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Rent Management

Policy

Our rent management policy outlines how we will manage clients’ rents in ways that are legal, efficient and supportive of our clients.

Clients will be given the choice of paying rent by automatic transfer from the client’s bank, wage deduction or direct debit, by Centrelink deduction, by deposit to our bank account (coded deposit book supplied by Housing Plus). In extraordinary circumstances rent payments will be received in the office however this will be discouraged as an ongoing choice.

A copy of the client’s rent ledger will be provided upon request, with a rent statement provided to each client on a six monthly basis. Housing Plus will require all rents payable by clients to be paid two weeks in advance if rent is normally paid on a fortnightly basis, or one week in advance if rent is normally paid on a weekly basis.

Housing Plus will deal confidentially and sensitively with arrears, which will be reported monthly to the Chief Executive Officer and to the Board of Directors. Housing Plus will not charge rents in excess of market rent, which is determined by the rent payable to owners/agents of the property.

Market rents on all capital properties will be assessed annually and the market rent determined in accordance with the market rent policy. All rent, bond, water and other payments will be entered into the rent management program and reconciled to the bank statement on a monthly basis.

Procedures

Rent Payments and Receipting

Options for rent payments will be made available as follows:

1. At any branch of the Westpac Bank using the special deposit book provided to the client at the time of sign up.
2. By transfer from the client’s bank account to the Housing Plus bank account
3. By Centrelink deduction
4. In special circumstances by payment at the branch office

When a client pays at the office, a receipt will be issued. Where a client pays at the bank, the client should keep the stamped deposit slip butt as their legal rent receipt. In the case of Centrelink deductions advice of payment will be provided by Centrelink. Unless a client is in rental arrears, clients will all be provided with a six monthly rental statement generated from the rent management program.

Each branch office will establish as part of the computer software a rent ledger which will reflect all payments of rent and other payments to the account of each client.

Bank statements for each branch will be downloaded from the bank by the administration office where possible on a daily basis. As per the agreement with Centrelink, Centrepay deduction reports will be downloaded over the internet by the Tenancy Services Administration Assistant (TSAA).

The Tenancy Services Administration Assistant will receipt all payments into the computer both Centrepay and direct deposits. A daily Centrepay report will be available on the shared drive for Tenancy Services staff to view. The TSAA will also provide an email daily outlining notification of changes made to Centrepay instructions.

Where GST or charges are payable for Centrelink deductions, Housing Plus will bear the cost of such charges.

Rent receipts will not be issued for rent payments paid by direct deposit which is in accordance with the Residential Tenancy Act,

Each client will be sent a copy of their rent ledger every six months and may request such a copy at any time which will be prepared and forwarded within seven days of such a request.

Market Rent Review

In July each year market rents on Capital and Stock Transfer properties must be reviewed. Market Rent is the rate at which a similar size property in the same Local Government Area could be let on the private rental market based on either the Rental Bond Services published median rent statistics, the rent which would be paid on the private rental market or the actual rent being paid to the owner of a private leasehold property.

All Residential Tenancies Agreements must show the market rent for the property, not the rebated rent paid by the client. The rent shown is the maximum rent the client will be expected to pay during the term of the agreement. Recording the rent this way is very important for two reasons:

  • If rebated rents are treated as if they are the rent, the Residential Tenancies Tribunal may declare any rebate changes invalid.
  • The income review process is much more straightforward if the first letter mailed to clients is 60+4 days notice of an increase to market rent (a loss of their rental rebate) rather than seeking to advise them of changes to their rent payments if they do not return the form.

The process for reviewing market rents will include collecting information before determining the market rent and fully documenting the method for setting the rent level and the date of review.

Information to be collected by the Tenancy Services Manager

  • The latest schedule of median weekly rents from Rental Bond Services data.

Setting the market rent for a property- Tenancy Services Manager

  • Create a property list with the current RBB median rent, and the current market rent for each property you are reviewing. Sort your properties into specific categories according to bedroom size, type of property eg brick or fibro etc, location eg. Mudgee, Gulgong and even as far as suburb if there are particular areas that cost more to rent in such as east/west etc.
  • Note any extras the property may have such as garage, carport, pergola etc and any upgrading that has occurred in the property since the last market rent review.
  • Using the information you have collected in 1, apply the median rent you now believe to be relevant to the property.
  • The completed property list must then be forwarded to the Chief Executive Officer for approval prior to applying the new market rent.
  • Once approval has been provided the new market rent is to be recorded in the TMS property information screen along with details of the date the review was undertaken, the previous market rent, new market rent and date of effect.
  • A file note should be included in the property file stating the reasoning for increasing or not the market rent.
  • The standard Housing Plus Notice of Variation of Market Rent letter must now be sent to the client advising them of the new market rent. In accordance with the Residential Tenancy Act, you must provide the client with 60 + 4 days notice of an increase in market rent.

Leasehold Market Rents

When notification of proposed rent increases is received from agents/landlords, Tenancy Services staff will complete the LEASEHOLD RENTAL INCREASES– APPROVAL FORM, attached the landlord’s notice and forward it to the Chief Financial Officer for approval. The Finance Assistant will then issue the market rent increase letters to clients as per instructions on the form.

Rental Arrears

Policy

The organisation will in the event of any client falling into rent arrears, take all necessary steps to reach agreement with the client on the recovery of such arrears. Failing such agreement the organisation will take action if necessary through the NSW Civil and Administrative Tribunal (NCAT) to recover possession of the property leased to that client.

The organisation is committed to achieving sustainable tenancies and, in dealing with all matters of arrears, the organisation will adopt a sensitive approach to any financial difficulties being experienced by a client with a view to maintaining the tenancy and if appropriate will refer the client to an appropriate service for financial or other counselling or assistance.

Procedures

Rental Arrears Management, Reporting and Monitoring

The Tenancy Officer must at least on a weekly basis examine the rent status of each client. A rental arrears report will be printed on a weekly basis to ensure that potential arrears are picked up as quickly as possible.

The following procedure should be followed each week when the arrears report is printed.

1. Highlight all clients on the report who are in rental arrears of 14 days or more.
2. Establish if the arrears are going up or down and if any previous agreement (if any) is being met.
3. Check to see the last action taken and if any letters have been sent, if the client has responded.
4. Check what step is required to be undertaken next in the process and ensure the Tenancy Officer signs to agree to take the next step.

All steps must be followed exactly as outlined in the process to ensure proper records are maintained which will assist staff if a NCAT hearing is required. Only the approved standard letters will be used when corresponding with clients on arrears and debt management. All action must be recorded in the TMS rent arrears facility to enable correct tracking and monitoring of each individual process.

Process

The steps to be taken in the management of rental arrears process are as follows:

  • For each client identified in arrears immediate action must be taken to ensure that the arrears do not escalate.
  • The action you take will be based on your assessment of the client’s rent history, their known circumstances, the seriousness of the arrears and the last action that was taken and the approved arrears management process.
  • If you have any doubts at this point that the client is still in residence (for instance the phone has been disconnected), go out to the house to have a look for signs of occupation. Do not enter the house even if you think it has been abandoned; implement the process for taking possession after abandonment.

If in doubt about what steps to take discuss with the Tenancy Services Manager

Approved Documents in TMS

Located in TMS ‘Word’ section

Standard – Rent Arrears – Letter and Agreement
Standard – Non-Rent Debts – Letter and Agreement
Standard – Cancelled Centrepay Deduction – not in arrears yet.
Standard – Thank you Letter – arrears paid off

Located in TMS ‘Overdue Letters’ section

LETTER 1 –Notice to Remedy Rent Arrears – 1st Request
LETTER 2 – Cancelled Centrepay Deduction – 2nd Request
LETTER 3 – Part Payment of Centrepay – 3rd Request
LETTER 4 – Breached Rental Arrears Agreement – Notice to Terminate – 4th Request
LETTER 5 – Rental Arrears No Contact – Notice to Terminate – 5th Request
LETTER 6 – Tribunal Application – 6th Request
LETTER 7 – 1st Breach of Tribunal Order – 7th Request
LETTER 8 – Tribunal Application – Re-list – 8th Request

First Sign of a Missed Payment

If a client misses any scheduled payment of rent without prior agreement with the Tenancy Officer, the Tenancy Officer will post to the client a notice to remedy reminder letter, (LETTER 1 – Notice to Remedy Rent Arrears) setting out the client’s and organisation’s options.

Staff must check the daily Centrepay report provided by the Tenancy Services Admin Assistant for notification of clients cancelling or changing payments. Staff must take action immediately; this should not wait for the day in the week in which rent arrears are monitored.

If the client normally pays via Centrepay Deduction and you are advised that the payment has been cancelled, issue the cancellation of Centrepay Deduction letter. (LETTER 2 – Cancelled Centrepay Deduction) or in the case of the payment being reduced to a point that the reduced payment will result in rent arrears, issue the Part Payment of Centrepay Deduction letter. (LETTER 3- Part Payment of Centrepay). In each case the client will be given 7 days to respond by either paying the arrears in full or alternatively signing an agreement for payment of the arrears.

The Tenancy Officer will also if possible contact the client via telephone or conduct a home visit to discuss the circumstances and ramifications for non payment of rent/debit notes and attempt to resolve the issue as quickly as possible. If necessary a sympathetic referral will be made to another agency that may be able to assist the client.

Negotiate Rental Arrears Payment Agreement

If the client contacts staff and pays the outstanding arrears in full, no further action is required.

If the client requests or agrees to a payment plan, staff must negotiate a payment plan that is satisfactory to both parties. Staff will negotiate payments of between one quarter and one third of the client’s rebated rent per week.

Negotiations should start at one third of the client’s rebated rent per week and if necessary negotiate down to the minimum that Housing Plus will accept being one quarter of the client’s rebated weekly rent per week (rounded up to the nearest 5 cents). Payments less than this amount will not be accepted as reasonable, barring exceptional circumstances which must be approved by the Tenancy Services Manager. Payment plans should not be made so easy that clients continue to have rent arrears because they only have to pay a small amount back at a time, the idea is to make it manageable but not easy so clients will be reluctant to miss any future payments which will place them in arrears.

Once the amount has been agreed, the client must sign the formal payment agreement (Standard – Client Rent Arrears Repayment Agreement) and be provided with a copy of the signed agreement and a copy of their rent ledger. If the client normally pays by Centrelink Deduction, staff will, with consent of the client, arrange for a varied/new Centrepay Deduction.

When the negotiation and agreement stage is complete, staff will send the client by mail, formal notification of the agreement made (Standard – Rental Arrears Payment Agreement and Standard – Rental Arrears payment letter).

Negotiate Non Rent Items Payment Agreement

This section deals with payment of debit notes created for non rent payments such as:

  • Rental Bonds,
  • Repairs / other, and
  • Water accounts, etc.

Rental Bonds

Will be charged at the rate of four weeks of the property’s full market rent. Rental bonds are to be paid over an 18 week period as agreed at the commencement of tenancy. Any breaches of the initial agreement requiring a payment plan to be developed, must be negotiated at the minimum of one-eighteenth of the full bond per week – payment less than this amount will not be accepted.

Repairs/Other and Water Accounts

If the client contacts staff and pays the outstanding debit note in full, no further action is required.

If the client requests a payment plan, staff will negotiate payments of between one quarter and one third of the client’s rebated rent per week as a minimum payment. Payments less than this amount will not be accepted as reasonable, barring exceptional circumstances which must be approved by the Tenancy Services Manager.

As stated above, payment plans should not be made so easy that clients continue to rely on Housing Plus paying accounts on their behalf for debts they are responsible for and which should be paid up front as any other client be required to do.

Once the amount has been agreed the client must sign the formal payment agreement (Standard – Non-Rent Repayment Agreement) and be provided with a copy of the signed agreement and a copy of their non-rent ledger. If the client normally pays by Centrelink Deduction, staff will, with consent of the client, arrange for a varied/new Centrepay Deduction.

When the negotiation and agreement stage is complete, staff will send the client by mail, formal notification of the agreement made (Standard – Non-Rent Payment Agreement and Standard – Non-Rental Payment Agreement letter).

No Contact or Agreement by Client

All correspondence will be stamped with the URGENT stamp on both the letter and the outside of the envelope.

If the rent remains unpaid and the client has not responded to previous letters or attempts to contact the client (as detailed in the previous steps), within the period of seven days, the Tenancy Officer will issue Letter 5 with a Notice of Termination. (LETTER 5 Rent Arrears No Contact) Letter 5 explains that the Notice of Termination will be withdrawn if the client makes arrangements to pay that meets the Housing Plus minimum agreement. The Notice will be sent to the client at the leased property and the Tenancy Officer will endeavour to contact the client by telephone or in person to discuss the situation and try to reach agreement with the client for recovery of the arrears.

Clients Who Fail to Maintain Agreements

Clients, who are on an agreement made in the steps above but have not kept to it, will be issued with LETTER 4 Breached rental arrears agreement and a Notice of Termination as soon as a payment is missed and at the expiry of the Notice of Termination depending on the seriousness of the situation and the client’s rental history an application for possession may be made to the NCAT. However, if within the time before the date of tribunal hearing the client has remedied the rental arrears, the application to the NCAT will continue but staff will vary the Termination request to a Specific Performance Order that the client comply with the term of the Residential Tenancy Agreement to pay rent on time and, if the client is still in arrears at the time of the hearing, request the right to relist the matter to the NCAT should the client default on any future payment.

Clients Who Breach Payment Plans and Do Not Respond to Letter 4

If there is no response from the client, or if the Tenancy Officer is unable to reach an equitable agreement with the client, or if the client has a record of persistent lapses in rent payments and has defaulted in previous agreements to rectify such lapses, the Tenancy Officer will issue LETTER 6 Tribunal Application and apply to the NCAT for an order for possession of the premises, but will continue to negotiate with the client a reasonable solution with a view to maintaining the tenancy.

Right up to the time of at Tribunal Hearing the Tenancy Officer will endeavour to save the tenancy and should the client appear at the hearing and agree to a satisfactory repayment schedule, the Tenancy Officer will request rather than a termination of tenancy a specific performance order based on the agreement with the client. Staff will also request from the Tribunal Member the right to relist the application should the client fail to keep to the signed agreement.

Clients Who Breach an NCAT Order

In the first instance that a client breaches a NCAT Order and misses a payment, staff will immediately issue LETTER 7 (1st breach of Tribunal Order). The client will be given 14 days from the date of the letter to pay the missed payments and ensure their payments are up to date in accordance with the NCAT Order. The client will be advised that unless the missed payment is made within the timeframe, Housing Plus will seek termination of the tenancy.

If a relist had been approved by the NCAT, the client will be warned that unless the missed payment/s are paid in full, Housing Plus will relist the matter at the NCAT and will seek termination of the tenancy and possession of the property. If the client pays the amount in full within the required timeframe the matter will not be re-listed but the client will be warned that one more breach will result in termination of the tenancy. If the amount is not paid in full staff will continue with termination of tenancy.

If the client breaches the NCAT Order on more than one occasion having been through the previous step above, the matter must be re-listed and possession of the property sought. The client will be sent LETTER 8 (Tribunal Application – Re-list) advising them of this action, making it clear that there will be no further negotiations and the tenancy will be terminated.

Any action to proceed with termination of a tenancy must be sought on the approved form, forwarded to and supported by the Tenancy Services Manager and forwarded by the TSM to the Chief Operating Officer for approval.

Clients who Have Kept to Agreements

Clients who negotiated an agreement and have kept to it and their debt is cleared should be acknowledged and sent an encouraging thank you letter. Staff will send Standard – Thank you letter – arrears paid off.

Ex-Clients Debt Recovery

A register of ex-client names and agreements made to clear debts will be kept in the arrears file and monitored on a weekly basis to ensure payments are made.

Recording Rent Arrears Action

1. Before taking any legal action on rent arrears (issuing Notice of Termination or applications to the Residential Tenancies Tribunal) check with the person responsible for these decisions (refer to the Schedule of Delegations).
2. Approved standard letters only will be used to manage the arrears process. Letters will be allocated using the TMS rent arrears management process to ensure proper records are maintained including dates that each particular letter in the sequence are sent and the history is recorded.
3. Current rent arrears action should be kept in one folder containing all information sent or received in relation to each client who is in arrears. The file should contain the following information for each client
:

Rent arrears report listing the rent account status for all clients, in date order, most recent first, noted with action taken;
– Letters sent to clients for current arrears action and file note of any contact, attempted contact and notes of any discussions held;
– Agreements made in writing;
– Legal action taken e.g. Notice of termination and Tribunal Application and/or Tribunal Orders; this should also be documented in the TMS general notes page for each client and the notes page printed and placed in the arrears file to show what is happening with each client.
– Schedule of dates to be aware of e.g. expiry of Notice to Terminate, vacate dates and Tribunal hearings etc. These dates should also be entered into staff diaries and outlook calendars to ensure important dates are not missed.

All paperwork related to an individual tenancy should only be removed from the Rent Arrears Action File when the arrears have been resolved.

Any agreement between a client and a Tenancy Officer in relation to unpaid rent or non-rent debit notes must be in writing and signed by the client and the Tenancy Officer.

Last updated – May 2014