Arrears Management Policy
The purpose of the Debt Recovery policy is to define BlueCHP’s policy on tenancy charges including rent and non-rent debts.
All tenants are required to pay rent as a condition of their residential tenancy agreement. BlueCHP depends upon the rent paid by tenants to fund maintenance and other essential business activities.
The aim of this policy is to:
- establish an effective Arrears Management Policy
- outline action that may be taken by BlueCHP in respect of non-payment of rent
- provide guiding principles for how BlueCHP will manage situations involving the non-payment of rent or non-rent accounts by tenants
- maintain equity with the majority of tenants who, despite limited income, make paying their rent to maintain their housing a priority
This policy applies to all tenants and former tenants of BlueCHP. BlueCHP will treat debt recovery with sensitivity and have an emphasis on privacy whilst recognising the capacity of individuals to meet their commitments.
Tenant – is the person who signed the Residential Tenancy Agreement
Household Members – are other people who have been authorised by BlueCHP to reside at the property
4. Policy Statement
BlueCHP is committed to maintaining its function as a social housing provider and will implement business rules and allocate sufficient resources to ensure that rental arrears and non-rent debts are appropriately managed, monitored, and addressed.
BlueCHP is able to apply and recovers tenancy related charges in accordance with the provisions of the Residential Tenancies Act 2010 and the Housing Act 2001. Tenants have a legal obligation to pay their tenancy charges as they become due. If they do not make payments, their accounts will fall into arrears; this will result in a breach of their tenancy agreement.
Tenants must notify BlueCHP immediately if they are unable to make payments. BlueCHP will work with tenants to ensure they meet their obligations to pay their tenancy charges; however, BlueCHP will take appropriate legal action where there are major or persistent arrears.
4.1 Advising and managing tenants in arrears
Arrears must be addressed as early as possible to ensure that tenants on low incomes do not accrue rental debts that become unmanageable.
Where a tenant is in arrears with their rent, BlueCHP will take steps to:
- communicate sympathetically with tenants and their supports proactively to ensure that they are aware of any rent arrears [personal contact (phone call/home visit) is preferred prior to any correspondence being sent to tenants]
- provide a reasonable opportunity for tenants to address their arrears promptly
- refer tenants to appropriate support services in respect of helping sustain their tenancy, including for example financial counselling
- as a last resort take action in the NSW Civil & Administrative Tribunal (NCAT) to establish effective orders to recover outstanding rental amounts.
4.2 Non-Rent accounts
BlueCHP will address arrears in non-rent accounts using the same actions and principles as outlined in this policy. Non-rent accounts include water and damages accounts.
4.3 Termination notice
In accordance with the Residential Tenancies Act 2010, BlueCHP will not issue a termination notice for non-payment of rent unless a tenants’ rent has remained unpaid in breach of the residential tenancy agreement at 14 days.
A termination notice for non-payment of rent will advise the tenant that if they pay the rental arrears in full or they enter into and comply with a written repayment agreement that they do not have to vacate the property. It is important that tenants understand that BlueCHP’s goal is to sustain the tenancy by working proactively with tenants.
Where a tenant remains in breach of their agreement, BlueCHP will take action in the NSW Civil & Administrative Tribunal (NCAT) to establish orders for the repayment of rent. Where orders are made by NCAT and the tenant does not comply with these orders, BlueCHP may then take action to end the tenancy by seeking a termination order.
4.4 Guidelines for NCAT action
Where BlueCHP lodges an application in the NCAT for orders in respect of rental or non-rental arrears, the following guidelines will apply:
- An application for possession will be made to enable a Specific Performance Order with a ‘relist date’ to be granted unless eviction has been authorised in writing by the Chief Executive Officer.
- Tenants will be promptly advised in writing that an application has been made, contacted by telephone to explain the reasons for seeking the orders, and encouraged to attend the hearing
- Referral advice to tenant advocacy services will be provided, including culturally appropriate options
- With a view to sustaining the tenancy, all efforts will be made by BlueCHP to reach an acceptable repayment agreement that is affordable and reasonable for both the tenant and BlueCHP
- In addition to orders relating to rent arrears, if a termination order is sought BlueCHP will seek orders regarding the disposal of goods left at the property and the tenant’s bond will not be sought as part of rent arrears orders (this is to be dealt with at end of tenancy).
4.5 Order of Termination and Possession
An Order of Termination and Possession is an order granted in NCAT, which legally ends the tenancy on a certain date. In deciding whether to seek a termination order, BlueCHP will consider:
- amount of rent arrears owing and the extent to which the tenant has made efforts to repay
- previous history of non-payment of rent and non-rent accounts or non-compliance with orders
- tenant’s personal and financial situation, including their housing affordability
- impacts of possible eviction on children or vulnerable household members
- whether the tenant has sought to engage with BlueCHP and/or support services to sustain their tenancy
- history of the tenancy generally
An eviction action is only ever taken by BlueCHP as a last resort after reasonable efforts have been made to sustain the tenancy.
If a tenant fails to vacate the property by the date in the possession order, BlueCHP will apply for a Warrant of Possession requesting the NSW Sherriff’s Office to evict the tenant.
4.6 Special consideration
In some circumstances BlueCHP may re-sign a new lease with the tenant after considering the following factors:
- Whether the tenant has repaid the outstanding arrears in full within 30 days, or has reached an acceptable repayment agreement with THT
- Whether the tenant has engaged with THT and/or other support services to address the reasons why the tenant became in arrears
- Any other extenuating factors not known to THT at the time of seeking the order.
4.7 Legislative and Regulatory Framework
- Residential Tenancies Act 2010
- Housing Act 2001
4.8 Complaints and Appeals
Tenants may appeal decisions made regarding their rent and non-rent accounts.