairperson at the hearing and a copy of the order is then sent to both parties.

Eviction The process of removing a person(s) from the occupation of a property, after a Warrant of Possession has been obtained. The Warrant of Possession is executed by the Police.

Fluctuating Wages The amount received in wages varies from week to week e.g. nurses, casual employees and seasonal workers.

Future Tenancy Plan The Future Tenancy Plan (FTP) process replaces the Warrant application briefing process and can also be updated or created once an Order for Possession has been granted.The FTP process extends upon the previous process in that the HSO is able to document the conversations had between them and the client and senior management about how to proceed with a particular tenancy.

Hearing A proceeding conducted at VCAT in an attempt to resolve tenancy related issues based on the evidence presented.

Hearing Adjourned A hearing at VCAT that has been postponed until the next available sitting or for a set period (e.g. three months), during which an application can be made to renew the proceedings.

Hearing Withdrawn A scheduled hearing at VCAT that has been withdrawn.

HiiP Housing Integrated Information Program – which is the computer system used by DHS operational staff to deliver housing services.

HiiP workflow An automated process in HiiP that manages the movement of work to ensure that all necessary actions are completed.

Housing Act 1983 Legislation that governs the provision of housing assistance and the associated financial framework.

Lapse of Warrant of Possession

The termination of a right to execute a Warrant of Possession because the Warrant of Possession has not been executed before the end of the expiry date.

Legal Action Where the department has commenced proceedings to have a matter concerning rental arrears determined at VCAT.

Legal Agreement An order made by a VCAT Chairperson that the tenant repays rental arrears in regular instalments.

Local Agreement A rental and/or maintenance arrears repayment agreement made between the department and a tenant or former tenant to repay rental arrears in regular instalments.

Tenancy Management Manual Chapter 1: Arrears

Term Definition

Make-up Missed Payment

A short term agreement to enable a tenant or former tenant to make up a payment that they have missed making on their Local Agreement.

Non Assessable Income Income received by tenants, occupants of movable units and all household members that is not included when calculating the rent payable and repayment agreements. Non assessable income is listed in the Rental Rebates Manual.

Notice to Vacate A legal notice served on a tenant as per section 246 of the Residential Tenancies Act 1997, where rental arrears of 14 days or more have accrued on a tenant’s rental account.

Order for Possession An order granted by VCAT giving the department the right to obtain a Warrant to evict the occupants and regain possession of the property. The order is valid for a six month period.

Order for Possession Agreement

A rental arrears repayment plan signed between the department and a tenant after an Order for Possession has been granted for the property.

Renewal of Proceedings The request for a further hearing at VCAT under a current determination. A renewal of proceedings can be requested where a hearing has been adjourned and the tenant has accrued further rental arrears or a legal agreement has been broken.

Renewal of Proceedings Hearing Withdrawn

The cancellation of the application to renew proceedings at VCAT for a case which is under a current determination

Rent Deduction Scheme (RDS)

department charges that are debited from a tenant’s Centrelink payment.

Rental Arrears Unpaid rent owing to the department.

Rental General Stock (RGS)

Direct tenure rental properties managed by the department.

Residential Tenancies Act 1997

Victorian legislation that governs residential tenancies outlining the rights and responsibilities of tenants and landlords.

Revised Agreement A Local Agreement where the repayment amount has been renegotiated as a result of a change to household income.

Self Employed Workers A household member working for themselves e.g. sub-contractor or taxi driver.

Support To refer applicant/tenant for support to a community, welfare, health, local government or departmental service or funded service for tenancy support management.

Tenant Contact A home visit or telephone call. If the tenant is not at home, contact is recognised when a calling card is left at the premises or a message is left on a telephone answering machine.

Tenant Responsibility Maintenance Agreement

A repayment agreement signed between the department and a tenant where liability has been accepted by the tenant for damages caused to the rental property.

VCAT Victorian Residential Tenancies Tribunal. A legal institution set up to administer a number of Acts. For residential tenancies, the Tribunal administers the Residential Tenancies Act 1997. The Residential Tenancies List of VCAT hears and determines residential tenancy matters.

Warrant of Possession A legal document issued by VCAT authorising the Police to evict tenants from a property.


1.2Policy and Procedures1.2.1 IntroductionTenants in public housing are required, under the tenancy agreement they enter with the Department of Health and Human Services (the department), to pay their rent in accordance with the Residential Tenancies Act 1997 (RTA).

The department recognises that from time to time some tenants will experience difficulty meeting their regular rental payments, resulting in either late or missed payments.

Tenants accruing rental arrears are of concern for the department on two levels:

• Tenants with arrears place their tenancy at risk, particularly where the debt level is increasing• Rent is the main source of revenue for the department. Unpaid rent impacts on the ability to deliver

housing services and consequently the ability to assist Victorians with their housing needs.

1.2.2 AimThe department’s Rental Arrears Policy and Procedures aim to:

(a) assist tenants to sustain their tenancy by:

• preventing and reducing rental arrears• ensuring debts are fully paid(b) ensure that rent revenue is collected and available for the provision of housing assistance programs

(c) recover possession of the property and terminate the tenancy where rent arrears are not reduced by the tenant or continue to rise following the application of these policies and procedures.

1.2.3 Rental charges and paymentsThe department charges rent on a weekly basis and these charges are applied to tenants’ rental accounts each Sunday.

The department requires all tenants to pay their rent in advance, so that their account does not fall into arrears. As rental charges are applied on a Sunday, rental payments must be made at least one day before the Sunday rental charge.

RTA (s.3) Tenants can elect to make their rental payments weekly, fortnightly or every four weeks, with the amount they pay corresponding to the frequency. For tenants who pay their rent weekly, their payment must be made prior to the next rental charge. For tenants who pay fortnightly the payment they make must place their account two weeks in advance (prior to the rental charge being applied on the coming Sunday).

1.2.4 Debt recovery principlesThe following arrears recovery principles guide the action taken by the department to recover debt:

• early intervention• maximising verbal contact and keeping tenants fully informed• early and ongoing referrals to support services• escalating action when arrears increase or remain unpaid and the local or Legal Agreement is not

being fulfilled by the tenant.


Early interventionSustaining tenancies relies on the department taking prompt action to minimise arrears escalation.

The Centrelink Rent Deduction Scheme (RDS) is utilised to assist tenants with a poor payment history to meet their tenancy obligations. RDS provides tenants the maximum opportunity to establish a regular payment pattern in an automated way, enhancing the sustainability of their public housing tenancies.

Early intervention includes initiating preventative action for issues that may result in the tenant missing rental payments, such as making contact with the tenant if they cancel their RDS through Centrelink or where they have not responded to a rebate contact review that may result in their rebate being cancelled.

Other measures include identifying issues which are impacting on the tenant’s ability to pay rent and to link them with services which may assist them (see Early and Ongoing Referral and Support below).

Repayment agreements are negotiated as early as possible for tenants to repay debts owed to the department.

Maximising verbal contact and keeping tenants informedWhilst the department relies on written communication to inform tenants of any rental arrears, if tenants do not respond and have not had recent verbal contact with the department in relation to their rental situation, a Housing Services Officer (HSO) will attempt to make contact with the tenant by telephone or a home visit.

When contact is made and arrangements to repay the debt have been negotiated, the department will confirm them in writing. The tenant is also fully informed of the future action that the department may put in place if the arrangements are not met.

Early and ongoing referral and supportIt is recognised that the reasons tenants fall into arrears are varied.

Where a tenant does not fully pay their rent and their account falls into arrears, or arrears levels increase, the department will initially make contact by letter (initial arrears letter). If the missed payments are not paid by the tenant, a HSO will make contact with the tenant. This can be done by text message, phone call or a home visit.

Contact with the tenant may identify a need for support from a third party. Where this occurs the HSO will discuss this with the tenant, and with their consent will make a referral to an appropriate support agency. In circumstances where support is already in place, and the tenant has consented to the department contacting the support agency, the HSO may make contact with this agency to discuss any concerns in relation to the rental payments and/or the tenancy in general.

Where an eviction is imminent and the tenant has not engaged with the department, in exceptional circumstances the department may involve a support agency without the express consent of the tenant. This can occur if the relevant staff member dealing with the matter reasonably believes that this is necessary to lessen or prevent a serious and imminent threat to an individual’s life, health, safety or welfare. Information Privacy Act 2006, Information Privacy Principles (IPP) 2.1(d) (i).

This is a final attempt to sustain the tenancy or arrange alternative housing options in an effort to avoid a serious threat to the tenant or a household member.

In addition, in the case of tenants who may be clients of other programs within the department, regions will have local strategies to identify mutual clients. This generally occurs where the department has obtained an Order for Possession. This identification of mutual clients is aimed at maximising support to assist clients to meet their tenancy responsibilities and avoid further action that may lead to eviction.


Referrals if significant concerns for wellbeing of child or child is in need of protectionWhere Housing staff are satisfied that an eviction raises significant concerns that a child is in need of protection or there are significant concerns for their wellbeing, discuss this with a supervisor or manager. The matter may then be reported to the local Executive Officer responsible for public housing who will liaise with the Child Protection Service in the region if they determine the matter should be reported.

Individual regions may have protocol agreements with the local Child Protection Service for notifications of concerns regarding the wellbeing of a child or to inform them of decisions made on behalf of the Director which may impact on a child (e.g. when an eviction is arranged). A report may also be required under the department’s Incident Reporting Instructions.

Reporting may occur in the following circumstances:

• any person may make a report to the Secretary, Department of Health and Human Services if they have a significant concern for the wellbeing of a child. Children, Youth and Families Act 2005 (s.28)

• any person who has a significant concern for the wellbeing of a child may refer the matter to a community-based child and family service. Children, Youth and Families Act 2005 (s.31)

• any person may make a report to the Secretary, Department of Health and Human Services or the Police if they believe on reasonable grounds that a child is in need of protection. Children, Youth and Families Act 2005 (s.183)

Where there are concerns that a child is in imminent danger, the Police should be contacted immediately.

The disclosure of personal information is permitted where it is required or authorised by law (including under another Act) i.e. Information Privacy Act 2006 (IPP) (s.2.1 (f))

Record keeping

Procedure

All contact with tenants must be recorded on HiiP, including summaries of text messages, discussions, telephone calls, agreed action dates and home visits. This ensures that other Housing staff will know exactly what is happening with the account and tenancy if they are required to assist a tenant.

This information will also be important if legal action is commenced for arrears recovery.

1.2.5 Debt recovery actionWhen a tenant falls behind in their rental payments, there is a range of action that the department will initiate to recover the debt. The specific action taken for each case will depend on:

• the tenant’s payment history for their current tenancy• the level of tenant engagement with their local Housing Office to resolve the issue• the level of debt.A tenant’s previous tenancy history may also be used to inform the type and level of support required to manage the process of arrears recovery. When contact is made with the tenant to discuss their debt, the ability for them to repay the debt in full will always be discussed as the preferred option.


However where a tenant is unable to pay a debt in full, depending on the tenant’s payment history, and where they are in the ‘debt recovery cycle’, there may be the opportunity to negotiate for the debt to be repaid by instalments. This is referred to as an Arrears Agreement.

There are three forms of arrears agreements and the terms of repayment differ for each:

• Local Agreement• Legal Agreement• Order for Possession Agreement.Obtaining a Warrant of Possession is only ever sought as the last resort, and eviction action will only proceed where all practically available avenues of tenant engagement have failed and the arrears continue to increase and/or the tenant does not meet the terms of their final repayment agreement.

Reviewing other tenancy management detailsWhen contact is made with tenants and there has not been recent contact (e.g. within the last two to three months), the following details should also be checked to ensure the account and payment details are current:

• Reviewing Payment Methods - If the tenant is not currently paying their rent by RDS, provide them with information about this service

• Checking Household Details - Check that household details including income/assets are current (including participation in Income Confirmation through Centrelink)

• Support and Referral – The tenant is made aware of any support or advocacy should they require it. If they do have supports, ensure that details are recorded on HiiP.

If tenant disputes the level of debtWhere a tenant disputes the level of arrears, the department will provide a full statement of charges and receipts for the period in question, and where necessary provide the tenant and/or their support worker or advocate, with an explanation of the statement.

Where the tenant continues to dispute the debt and the department is satisfied that the debt balance and all rental account transactions are correct, the department may initiate legal action (via a Notice to Vacate(NTV) , or a Renewal of Proceedings if legal action has already been initiated) to have the matter heard at Victorian Civil and Administrative Tribunal (VCAT), whereupon a Chairperson will determine the amount of arrears when making an Order. Refer to page 16 1.2.17 Issuing a Notice to Vacate and page 20 1.2.23 Renewal of Proceedings for further information.

Inform the tenant of their right to appeal if the dispute is based on a rebate assessment which has resulted in all or part of the rental debt. In the case where such an appeal application is made, legal action should be postponed until the appeal has been determined. If legal action has already been commenced, an adjournment should be obtained.

1.2.6 Suppressing an account

ProcedureWhere contact with a tenant has been made and it is agreed with the HSO that time is required by the tenant to bring the account up to date, the HSO can put the automated monitoring of the account on hold for a week. This prevents automatic letters being generated and other automated actions being undertaken by HiiP.

Where a suppression period of two weeks is required, a Team Manager must make that decision.

The situations in which this suppression may be appropriate include:


• Account is not in arrears or has small arrears – the tenant advised that their next payment will be late. A suppression will stop the Initial Arrears Letter being automatically generated by HiiP

• Account is on an agreement – the tenant has advised their payment will be late. Suppression will stop the account moving to ‘broken agreement’ status and allow the tenant to make the late payment before the next one is due.

If the missed payments are not brought up to date when the suppression lifts, the account will automatically move to the next appropriate debt recovery action at the next batching date (the next Sunday).

1.2.7 Initial arrears letterWhen a tenant’s rental account falls into arrears, an Initial Arrears Letter is sent detailing their outstanding balance including rent in advance obligations. This process is automated for all accounts in arrears of $5.00 or more. The rental account status changes in HiiP to alert the Housing Services Officer that action is required to follow up this debt.

1.2.8 Rental arrears of less than $5.00

Initiate contactWhen a rental debt is less than $5.00, a telephone call is made or an Initial Arrears Letter sent together with a rental account statement showing where the rental amount was missed. If contact is not made following both of these methods, a home visit is arranged.

ProcedureIf the debt is less than $5, the tenant is requested to pay the outstanding amount in full either at the Post Office (with a voucher if the tenant does not have a rent payment card) or through RDS as an additional payment.

If the debt is now greater than $5 (e.g. further week of rent has been missed) and the tenant cannot pay the amount in full, a Local Agreement repayment plan is negotiated. The agreement is recorded on HiiP.

If applicable the following issues are also discussed:

• Rent Payment Methods• Household details• Support and referral information.

1.2.9 Arrears greater than $5.00

Initial Arrears Letter, text message and phone call/home visitWhen a rental account accrues rental arrears of $5.00 or more, an Initial Arrears Letter will automatically be generated by HiiP and sent centrally via a contractor.

The letter details the tenant’s outstanding balance including rent in advance obligations, and requests the tenant to pay their debt in full. However, where the tenant is unable to do this or disagrees with the level of debt, they are required to make contact with their local Housing Office.

Where there is no dispute regarding the debt, the Department will enter into a local repayment agreement with the tenant. Refer to page 12 1.2.10 Local Agreements for further information. Repayment agreements may also include a ‘lump sum’ component.

If the tenant has not made contact with the local Housing Office within 1-2 days after the Initial Arrears Letter has been sent, and their account remains in arrears, the department may attempt to contact the tenant by text message. This text message will remind the tenant that they are in arrears and should


contact their local office. Whether the department chooses to send this text message will depend on the tenant’s payment history, their level of debt, and their pattern of engagement with the local housing office.

If no contact is made by the tenant 3 or more days after the Initial Arrears Letter has been sent, then regardless of whether a text message is sent the department will attempt contact by a telephone call. If contact cannot be made and a message cannot be left the department will attempt contact by a home visit. A card, asking the tenant to contact the department, is left if there is no answer.

Where the debt is equal to or greater than 15 days rent and contact with the tenant cannot be made, the department may initiate legal action by serving a Notice to Vacate. Refer to page 16 1.2.17 Notice to Vacate for further information. This action will generally occur no less than 14 days after the Initial Arrears Letter was sent.

The intention of serving a Notice to Vacate is to escalate the action as quickly as possible, ensuring any further increase in the debt is minimised and that the tenant is aware of the seriousness of the issue.

Procedure

When contact is made

When contact with the local office is made, the tenant is asked how the arrears occurred. If issues of support or referral are identified it may be necessary to involve a current support worker or advocate, or where a tenant does not have support, a referral to an appropriate support provider is made.

The following is also discussed:

• the tenant must pay arrears (including rent in advance)• sign a Local Agreement (weekly repayment levels and lump sum options)• rent payment methods• current household details.If the tenant does not agree to these options, the HSO should explain when the debt becomes greater than 14 days, that a Notice to Vacate may be served so the matter can be considered and determined at VCAT.

If the tenant goes into debt of less than 14 days rent on multiple occasions, and there are no extenuating circumstances such as that child maintenance support payments have been missed or they have fluctuating income, consideration can be given to issuing an Application for Compensation. This would require approval of a Team Manager (TM) and occur where the tenant is unwilling to resolve recurring debt.

1.2.10 Local AgreementsTenants are able to enter into a Local Agreement where legal action has not yet been initiated (i.e. a Notice to Vacate has not yet been served). Generally the debt will be relatively low (e.g. tenant has only recently fallen into rental arrears).

Local Agreements can be negotiated over the phone, at a home visit or at an interview at the local Housing Office.

At the time of negotiating the agreement, the tenant will be asked about the circumstances that led to the non-payment/underpayment of rent. This will assist the department to work with the tenant to determine the most appropriate course of action, and will provide opportunity to assess the suitability of the referral to an appropriate support provider.


Maximum weekly repaymentsIn order to ensure total weekly rental and arrears repayments are manageable, the total weekly repayment amounts should not exceed 5per cent of assessable household income. This ensures the rental payments and the weekly agreement combined do not exceed 30per cent of assessable household income. Higher repayment plans may be approved where the tenant is able to demonstrate that this will be financially manageable, for example via documentation from a financial counsellor or a written undertaking by a relative to provide financial assistance. This will require approval by a Team Manager TM) or Housing Services Manager (HSM).

Minimum weekly repayments

Debts of less than 14 days rent

For tenants whose debt is less than the equivalent of 14 days rental, the minimum repayment amount is 3per cent of the household’s assessable income.

In cases of hardship where the tenant cannot pay the 3per cent, Team Manager or Housing Service Manager approval is required for the lower amount. For debts under $5, a lump sum agreement to repay the total debt should be made to resolve this debt.

Debts of 14 days rent or more

Where the debt is the equivalent of more than 14 days rent, the minimum agreement amount that can be negotiated is 3per cent of the assessable weekly household income. Where tenants advise that this minimum level may not be manageable, the TM is able to approve lower repayment levels. Generally the tenant will be required to provide additional information as to why 3per cent will not be manageable (e.g. they have other debts they are repaying and have received support from a financial counsellor or a relevant case manager who is working with them to address their debts).

Where a tenant’s request for lower repayments is not approved by the TM, the local Housing Office may serve a Notice to Vacate (NTV) and make an application to VCAT (generally to seek a Legal Agreement) where the presiding Chairperson will be asked to determine an appropriate repayment level (see section below on issuing Notices to Vacate).

Tenants paying market rentWhere the tenant is being charged market rent, and this is not based on their current household income (e.g. they have elected not to apply for a rebated rent) the department bases the 3per cent minimum and 5per cent maximum on an assumed income. This income is calculated as four times the market rent, based on the policy of assessing the rent at 25per cent of assessable household income.

ProcedureIn order to apply the maximum and minimum debt repayment policy, where a market rent payer’s income details are not up to date, the HSO needs to input the household income by calculating it to be as four times the market rent of the property. These details are entered in the client register, with a file note explaining this is an imputed income for the purposes of calculating debt repayment amounts.

Lump sum paymentsIn some circumstances tenants may also wish to make a lump sum payment as part of their Local Agreement. For example their first payment may be a lump sum, followed by regular weekly payments set at 3per cent of their assessable income. Where a lump sum is negotiated this forms part of the terms of the agreement.


Tenants with both rental and maintenance arrearsWhere the tenant has both rental and maintenance arrears the total rent payable and the combined agreement amounts cannot exceed 30per cent of the assessable household income.

Tenants are able to sign repayment agreements for both rental and maintenance arrears; the rental arrears portion of the debt will be paid off first, with the maintenance agreement being put on hold until the rental arrears are paid in full.

1.2.11 Number of Local AgreementsTenants are able to have one Local Agreement for each arrears episode. An ‘arrears episode’ begins when the tenant’s rental account falls into arrears, and ends once the arrears are paid in full and the rental account is either one or two weeks in credit for rent depending on the rent payment frequency.

A second Local Agreement can be created in circumstances where:

• a tenant on a Local Agreement does not make payments in accordance with the agreement and the tenant has agreed to commence payments via the Rent Deduction Service

• a reassessment of the debt has occurred due to a rebate backdate.

This second agreement requires approval by a Team Manager.

Tenants who have fully repaid their arrears via a previous Local Agreement and accrue new arrears are entitled to a further Local Agreement. For example, the tenant entered an agreement in January and the debt was repaid by June of the same year. The tenant then missed a rental payment in December of that year and a new agreement was negotiated.

However where there has been previous debt, the level of rental arrears and the length of time since an account was last in arrears will be taken into consideration when determining if a second agreement is appropriate.

Where a second Local Agreement is not considered appropriate, the Department may make an application to VCAT by serving a Notice to Vacate (generally to seek a Legal Agreement).

1.2.12 Negotiating a Local Agreement

ProcedureThe process to create and activate a Local Agreement will differ depending on the circumstances under which the agreement is negotiated:

Office interview - If the tenant is at the office, ensure all discussions and negotiations occur in an interview room. When a repayment plan has been agreed, print and sign the agreement. Ask the tenant to also sign the agreement and provide them with a copy.

Over the Phone – Where an agreement is negotiated over the phone, the start date of the agreement must be at least three working days before the agreement is due to start. This is to ensure there is ample time to send a copy of the agreement to the tenant before the first payment is made and for the client to reapproach the Department.

In all circumstances the tenant is advised to contact their HSO if they are having difficulty meeting payments, so that payment options can be discussed.

They are also advised that an adjustment may be made if the negotiated repayment amount falls outside the minimum and maximum amounts allowable.


1.2.13 Creating an agreement

ProcedureWhen creating an agreement in HiiP, the following information must be recorded:

• Start date – for best practice the Sunday after the next regular rent payment is to be made by the tenant

• Repayment method – can be Rent Deduction Service or Australia Post payment. If RDS or bank direct debit are chosen and there are multiple tenants, HiiP will allocate the repayment amount in equal proportions to each tenant. Note: this can be manually over-ridden if one tenant is making a greater share of repayments

• Repayment amount – in creating the agreement (or updating an agreement), HiiP will calculate the minimum and maximum repayment limits. The actual repayment amount must be entered by the Housing Services Officer of the basis of the actual agreement

• Frequency – the frequency of repayments is defaulted by HiiP to the rent payment frequency. Prior to creating the agreement in HiiP, the Housing Services Officer should confirm with the tenant, this frequency and check it is correctly recorded in HiiP

• Lump sum amounts – these are manually entered and HiiP will monitor that these payments are made.

1.2.14 Revising agreement repayment levelsWhen a household’s income changes and the change results in the current agreement repayment amount falling outside the 3per cent minimum and 5per cent maximum limits, either the tenant or the department may initiate a renegotiation of the weekly payment amount.

1.2.15 Monitoring Local Agreements

Procedure

Automated monitoringAgreements are automatically monitored by HiiP based on the payment frequency of the client (weekly, fortnightly or monthly). If payments are not up to date, the agreement and account status will change to “Broken Agreement”.

If a rebate credit backdate is applied to an account that has an agreement, it will automatically reset the agreement balance. The system does not count the credit backdate as a payment.

EXAMPLE:

If the tenant is repaying a debt of $100 at $10 per week and at the end of the fourth week their balance is $60 and in that week a $20 credit backdate is applied to the account, the system will reset the agreement balance to $40 and reset the ‘start’ date.

1.2.16 Broken AgreementsAn agreement is deemed broken when the tenant does not maintain the agreed repayment plan. This can occur when a tenant makes an underpayment or a rebate debit backdate is applied to the account.

EXAMPLE:

The tenant’s debt at the time of entering the agreement was $200, and they had agreed to repay this debt at $20 per week. After five weeks the tenant had repaid $100 (i.e. the agreement was being


maintained), but they then missed the additional $20 in the following week, resulting in the account falling behind by $20 in the sixth week.

Broken Local AgreementWhere a Local Agreement has broken, the account status changes in HiiP to ‘Broken Agreement’ status. A Broken Agreement Letter is automatically sent via the mail contractor to the tenant requesting they make up the missed payments or make contact with their local Housing Office.

The tenant can enter into a Make-Up Missed Payment Agreement (Interim Agreement) and then make up the shortfall in debt repayment by making one, or a maximum of, two payments via Australia Post coinciding with their normal rent payment frequency i.e. weekly, fortnightly or monthly. (The HiiP system will then reinstate the agreement.)

ProcedureIf the tenant does not make up the missed payments, and has not made contact with a HSO, the local Housing Office will attempt to contact them by telephone or home visit.

The reasons why the agreement has broken and why payments were missed are discussed. Print a rental statement from HiiP and provide this to the tenant, noting where the agreement has broken.

If issues of support or referral are identified, discuss involvement of a current support worker or advocate, or refer the tenant to an appropriate support agency.

The following is discussed with the tenant:

• The tenant can enter into a Make-Up Missed Payment Agreement (Interim Agreement) (refer above)• If the missed payments are not made up, the department may serve a Notice to Vacate. However, the

tenant is not required to vacate immediately, and, if they resume their rental and agreement payments and appear at the hearing, the department will request a Legal Agreement

• Rent payment methods• Current household information.If the tenant does not make up the missed payments within two weeks of the Broken Agreement Letter being sent, the department may serve a Notice to Vacate.

Where a Notice to Vacate cannot be initiated due to the low level of arrears (e.g. the debt is not equivalent to 14 days rent), then a subsequent Local Agreement can be negotiated.

1.2.17 Issuing a Notice to VacateThe department complies with the requirements of the RTA when pursuing legal action to recover outstanding rental arrears. The department may serve a Notice to Vacate where the debt is equivalent to 14 days rent or more, RTA (s.246), and:

• the tenant has not responded to an Initial Arrears Letter• the tenant and the department are in disagreement regarding the level of debt• the tenant and the department cannot agree on a repayment plan• the tenant has broken their Local Agreement and has not made up the missed payments• a previous Order for Possession has expired and the tenant does not honour the Local Agreement

which is put into place regarding arrears still outstanding.

Consistent with the Aims of this policy (outlined above), the department’s intention of serving a Notice to Vacate at this stage is to require the tenant to pay their arrears, and not to ‘vacate’ the premises. Upon receipt of the Notice to Vacate, the tenant is informed that they are not required to vacate the premises


but rather they are required to pay their arrears to avoid their tenancy being placed at risk (as a failure to pay their arrears can eventually lead to their eviction).

A notice is issued to escalate the action as quickly as possible so that the tenant understands the seriousness of the issue and has an incentive to pay their arrears before they become unmanageable, ensuring any further increase in the debt is minimised.

Situations may arise where it may be appropriate to delay initiating legal action, for example:

• the tenant is experiencing a serious health or medical condition (including substance abuse and mental illness)

• the recent death of an immediate member of the tenant’s family• the household is experiencing family violence• other circumstances where it is reasonable to do so as advised by the Housing Services Manager

(HSM).In these situations, the tenancy is discussed with a TM or HSM, and approval may be sought to delay issuing a NTV provided rental payments are made by the tenant during this period.

ProcedureGenerate the notice in HiiP via VCAT online. Print and include a rental statement. Send these documents to the tenant by registered mail within one working day of printing, enclosed with the cover letter which explains the notice.

1.2.18 Application for VCAT hearing

ProcedureThree working days after the Notice to Vacate is issued, and only if the arrears still remain unpaid, access HiiP to send an application to VCAT for a hearing. A Hearing reference number will be provided by VCAT. RTA (s.322) Enter the details of the hearing in HiiP when provided (i.e. date, time and location).

VCAT allocates a hearing date and will notify the tenant and the Housing Office of the details of the hearing.

If the tenant contacts the department after receiving the Notice to Vacate or the Hearing Notice, the following is discussed:

• the tenant’s reasons for not paying the rent and, if applicable, the agreement payments• the reasons why the application was made• what will happen at the hearing• the options available to the department at VCAT• the importance of the tenant attending the hearing• the difference between a Legal Agreement and an Order for Possession. If an Order for Possession is

obtained, the department is then able to apply for a Warrant of Possession to evict if a suitable arrears repayment plan cannot be agreed to and maintained by the tenant

• the importance of the tenant resuming rent payments at the correct amount and the option of commencing payments via the RDS

• any issues for which the tenant may require a referral for support

1.2.19 VCAT hearingsThere are a number of potential actions and outcomes when the department makes an application to VCAT in relation to rental arrears. RTA. The most likely outcomes include:


• Withdrawal, Adjournment or Dismissal – Refer to 1.2.21 page 18• Legal Agreement – Refer to 1.2.22 page 18• Order for Possession – Refer to 1.2.24 page 21

1.2.20 Prepare for the VCAT hearing

ProcedureThe day before attending the hearing, review the tenancy’s rental account to check for payments. If recent contact has not occurred with the tenant, contact them by telephone to discuss their account and remind them of the hearing.

On the day of the hearing, prepare a Summary of Proofs to provide to the Chairperson at VCAT if requested. Print three copies of the rental account statement to provide to the tenant and the Chairperson, retaining the third copy for your own reference.

Print a record of the tenancy account actions to refer to during the hearing. The tenancy file should also be taken to the hearing to refer to rental rebate or other tenancy details if required.

If the tenant attends VCAT, and earlier contact was not made, prior to the hearing discuss how the arrears occurred and why the agreement has broken. Where the tenant has no support services engaged, discuss support options with them (support worker). Explain what the Department will seek based on the options explained below.

1.2.21 Withdrawing and adjourning, hearings

Withdrawing HearingsThe department will request that a hearing be withdrawn where the rental arrears and rent in advance are paid in full prior to the hearing.

Adjourning HearingsThe department will seek to adjourn the hearing where:

• the arrears have been paid in full but the tenant has a history of rental arrears, particularly where previous Orders for Possession have been granted RTA (s.331(1)(b))

• a rebate assessment, or an appeal about a rebate assessment, is pending• the tenant has notified the Housing Office in advance of their inability to attend the hearing due to

– a serious health or medical condition (including substance abuse and mental illness) which prevents their attendance

– the recent death of an immediate member of the tenant’s family– the household is experiencing family violence.

A TM or HSM must endorse an adjournment in these circumstances. There may be other circumstances known to the department for the tenant’s absence which makes it reasonable for the department to consent to an adjournment.

1.2.22 Legal AgreementsThe department will request a Legal Agreement where the tenant appears at the hearing and has recommenced rental payments.

Whilst the department will request that the weekly repayment amount falls within the Local Agreement minimum and maximum agreement levels, the Chairperson has the discretion to determine a Legal


Agreement amount that is different from the amount requested. The Chairperson will take into account the financial circumstances of the tenant.

Where the tenant is eligible to pay their rental via the RDS, the department will request the Chairperson to include this in the Order. However VCAT cannot compel the tenant to participate in RDS.

Revising weekly repayment levelsWhere a tenant’s financial circumstances have changed (e.g. the household income has decreased) it may be necessary to renew proceedings at VCAT to renegotiate the terms of the agreement. This can be initiated by the department or the tenant.

ProcedureWhere the tenant approaches the department to request a decrease in the repayment level, and this is supported by the department (e.g. the current repayment level is above 5per cent of total assessable household income) the department will initiate the renewal of proceedings.

Where the tenant’s income has increased and they would like to make higher payments, this does not require a further hearing. The tenant can make the additional payments either at the Post Office or via the RDS (where the extra payments will be loaded as ‘additional payments’). The terms of the Legal Agreement will not be altered, and the tenant can cancel the additional payments at any time.

ProcedureEnsure the tenant signs an RDS form to vary the deduction amount. Scan the form into HiiP. Where additional payments are to be made via the post office, file note the details against the tenant’s Service ID in HiiP (i.e. start date and additional amount).

Broken Legal AgreementsThe department considers a Legal Agreement ‘breaks’ where the tenant:

• underpays or misses payments• a rental rebate assessment has increased the amount of debt and the additional debt remains unpaid

after two weeks of being applied to the account.If the tenant makes up the missed payments within a reasonable time (e.g. a fortnight) and continues to pay the rent in the meantime, the Legal Agreement is re-instated without further action by the department.

However, the department will renew proceedings at VCAT if the account is not brought up to date.

ProcedureOnce a Legal Agreement is broken, HiiP will automatically move the account to ‘Renew Proceeding (Underpayment)’ status, and a letter is sent automatically via the mail contractor. If the tenant does not respond to the letter within seven days of it being sent, the department will attempt to contact the tenant by telephone or home visit.

When contact is made

A discussion is held to ascertain why the payments were missed. Current support workers or advocates can be included in the discussion or where applicable, referrals made to a support agency.

The options available to the tenant are:


• Make up the missed payment immediately to avoid the department renewing proceedings at VCAT to seek an Order for Possession

• Where the department is satisfied that a further Legal Agreement is appropriate in the circumstances, the department will renew proceedings to obtain a Legal Agreement. In these situations, approval is sought from the HSM/HM for a further Legal Agreement to be requested at VCAT. This may apply where the missed payments were directly related to:– the tenant experiencing a serious health or medical condition (including substance abuse and

mental illness)– the recent death of an immediate member of the tenant’s family– the household experiencing family violence– other circumstances which make it reasonable for the d to seek a further Legal Agreement.

If the tenant cannot make up the missed payment, and the department is not satisfied that a further Legal Agreement is appropriate, the department may seek an Order for Possession. This could also occur if the tenant does not appear at the hearing. However, if the tenant attends the hearing, the Chairperson may decide to set another Legal Agreement rather than grant the Order for Possession (based on the information provided by the tenant).

The tenant is advised that if an Order for Possession is obtained, the department can then apply for a Warrant of Possession which may result in their eviction. However, they will have the opportunity to negotiate another payment plan. If this payment plan is not maintained, the tenant may be evicted.

If contact is not made

If contact could not be made with the tenant within two weeks of the agreement breaking, legal proceedings are renewed at VCAT.

1.2.23 Renewal of proceedingsProceedings are renewed at VCAT where a Legal Agreement has broken (and the tenant has not made up the missed payments) and attempts at contact have been unsuccessful. A copy of the renewal application is sent to the tenant by both normal and registered mail.

If the tenant makes contact prior to the hearing, explain the matters referred to in the procedure immediately above.

If issues of support or referral are identified, involvement of a current support worker or advocate.

Withdrawing or adjourning renewal hearingsThe department will withdraw its Renewal of Proceedings application where:

• the tenant has made contact with the department prior to the hearing and the Legal Agreement is brought up to date (i.e. the missed payments have been made).

The department will adjourn its Renewal of Proceedings application where:

• a rebate assessment, or an appeal about a rebate assessment, is pending, or• the tenant has notified the Housing Office in advance of their inability to attend the hearing due to:

– a serious health or medical condition (including substance abuse and mental illness) which prevents their attendance

– the recent death of an immediate member of the tenant’s family– the household is experiencing family violence– other circumstances known to the department which make it reasonable for the department to

adjourn the proceedings.


Where the tenant has paid the rental arrears and rent in advance in full, the Legal Agreement is completed. If the tenant subsequently accrues further rent arrears, the arrears recovery process must be commenced from the beginning.

1.2.24 Order for PossessionAn Order for Possession is valid for six months, and within this period the department may decide to obtain a Warrant of Possession to evict the tenant and the entire household.

The department may seek an Order for Possession where:

• rental arrears are escalating as the tenant has not responded to attempts to contact them or to negotiate a repayment agreement

• attempts to engage with the tenant to negotiate repayment or an agreement have not succeeded (for example through authorised support persons/services)

• the tenant does not attend a scheduled VCAT hearing without providing sufficient prior notification of a satisfactory reason, such as serious health or medical condition, or the recent death of an immediate member of the tenant’s family, or family violence

• the tenant has not brought a ‘broken’ Legal Agreement up to date (e.g. made up the missed payments)

• the department is satisfied that there are no circumstances (see above under ‘Withdrawing or Adjourning Renewal Hearings’) which justify making a further Legal Agreement.

In deciding what order to request at the hearing, consideration is given to the household’s personal circumstances and the impact that seeking an Order for Possession may have on that household. This is balanced against the aims of the Rental Arrears Policy, refer to page 7 1.2.

It is important to take into account that at this stage obtaining an Order for Possession does not automatically result in an eviction, as further repayment options are made available for the tenant to avoid eviction. The department’s intention in seeking possession at this stage is to encourage the tenant to pay their arrears and avoid eviction so that the department may meet its policy aims by ensuring rent is collected and that the arrears remain manageable for the tenant.

ProcedureWhere an Order for Possession has been granted at VCAT and the tenant was not present at the hearing, a telephone call is made as soon as possible after the hearing to arrange an interview to discuss the Order for Possession and the options they have to avoid eviction. If telephone contact cannot be made, an Order for Possession Letter is sent with an appointment time.

If the tenant attends the hearing, a pre-arranged letter is given to them to organise an appointment time. The tenant should be encouraged to bring their support provider to attend the interview with them.

If the tenant does not make contact, a HSO will attempt to make contact via a home visit or a support provider authorised by a form of authority.

If the tenant does not make contact or fails to attend the interview to discuss the Order for Possession, conduct a home visit within 48 hours. If the tenant is not at home, notification is left advising that the department will shortly be making a decision about applying for a Warrant of Possession. A list of local support agencies is left with the notification.

An Order for Possession Notification is also manually sent to the Regional Client Services Manager.

Future Tenancy PlanThe Future Tenancy Plan (FTP) records the planned strategy to manage a particular tenancy once an Order for Possession is granted by VCAT. The strategy is discussed in detail with the tenant and their


support worker (if one is authorised by the tenant). The aim is to ensure that the tenant is aware of the plan that is in place to support them to repay the rent arrears and sustain their tenancy. The FTP may also include the Warrant Application briefing process which summarises the tenancy circumstances and history for the HSM/HM, and provides a recommendation regarding obtaining a Warrant of Possession and possible eviction. One account can have multiple FTP’s at various stages following the granting of an Order for Possession.

EXAMPLE:

A FTP is created in HiiP when an Order for Possession is granted detailing the terms of the Order for Possession Agreement, any support services working with the tenant, discussions with the tenant regarding the strategy to reduce the rent arrears and manage issues affecting their tenancy etc.

A new FTP is created in HiiP if the tenant breaks their Order for Possession Agreement. In the FTP, the Housing Services Officer asks the HSM/HM to decide what action to take in light of the tenant breaching their agreement, i.e. whether a Warrant of Possession should be obtained. The FTP should be supported by information and evidence (e.g. from the tenant’s file/account, interview, support letters etc.);

The FTP is used to:

• document the planned strategy agreed between the tenant and the department to manage the tenancy’s repayment of the rent arrears

• record file notes of conversations between Housing staff, the client, support services or workers and senior management about the plan

• seek approval for the tenant to commence a Local Agreement or renegotiate the Order for Possession Agreement where the Order for Possession Agreement has broken because the repayments are too high (e.g. due to reduction in income)

• seek approval for the tenant to commence a Local or Legal Agreement once the Order for Possession has expired where the tenant is maintaining their Order for Possession Agreement, however has a history of breaking agreements

• ask the HSM/HM to decide whether to obtain a Warrant when the Rental Arrears Policy and Procedures have been applied, however the tenant’s arrears have not reduced.

The FTP template is available in HiiP. The HSO submits the FTP to the TM for review. If satisfied, this is escalated to the HSM/HM for endorsement. The FTP is then submitted to the HSM/HM or a relevant Executive Officer to decide on the plan (which might include a decision about whether to obtain a Warrant).

Order for Possession interviewThe TM and/or HSM will attend the interview with the tenant. If the tenant has a support provider with whom a form of authority is in place, they are contacted and asked to attend as well.

At the interview the tenant is asked about the circumstances that led to the non-payment/underpayment of rent. This will assist the department to assess the appropriateness of referral to a support agency.

Through discussion with the tenant, the department determines whether they are able to repay the outstanding debt in full. This will depend on the level of the debt, the circumstances of the household and whether requesting full payment is likely to put strain on the household’s ability to meet other essential bills and expenses.

In order to meet the aims of this policy and as a less restrictive option to immediate full repayment or eviction, tenants are provided with an opportunity to sign an Order for Possession Agreement to repay the outstanding rental arrears in full prior to the Order for Possession expiry date.

In circumstances where the tenant advises they will be unable to repay the debt in full prior to the Order for Possession expiry date, the agreement is still offered to the tenant, however the T M/HSM will have


the discretion to allow a tenancy to continue beyond the expiry date despite the outstanding debt. This decision will occur approximately one month before the expiry date of the Order for Possession at which time the tenant is contacted and the circumstances of the tenancy are considered. Refer to section ‘Agreements with debts outstanding at the Order for Possession expiry date’ below.

ProcedureThe Order for Possession interview is held with either the TM or the HSM. The tenant’s support provider is asked to attend.

At the interview the following is explained and discussed:

• An Order for Possession has been granted to the department for the property in which they live. This gives the Director of Housing the legal right to take possession of the property back from the tenant via an eviction process unless an agreement can be reached with the department and the tenant regarding the outstanding arrears.

• Why the order was requested.• The order is valid for six months from the date of the hearing.• The tenant will have one more opportunity to repay the debt.• Issues that may have contributed to the arrears, as well as options and strategies for repayment of

the debt.• Appropriate referrals and information or meetings with support providers where necessary will be

made to assist the tenant to stabilise rent payments.• Information regarding participation in the department’s Rent Deduction Service.• Within the duration of the Order for Possession, the department can obtain a Warrant of Possession

from VCAT if the tenant does not:– Maintain regular rental and agreement payments– Pay the rental arrears in full by the expiry date of the Order for Possession.

• If a Warrant of Possession is obtained, it could result in their eviction from the rented premises.

1.2.25 Order for Possession AgreementsAn Order for Possession Agreement is negotiated with the TM or the HSM at the Order for Possession interview.

Determining weekly repayments and lump sum arrangementsAn Order for Possession Agreement may have two repayment components. The first is regular weekly or fortnightly arrears repayments. A repayment plan is calculated based on the maximum agreement amount, and, if required and/or appropriate, a lump sum payment.

All household members’ income is confirmed, and a rebate entitlement processed if required.

The agreement amount is calculated as the difference between the current rent payable and 30per cent of the assessable household income per week. The tenant is advised that they are required to maintain regular rent and agreement repayments for the Order for Possession period. Any arrears owing at the expiry of the Order for Possession must be paid in full.

Lump sum payments or instalment paymentsThe second component is a lump sum payment where the debt cannot be repaid in full via the regular weekly or fortnightly repayments (prior to the Order for Possession expiry date).


Any lump sum payment must be paid no later than the end of the fifth month of the Order for Possession period. However, the tenant may pay smaller monthly instalments to repay any lump sum amount as agreed with the department. Up to five instalment payments can be negotiated.

To determine the total lump sum payment or instalment payments, the agreement repayment amount is multiplied by the number of weeks remaining for the Order for Possession to expire. The result is then subtracted from the total rental arrears (including rent in advance).

EXAMPLE:

The tenant’s rental arrears are currently $750. The Order for Possession was obtained last week so has 25 weeks left before the expiry date.

The weekly agreement repayment amount based on the tenant’s income is $15.25.

Over the remaining 25 weeks the tenant will repay $381.25 ($15.25 x 25). Therefore, the lump sum payment required by the end of the fifth month of the Order for Possession will be $368.75 ($750 – $381.25). This can be paid as one single lump sum payment or as smaller monthly instalments as negotiated.

Negotiating terms of repaymentIn entering an agreement the tenant and the department should tailor the agreement to repay the debt within the agreed timeframe, using either one or a combination of repayment methods.

In order to sustain tenancies, local management may apply discretion where payment of the debt in full is likely to place the tenant under further financial strain (e.g. force the tenant into debt with other agencies such as short term loan agencies). If this is the case, it is more appropriate to negotiate an agreement for regular repayment amounts and smaller, more manageable, lump sum / instalment arrangements.

However, where the tenant has recently missed payments (e.g. no payments have been made for the past six weeks), the department will generally seek a lump sum, or in some circumstances, two instalments to make up these payments.

Lower lump sum arrangements will be negotiated where:

• the tenant has been making regular repayments and the debt has been relatively stable or increasing by small levels only

• setting lump sum requirements too high may result in the tenant missing further payments as soon as they experience other financial pressures, causing the account to go further into arrears.

The TM/HSM will discuss all forms of financial support that may be available to the tenant. This may include access to low cost loans (e.g. through Centrelink), financial assistance from tenant support agencies, or the tenant’s own access to other funds (e.g. paying out long service leave entitlements or superannuation).

In all circumstances the department offers referral to support to ensure the tenant receives independent advice.

ProcedureFor an Order for Possession Agreement, HiiP will identify the number of months that remain for the agreement and distribute the remaining debt (i.e. once the regular weekly or fortnightly repayments have been taken into account) evenly into lump sum payments, in order to clear the debt before the Order for Possession expiry date.

The tenant is advised in writing by HiiP when the lump sum payments are due, and an alert also goes to the HSO.


If a maintenance agreement exists, it is suspended automatically by HiiP until the Order for Possession Agreement has been completed.

Agreements with debts outstanding at the Order for Possession expiry dateWhere a repayment agreement is negotiated that will not fully repay the debt by the Order for Possession expiry date, the TM and tenant discuss the strategy that may be adopted when the Order for Possession expires. This enables the tenancy to continue after the Order for Possession expires and ensures the tenant is fully aware of the plan to be implemented at the expiry date.

ProcedureWhere the tenant has complied with the Order for Possession Agreement and the FTP, the terms of the Order for Possession Agreement will be converted to a Local Agreement at the expiry date. Explain the terms of the Local Agreement to the tenant and that further legal action may be taken if the agreement is broken.

Where the tenant has broken the Order for Possession Agreement, refer to page 26 1.2.27 for further information.

The future course of action is discussed with the tenant and forms part of the terms of the agreement.

1.2.26 Monitoring Order for Possession AgreementsIf the tenant’s financial circumstances have changed (e.g. the household income has decreased) the HSO will make an appointment to reassess the rent and where appropriate renegotiate the terms of the agreement.

Where contact is made in person the HSO may ask the tenant if they think they will have any difficulties meeting the repayment arrangements. Where issues are identified it may be appropriate for the HSO to refer the tenant to a support agency, or to make contact with support providers that are already in place.

Rebate debit backdatesWhere a rebate is reassessed during the period of the Order for Possession resulting in further arrears, the tenant is contacted immediately and asked to pay the backdated amount in full. If the tenant is not able to do this, a further Order for Possession Agreement is negotiated taking into account the new debit balance and where applicable the revised lump sum or instalment payment(s).

Rebate credit backdatesWhere a rebate is reassessed during the period of the Order for Possession resulting in a credit to the tenant’s account, HiiP automatically adjusts the account balance and agreement balances and adjusts the agreement end date. This information is provided to the tenant via a household income change letter.

Where the repayment amount will now be either more than 5per cent of the new household income, or less than 3per cent of that income, the tenant is advised via a letter generated by HiiP to contact the department to renegotiate the agreement.

It is recommended that the HSO directly contacts the tenant to explain the effect of the rebate assessment on the debt balance and any adjustments to the Legal Agreement as a result, including confirming the next payment date, payment amounts and lump sums due.


1.2.27 Broken Order for Possession AgreementsWhen an Order for Possession Agreement is broken, the HSO will make immediate contact with the tenant, initially by telephone and if that is unsuccessful, by home visit. The HSO will also attempt to make contact with the tenant’s support provider.

When payments have been missed the first priority is for the tenant to resume regular weekly payments. Continuation of rent payments halts further debt escalation and allows the tenant, their support agency and the department to renegotiate the agreement requirements.

If the tenant makes up the missed payment within the next two scheduled rent payments, the Order for Possession Agreement is reinstated.

If the tenant cannot make up the missed payment and the missed payment was due to:

• a serious health or medical condition (including substance abuse and mental illness)• the recent death of an immediate member of the tenant’s family• family violence• other extenuating circumstances.

The HSO discusses with the TM whether it is possible to renegotiate the terms of the agreement. The TM / HSM will then be asked to decide what action to take, whether to renegotiate the agreement and a new FTP be created or whether to apply for a Warrant of Possession (see steps below under heading ‘Deciding whether or not to obtain a Warrant of Possession’).

If the tenant does not engage with the local Housing Office and the arrears continue to increase, the department sends the tenant a letter by both normal and registered mail advising that the department will shortly consider whether to apply for a Warrant of Possession and requesting the tenant to make urgent contact with the department. (see section ‘Warrant of Possession’ below).

This letter is followed by a home visit if the tenant and/or their support provider do not make contact within seven days.

If the tenant does not have support in place, the local Housing Office may elect to make a referral to a local support agency asking the agency to contact the tenant.

InterviewWhere the tenant is contacted, arrange an interview to discuss the Warrant and eviction process. Give the tenant an opportunity to respond and to provide any information relevant to the department’s decision whether an eviction should proceed. Any new information, particularly about how eviction may impact the household will need to be noted and considered.

1.2.28 Deciding whether or not to obtain a Warrant of PossessionA landlord is able to obtain a Warrant of Possession during the six month Order for Possession period as per the RTA (s.351).

Whilst it is always the preference of the department to sustain tenancies, this is balanced with the tenant’s obligation to pay rent and the other aims outlined at the start of this chapter.

Therefore, the decision to obtain a Warrant of Possession (which may lead to an eviction) involves balancing the potential negative impact that eviction may have on the tenant and their household with the aims of the department’s Rental Arrears Policy.

The aims of this Rental Arrears Policy is to:

(a) assist tenants to sustain their tenancy by:

• preventing and reducing rental arrears


• ensuring debts are fully paid;(b) ensure that rent revenue is collected and available for the provision of housing assistance programs

(c) recover possession of the property and terminate the tenancy where rent arrears are not reduced by the tenant or continue to rise following the application of these policies and procedures.

Assessing the extent of any negative impact on the tenant and their householdIn order to assess the extent of any negative impact on the tenant and their family which obtaining a Warrant of Possession and evicting the household may cause, the following factors should be considered.

Whether approval to obtain a Warrant and evict the household:

• would cause severe hardship to the tenant or a member of their household• may negatively impact on the person and their family’s continuous and sufficient links with the

community (and their home)• may negatively impact on the family unit• may negatively impact on any children in the household• may negatively impact on the person and their family’s ability to practice their culture, religion or

language• may negatively impact on the person and their family’s health (including mental health).A decision to purchase a Warrant of Possession will usually have a negative impact on one or more of the factors listed above where the Director takes steps to recover possession of the property. Therefore, consideration must be given to the extent of the impact in order to balance any such impact against the Director’s policy aims.

The decision to obtain a Warrant and evict should be assessed in light of the policy aimBefore a decision is made, careful consideration is given to the reasons why the department may wish to evict the tenant. This is done by considering the following ‘policy factors’ which relate to the department’s policy aim under the Rental Arrears Policy:

• the level of debt outstanding to the department• the reasons for the outstanding arrears; whether the non-payment is because the tenant is

experiencing financial or personal difficulty in paying the arrears or there is a lack of regard for paying the rent

• whether the tenant has broken their Order for Possession Agreement, does not make up the missed payments (without good reason), and whether the tenant is not eligible for a renegotiated agreement

• whether the tenant is engaging with the department to negotiate repayment of their debt (after staff have made reasonable attempts to engage with the tenant, refer them to support after identification of issues the tenant is experiencing)

• whether the tenant has demonstrated a willingness and commitment to minimise their arrears, including engaging with service providers to minimise their debt

• the tenant’s rental payment history, including whether the tenant has demonstrated genuine efforts to repay rental arrears for the current or a previous episode, and whether the tenant has fulfilled previous Order for Possession Agreements

• whether the rental arrears policy has been correctly followed by staff• the matters set out in the Future Tenancy plan.


The above policy factors will enable you to consider whether there are important reasons for proceeding with an eviction of the tenant, in line with the department’s aims under this chapter. If one or more of these policy factors are relevant in the case before you, this does not necessarily mean that the decision should be taken to evict the tenant. However, these factors should be noted and taken into account when the HSM/HM comes to justify his / her decision: by balancing any negative impact on the tenant and their household with the department’s policy aim (see below).

Justifying the decision: balancing any negative impact on the applicant and their household with the department’s policy aimTo reach a decision, the HSM/HM will need to determine whether it is important and necessary to evict (and bring about the potential negative impact to the tenant and their family) in order to achieve the policy aims outlined above.

It is useful to think about whether achieving the policy aim outweighs the potential negative impact on the tenant and their family (which eviction could bring about).

This is done by considering the broader aims of the rental arrears policy and after considering the policy factors listed above. The decision must be made on a case by case basis, as all cases will be different.

EXAMPLE:

For example, in one case the arrears might be very high, the tenant may not have engaged despite reasonable efforts by staff, and the tenant may have demonstrated an unwillingness to pay the arrears. In such a case it may be necessary for the department to seek to evict the tenant (which may impact on the household negatively) to achieve its policy aim of ensuring arrears are recovered.

In another case, the arrears may be low, the tenant may be engaging with the department, may be demonstrating a willingness to pay the arrears, but is experiencing extreme personal and financial difficulty to pay the full amount of the arrears. In such a case it may not be necessary for the department to proceed with an eviction to achieve the policy aim of ensuring arrears are recovered. This is because the department is still able to obtain some payment from the tenant and there is a willingness and commitment to continue to pay off the outstanding arrears. Not evicting in this case would reasonably allow the department to achieve its policy aim of recovering the arrears and sustaining tenancies.

Approval and non-approvalIn cases where it is not important or necessary to bring about the potential negative impact on the tenant and their family to achieve the policy aim, the HSM/HM should not evict the tenant from the premises.

In cases where the potential negative impact on the tenant and their family (brought about by an eviction) is important and necessary for the department to achieve the policy aim(s), the HSM/HM may decide to obtain a Warrant and proceed with an eviction, subject to the following.

Considering alternative optionsBefore the HSM/HM decides that the department should apply to purchase a Warrant of Possession and proceed with an eviction, the HSM/HM should think carefully about whether there are alternatives which are reasonably available to the department which allow the department to meet its policy aims, but which cause less of a negative impact on the tenant and their family (than eviction could). If such options are reasonably available, the HSM/HM should choose the option which causes the least amount of negative impact on the tenant and their family. If there are no alternatives which still meet the Rental Arrears Policy aims, then the HSM/HM may decide to purchase a Warrant and proceed with an eviction.

Examples of alternatives in appropriate cases may include negotiation of a further Order for Possession Agreement, requiring the tenant to make payments by RDS and / or allowing the Order for Possession to


lapse and entering into a Local Agreement with the tenant if there are outstanding arrears. Whether one of these options is reasonably available will depend on the ‘policy factors’ which are relevant above. For example, renegotiating an Order for Possession Agreement requiring a tenant to pay a higher amount may not be available in cases where a tenant is unable to pay the higher amounts due to demonstrated financial and personal hardship. In such a case, it may be more appropriate to allow the Order for Possession to lapse and enter into a Local Agreement with the tenant – this could be reasonably available to the department in circumstances where the tenant has demonstrated a willingness and commitment to repay the arrears.

When the HSM/HM makes a decision about applying for a Warrant, they are required to document the terms under which the eviction will or will not proceed. For example, if the arrears are relatively low (e.g. eight weeks of missed rent and the Order for Possession still has four months until expiry, the terms may be that if the tenant pays the missed payments (that led to the Warrant Application) immediately and maintains an Order for Possession Agreement, the Warrant will not proceed.

It will be necessary to continue to monitor the tenant’s circumstances after the Warrant is purchased. Negotiation for repayment of the rental arrears continues where possible up to the date of eviction. If the tenant’s circumstances change it will be necessary for the HSM/HM to reconsider their decision to proceed with an eviction. For example, where a full or substantial payment of the rent arrears is made, or where the family experiences a critical event and in this context an eviction would cause undue hardship.

Procedure

Preparation of a Future Tenancy Plan and interviewing the tenantThe HSO prepares a FTP (Warrant Application) requiring the HSM/HM to make a decision on whether or not to apply for a Warrant of Possession to evict the tenant.

In order to obtain the information referred to in the policy above, staff will need to interview the tenant to give them with an opportunity to provide information about their arrears and the potential negative impact which eviction might bring about.

The HSO should set out in the FTP how evicting the tenant and the household could negatively affect them (in line with the matters referred to above). If the tenant does not engage with staff after reasonable attempts, staff should base the recommendation on the information known to the department to date.

The FTP should also set out a description of each of the ‘policy factors’ which are relevant in the case, including how they are relevant.

In the recommendation section of the FTP, the HSO should request the HSM/HM to make a decision on whether or not to purchase a Warrant of Possession and evict the tenant.

The FTP is completed and saved in HiiP, which then escalates to the TM for endorsement before being escalated to the HSM/HM for a decision to be made.

Escalations in HiiP must be actioned via the To Do list for the workflow process to occur (i.e. Actioning through the Service ID will break the workflow and further escalations will cease).

1.2.29 Purchase and issue Warrant of Possession

Procedure

Purchasing the Warrant

If the HSM/HM decides that a Warrant of Possession should be purchased and an eviction is to proceed, the Regional Project Officer will organise for the purchase of the Warrant from VCAT. The Regional Project Officer will advise VCAT where to send the Warrant. Individual Housing Office agreements with


their local Police Station will determine if it can be sent directly to the local Police Station or to the local Housing Office for action.

Warrant Issued to Police Station

Once the Warrant of Possession is issued to the local Police Station, VCAT will forward a letter to the relevant Housing Office advising them of the details contained in the Warrant. The relevant HSO will then liaise with a local Police Officer to organise a date and time for the eviction to take place.

Warrant Issued to the Housing Office

Where a Warrant has been issued to the Housing Office and the eviction is to proceed, the Warrant is to be delivered in person to the local Police Station where a date and time of eviction is organised. The Police are also provided with details of the tenant, support agencies that may be able to assist them as well as the name of the relevant HSO. The Police are also asked to provide this information to the tenant when they make contact when they are advising them of the eviction.

The details and actions of the management of the Warrant process need to be recorded in HiiP.

The local Housing Office must contact the tenant and advise of alternative housing options or other relevant supports. If they do not have housing arranged, consent is sought from the tenant and if provided, contact is made with local providers to assess their options. The actions are recorded in HiiP.

A maintenance contractor is contacted to attend the eviction to change the locks.

The tenant is then advised of the date and time of the eviction via one of the following methods:

• A telephone call• A letter sent by registered mail• A Police Officer• A home visit.All discussions with all relevant stakeholders including tenants must be file noted on HiiP.

48 hours prior to the eviction, a 48 Hour Eviction Briefing Note is sent to the:

• Minister’s Office – Fax 9096 8779• Director, Client Services and Programs – Fax 9096 9232• Media Unit – Fax 9096 8990• Regional Housing and Complex Care Manager• Nominated regional staff

1.2.30 Extend the Warrant of PossessionOnce a Warrant of Possession is obtained, the landlord generally has a maximum of 30 days to execute the Warrant. An extension may be requested of no more than 30 days after the day on which the time for execution of the Warrant would otherwise expire.

The HSM/HM has discretion to approve an application to VCAT to extend the Warrant of Possession where it is unreasonable to proceed in the circumstances, for example, where the eviction may cause undue hardship for the tenant if it were not postponed, or a member of the household is in hospital. This involves considering the same factors as the original decision to evict, as well as information or circumstances which have prompted the extension option, and balancing these against the Rent Arrears Policy objectives. RTA (s.351).

Whether a Warrant will be extended is at the discretion of the VCAT member. It is important to note that once the Warrant has expired, the VCAT has no authority to extend the time for the Warrant’s execution. It is therefore important that staff ensure that VCAT determines an extension application and makes an order before the Warrant expires.


ProcedureWhere the HSM/HM has approved an application to extend the Warrant, application is made in writing to VCAT requesting the extension, and including:

• the case number• the expiry date of the Warrant of Possession• the reasons for requesting the extension.If a hearing is scheduled by VCAT, attendance is required by the relevant HSO to request the extension.

Final Attempts to engage the tenantOnce the department obtains a Warrant of Possession, a HSO will attempt to contact the tenant again to advise that the Warrant has been issued. If telephone contact cannot be made, the HSO will conduct a home visit. If the tenant is not home, a letter will be left at the property explaining that the Warrant has been obtained and that the tenant needs to urgently contact their local Housing Office.

The HSO will arrange a date and time for eviction with the local Police, who may visit the tenant prior to the eviction date to advise them when it will be.

Where the department is able to engage with the tenant, they will discuss the tenant’s alternative housing options. If the tenant does not have family or friends that are able to support them, the department will suggest making contact with a local support agency to seek their assistance to support the tenant.

1.2.31 Execute Warrant of Possession

ProcedureRelevant Housing staff meet the Police at the property at the scheduled eviction time. Housing staff do not enter the property without the Police being in attendance as the Police are responsible for executing the Warrant of Possession.

After a Warrant of Possession has been executed, the maintenance contractor is authorised by Housing staff to change the locks to all external doors of the property. The property is left completely secure, including locking of windows, sheds and garages. RTA (s.357).

If the tenant has left possessions in the property they are advised to contact the local Housing Office within three days to arrange for access to the property to remove their goods.

If the tenant fails to collect their goods within the specified time, the abandoned goods policy and procedures applies, see the Abandoned Properties and Goods Chapter in this manual.

1.2.32 Warrant Application Outcome Notices

ProcedureA Warrant Outcome Details advice is completed and copies forwarded to nominated regional staff. A copy is placed on the tenancy file together with a copy of the executed Warrant.

The Minister’s Office, Director - Housing Services, Director - Client Services and Programs, and the Media Unit are informed of Warrant outcomes for rental arrears cases only when there are particular issues that need to be communicated.

Where the Warrant is not executed and allowed to lapse e.g. where the HSM/HM has decided not to endorse the eviction in the individual circumstances), the lapsed Warrant is marked ‘not executed’ and sent to the Principal Registrar of VCAT. The lapsed Warrant must be returned to the Principal Registrar within 60 days of its issue.


1.2.33 Movable unitsA movable unit is hired by an occupant under a signed agreement between the Director of Housing and the unit’s occupant as provided for in the Housing Act 1983 (HA) (s.18). The movable unit is classed as a chattel (personal property not fixed to the land) and is not a fixture or an improvement on land (e.g. a house or unit).

Occupants pay a ‘hiring fee’ to the department, not ‘rent’. Therefore, failure to pay the hiring fee represents a breach of their Hiring Agreement and the department takes appropriate action to recover outstanding fees in line with the HA.

As the process for terminating a movable unit hiring agreement is different from terminating a residential tenancy, refer to the Movable Units Chapter in this manual when a movable unit occupant fails to pay their hiring fee.

1.2.34 Tenants in Housing and Support Program propertiesThe Rental Arrears Policy outlined in this manual is applied to tenants in Housing and Support Program properties.

Regular communication with the tenant’s Case Manager or Support Agency is maintained when Housing and Support Program clients fall into arrears.

1.2.35 Rental arrears greater than $10,000VCAT only has jurisdiction to hear and determine cases involving claims up to $10,000, RTA (s.447 (1) and (1A)). Therefore, action to recover rental arrears is taken well before the arrears begin to escalate as outlined in this manual.

However, VCAT may hear and determine an application or make a determination in respect of a higher amount if the parties to the proceeding consent in writing and provide this signed authorisation to the Principal Registrar, RTA (s.447(3)(4)(5)).

Where the rental arrears exceed $10,000 (or are likely to exceed $10,000 by the time a hearing is scheduled), the tenant is contacted prior to the issuing of an application to VCAT to discuss whether they will provide their consent for VCAT to determine the application.

If the tenant agrees to have the matter involving a monetary claim higher than $10,000 determined at VCAT, prepare an authority form which is then signed by the tenant and the HSM. Provide a copy of the authority to the tenant. The original authority form is given to the Chairperson at the hearing. Inform the tenant of the importance of attending the hearing.

If the tenant has signed an authority form and does not attend the hearing, the Chairperson has the discretion to refuse to extend the jurisdiction of VCAT.

Including a claim for damages under the Fair Trading Act 1999In addition to obtaining consent of the tenant for VCAT to determine the case (or where consent is refused by the tenant), the Director of Housing can seek to recover rent arrears at VCAT in the form of ‘damages’ which are in excess of $10,000. This is because the RTA (s.507A) incorporates sections from the Fair Trading Act 1999 which enable the recovery of an amount of loss or damage as a result of a contravention of the Act (i.e. of the RTA).

A manual application must be made to VCAT, as a higher fee is payable for an application which includes a claim under the Fair Trading Act 1999.

The manual ‘Application to VCAT’ is completed with the same details as an ordinary application for possession for rent arrears, however, the following text is added in the space headed ‘More details about the claim are’:


“Application is also made in accordance with the RTA (s.507A (2)) so as to incorporate the Fair Trading Act 1999 (s.159) for a claim for damages arising out of a contravention of the RTA”.

A copy of the completed and signed application is enclosed with the covering letter and sent to the tenant by registered post at least three working days after the Notice to Vacate was served. Another copy of the application is retained on the department’s tenancy file. Record details of the VCAT application in HiiP.


Appendix 1

Rental arrears procedures flow chart


Text alternative for Rental Arrears procedures flow chart is below in Appendix 2.


Appendix 2

Text alternative for Rental Arrears proceduresSend the arrears letter (more than $5.00)

If the tenant makes contact:

1. If the tenant pays the rental arrears in full, the agreement is satisfied

• If the tenant does not pay in full– local agreement is signed and the tenant is referred to SHASP or other support service

2. If the agreement is broken

• a second local agreement is signed• If the agreement is broken staff telephone or home visit the tenant and refer to SHASP• Send a notice to vacate and application to VCAT1. VCAT hearing• If the hearing is adjourned then there will be a renewal of proceedings

3. If the hearing goes ahead a legal agreement will be put in place

• If the legal agreement is broken staff telephone or home visit the tenant and refer to SHASP– Renewal of proceedings– Order of Possession requested

4. If contact has not been made by the tenant within 14 days, make application for an Order of Possession agreement

• If the Order of Possession agreement is not satisfied, application for a warrant is made• Telephone or home visit tenant and refer to SHASP

5. Warrant is issued

6. Application is made to VCAT to extend warrant for 30 days at Tenancy and Property Manager discretion

7. The warrant is the either executed or lapsed

8. If there is no contact made by the tenant

• Send an urgent reminder letter (14 days after first arrears letter, where arrears remain less than 14 days rent) and conduct a home visit

• If tenant makes contact they will either pay the arrears in full or sign a local agreement9. After the home visit refer the tenant to SHASP or another support agency if the arrears has not been

paid in full

10. If the arrears has not been paid in full after the home visit and the mailing of the reminder letter:

• Send a notice to vacate and application to VCAT11. VCAT hearing

• If the hearing is adjourned then there will be a renewal of proceedings• If the hearing goes ahead a legal agreement will be put in place• If the legal agreement is broken staff telephone or home visit the tenant and refer to SHASP.

There will then be a renewal of proceedings and an order for possession requestedIf contact to initial arrears letter has not been made by the tenant:


1. Within 14 days make application for an Order of Possession agreement

• If the Order of Possession agreement is not satisfied, application for a warrant is made2. Telephone or home visit tenant and refer to SHASP

3. Warrant is issued

4. Application is made to VCAT to extend warrant for 30 days at Tenancy and Property Manager discretion

5. The warrant is the either executed or lapsed

A SHASP Referral should be made if the client is affected by the following issues:

• No other supports• Mental health• Drug and alcohol• Domestic violence• Relocation metro to rural• Social isolation• Abandonment of previous property• Family reunification• Unwanted visitors


Download - Tenancy Management Manual · Web viewA rental and/or maintenance arrears repayment agreement made between the department and a tenant or former tenant to repay rental arrears in regular

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