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Section 6 - Legal Action Against Tenants

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6.1 Introduction

It is very important that personal contact is made with a tenant in arrears to determine what is the cause of the arrears and what can be done to assist the tenant to improve the situation.

The Aboriginal Housing Board implements a standard set of procedures across the state aimed at early intervention and assistance to tenants to prevent large arrears accruing.

The primary aim of the arrears recovery procedure is recovery/collection of unpaid rentals. The aim is not to evict tenants. Every attempt will be made to encourage and assist tenants to pay their rent and remain in their property. All tenants are expected to pay their rent and on time and where this does not occur, the Aboriginal Housing Board will take appropriate legal action in accordance with the following policies and procedures.

For the Victorian Aboriginal Rental Housing Program, as administered by the Department of Human Services, rental arrears are a serious issue because the less rental income received through Aboriginal Housing Program tenancies, the less funds available for Aboriginal Housing Program maintenance purposes.

The Aboriginal Housing Boards' rent collection policy is about prompt assistance, advice, action and early resolution because delays cause more rent owing and consequently greater difficulty for the tenant to maintain a stable rental account.

The Aboriginal Housing Board believes that an Aboriginal tenant's rental arrears is usually a symptom of other problems confronting the tenant. Therefore, the factors (as outlined in 6.1) that lead a tenant into rental arrears generally fall outside the scope of the Aboriginal Housing Board. It is imperative then that Aboriginal tenants in arrears be encouraged to seek assistance from either specialist statewide Aboriginal organisations, if required, or local Aboriginal community organisations or other non Aboriginal resources and services.

Rental arrears prevention or recovery action concerning any applicant or tenant of the Victorian Aboriginal Rental Housing Program will involve the following procedures.

6.2 Prevention of Rental Arrears Begins During the Application-Allocation-Sign up Process

The involvement of Aboriginal organisations and groups during this process is particularly important and should include providing the same advice as outlined above through (a) direct individual contact with new applicants or tenants; and (b) local Aboriginal community education programs that emphasise preventative tenant rental arrears measures.

6.3 Initial Arrears

Early identification of tenant rental arrears must occur and immediately a tenant falls into arrears the first reminder letter (attachment 1) is to be automatically forwarded by the Department of Human Services to the tenant.

If the tenant responds within 7 days and pays all rental arrears in full or makes a "Rental Arrears Agreement" (see iii), no further action is to be taken.

The tenant may not respond to the first reminder letter for whatever reason and if arrears continue to accumulate to an amount not less than two weeks rental the Aboriginal Housing Services Officer or Board Member must be immediately notified by the Department of Human Services.

Personal contact must be made with the tenant by the Aboriginal Housing Services Officer or Board Member or Department of Human Services Housing Officer for the purpose of (a) advising tenants about their arrears situation; (b) seeking information from tenants about reasons for being in arrears/identifying tenant problems; (c) whether any referrals need to be made; (d) completing a Rental Arrears Agreement with the tenant; and (e) advising tenants about possible Department of Human Services legal action.

6.4 Rental Arrears Agreements

Clearly, tenants should not be allowed to get advance Social Security payments to pay lump sums which will lead to hardship later.

The Department of Human Services will only accept written agreements, as verbal or telephone agreements are easily forgotten. However, a personal letter from the defaulting tenant detailing the repayment he/she plans to make can be acceptable.

The agreement must be within the tenants financial means. A tenant may choose to involve a Financial Counsellor in helping to determine their capacity to pay. It is difficult and not all satisfactory to have a fixed formula for working out arrears payments. The tenant should be given the opportunity to work out what is manageable. The Financial Counsellor in consultation with the tenant will work out what the "affordable" arrears instalments will be. The Financial Counsellor will take into account other debts, hire purchase commitments and general living expenses when determining the arrears repayment instalments.

The Aboriginal Housing Services Officer or Department of Human Services Housing Officer should try to assess why tenants have fallen into arrears and record this information (eg. hire purchase commitment, tenant recently involved in a car accident, unable to attend work, family problems, waiting on sickness benefits) on the tenants file.

Rental arrears agreements sought prior to a Notice to Vacate from tenants of Victorian Aboriginal Rental Housing Program properties must not exceed more than $10 per week and any figure over this amount must be negotiated with the Aboriginal Housing Services Officer.

6.5 Monitoring of Rental Arrears Agreements

A maximum of two home visits must be carried out prior to the commencement of legal action by the Department of Human Services.

If rental arrears continue to increase despite the two home visits the Board Member will be expected to approve a Notice to Vacate instructing the Department of Human Services to seek a Consent Order which is a Rental Arrears Agreement ratified by the Residential Tenancies Tribunal. Tenants to be urged to attend the Residential Tenancies Tribunal because non attendance will automatically result in the granting of an Order of Possession.

The Department of Human Services must have approval from the Board Member for the issue of a Notice to Vacate against any tenant of the Victorian Aboriginal Rental Housing Program via a Proforma (attachment 3). For Aboriginal tenants of the Department of Human Services general housing program a copy of the Notice to Vacate is to be provided to the Aboriginal Housing Services Officer.

In order for the Board Member to monitor on a regular basis all Aboriginal tenancies within their respective region, the Department of Human Services to provide a weekly computer print-out of Aboriginal householder details.

6.6 Notice to Vacate. The Commencement of Department of Human Services Legal Action Process

Once the Notice to Vacate is approved by the Board Member, the Aboriginal Housing Services Officer must verbally advise the tenant about their rights and options including the importance of attending the Residential Tenancies Tribunal hearing.

The Victorian Aboriginal Legal Service will be expected to provide legal advice and assistance when requested by the tenant.

6.7 The Residential Tenancies Tribunal-Dispute Resolution Process

The Residential Tenancies Tribunal which is independent from the Department of Human Services has the power under the Residential Tenancies Act, 1997 to hear and settle any dispute arising between a landlord and a tenant.

It is in the best interests of the tenant to attend a Residential Tenancies Tribunal hearing (with legal or other representation if so agreed) because of those cases taken before the Tribunal, many result in a Legal Agreement. A Legal Agreement stipulated by the Residential Tenancies Tribunal must be strictly adhered to by the tenant. If the Legal Agreement is not adhered to by the tenant the final Department of Human Services eviction process will commence unless there are exceptional circumstances such as severe hardship, illness or other acceptable reasons.

It is imperative that the tenant provide immediate advice to the Board Member or Aboriginal Housing Services Officer or the Department of Human Services about the reasons for defaulting on the Legal Agreement. It is also imperative that the Department notify the Board Member about any applications for a rehearing at the Residential Tenancies Tribunal for those tenants who default on a Legal Agreement.

6.8 Order of Possession - Final Department of Human Services Eviction Process

Once an Order of Possession is granted by the Residential Tenancies Tribunal the tenant has seven days in which to respond and enter into a Special Agreement arrangement. The Special Agreement arrangement is a lump sum payment made by the tenant and regular payment amount agreed to by the tenant which ensures that all rental arrears are paid in full within a period of six months. Failure to respond and enter into the Special Agreement arrangement will result in commencement of eviction proceedings against the tenant.

6.9 Request for Authorisation of an Eviction

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