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1.5 Rent Setting and Arrears Management
1.5.1 Policy
The Rent Management Policy sets out how Bridge Housing calculates rent for its clients and how Bridge Housing will manage rental arrears.
1.5.1.1 Rent Setting
The aim of Bridge Housing is to ensure that it establishes a rent policy which is fair and equitable for low income tenants. Bridge Housing rent setting will be determined by the specific program guidelines. Rents for the general housing or Community Housing Leasing Program (CHLP) are 25% of gross income plus 100% of rent assistance and is subject to the Community Housing Division (CHD) (of Housing NSW) NSW Community Housing Rent Policy. The general housing or CHLP program provides the majority of Bridge Housing's dwellings.
In more recent years Bridge Housing has undertaken the management of affordable housing where the rent policies differ from its general housing program either because the proportion of rent paid is higher than 25% or the rent is set at a discount to the market rent. Where rent differs such as in the Social Housing Subsidy Program or any affordable housing program this will be indicated in the housing program information.
1.5.1.2 Rent Arrears Management
Bridge Housing aims to maintain the tenancies and will endeavour to ensure that tenants have quiet enjoyment and use of their rented property. However rent must be paid two weeks in advance to maintain the financial viability of Bridge Housing so it can continue to deliver housing services.
If a tenant is facing financial difficulties they must contact their Housing Manager to work out a repayment arrangement and Bridge Housing will assist the tenant seek financial counselling advice if this is required.
Bridge Housing expects Housing Managers to be pro-active in monitoring and managing rent in their property portfolio. Housing Managers are required to familiarise themselves with the arrears management on the Tenant Management System (TMS) in order to effectively monitor rent arrears.
Early action is crucial in keeping arrears under control, otherwise tenants may accrue arrears that they cannot repay and which may ultimately lead to the loss of their housing.
Supported Tenancies: Where a tenant is supported, the Housing Manager must contact the support agency to discuss the situation and develop a strategy to clear the rent arrears.
Where there has been no response from the tenant after the issue of a Termination Notice, the Housing Manager will check the tenant's file notes and personal file. The tenant may, for example, have language difficulties and need to be contacted via an Interpreting Service, or they could have a disability or be illiterate, in which case a visit may be more appropriate.
Housing Managers are also required to record the date and action taken in the client details on TMS.
1.5.2 Procedure
1.5.2.1 Rent Setting Procedure
Rent Setting Procedure
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CHLP Housing Program or Bridge Housing general housing program
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Rents are established by the CHD's NSW Community Housing Rent Policy.
Housing Managers will be provided with a copy of the policy
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Social Housing Subsidy Program
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As per the Social Housing Subsidy Program Guidelines. Refer to the annual Social Housing Subsidy Program updates as the income bands and % of rent paid within each income band.
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Affordable Housing Program
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Generally this is 74.99% of the assessed market rent. Market rent is defined as the median rent for that property type as per the NSW Rent and Sales Report. The Rent and Sales report information can be accessed from the Housing New South Wales website: www.housing.nsw.gov.au |
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1.5.2.2 Rent Arrears Management Procedure
Table 1 sets out the Rent Arrears Management Procedure for Housing Managers to work within to achieve the above key principles and to ensure action is taken consistently.
The arrears procedure applies where a tenant's rent is in arrears. Arrears are defined where a tenant is less than two weeks in advance in their rent. It is important that the arrears procedure is applied consistently and fairly. Early action is crucial in keeping arrears under control. Always note the date and action taken in the client details on TMS.
Table 1: Rent Arrears Management
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Process
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Action
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Documentation
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1.One to five days in arrears
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Phone tenant to advise of arrears. If the tenant is unable to clear the arrears in one payment, agree a payment plan to bring the account in line with their tenancy agreement i.e. two weeks in advance.
Advise the tenant that a Termination Notice warning letter will be sent if their rent account reaches seven days in arrears.
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2. Seven days in arrears
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Housing Manager is to issue Termination Warning letter.
If a payment plan is negotiated, the payment plan must be confirmed in writing and if possible signed by the tenant. The payment plan and the first payment must be made within five days of the Termination Warning letter.
Housing Manager is to advise the tenant that if they do not clear the arrears or keep to the agreed payment plan, a Termination Notice will be issued if the arrears reach 14 days
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Termination Notice warning.
Arrears 'letter 1' on TMS, First Request.
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3. Fourteen days in Arrears
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Termination Notice on day 14 in arrears.
The tenant must contact the Housing Manager within 7 days of Termination Notice being issued to negotiate a payment plan. If there has been no contact from the tenant or they have not kept to the payment plan Bridge Housing will apply to the Consumer, Trader and Tenancy Tribunal (CTTT) for a termination of tenancy. This may be down graded at the CTTT to a Specific Performance Order at the discretion of the Manager, Housing Services.
Where a payment plan is agreed the Housing Manager is to send letter to confirm the details. To calculate the additional payment to clear the rent arrears is to calculate their rent at 30-35% then base the additional payment on the 10-15% above 25% of rent.
Housing Managers will monitor payment plans on a weekly basis. Where tenant fails to keep to the payment plan Bridge Housing will apply to the CTTT to terminate the tenancy. This can be downgraded to a Specific Performance Order at the hearing at the discretion of the Manager, Housing Services.
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Termination Notice and covering letter. Arrears ‘letter 2’ on TMS, Second Request.
Issuing a Termination Notice
By post
Termination Notice may be sent by ordinary post. In this case, when entering the date vacant possession on a Termination Notice count four working days for postage (excluding weekends or public holidays) plus no less than 14 days (including weekends) otherwise the Termination Notice will not be valid.
It's worth adding a couple of extra days to cover yourself.
By hand
If hand delivered to the tenant in person the four days postage is not required. Putting the Termination Notice in the letter box or under the door is not considered hand delivery
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4. Application to the CTTT for a Specific Performance Order
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Bridge Housing has 30 days after the expiry of the Termination Notice to apply to the CTTT for an Order to Terminate the Tenancy or a Specific Performance Order. If a tenant does not keep to the agreed amount in the plan payment the Housing Manager is required to apply to the CTTT to terminate the tenancy. Applications are made on-line ( www.dft.nsw.gov.au). If a payment plan is agreed between the time of the application to the CTTT and hearing date, inform the tenant that the payment plan will be formalised by a Specific Performance Order. When seeking a Specific Performance Order the Housing Manager should always request permission to 're-list' the matter within six months. This enables the Housing Manager to fax the CTTT with a request to hear the case within the re-list period if the tenant does not keep to the Specific Performance Order. Housing Managers must put a reminder of the re-list expiry date on TMS notes and/or calendar. Once the re-list expires a new TN and application to the CTTT must be made if the tenant is still in arrears. |
Application to CTTT. Arrears 'letter 3' on TMS, Third Request.
You can apply for and be granted a Specific Performance Order without a valid Termination Notice. However, if the tenant does not comply with the Specific Performance Order a Termination Notice must be issued before applying for a termination of tenancy.
After the CTTT hearing the Housing Manager will send a letter to the tenant confirming the outcome of the hearing.
CTTT outcome/orders made. Arrears 'letter 4' on TMS Fourth Request.
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5. Termination of tenancy warning where SPO payment missed.
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In cases where a tenant has been keeping payments in line with the Specific Performance Order then misses a payment or does not pay the full amount, a warning letter will be sent informing them that a termination of their tenancy will be applied for if the payment is not made up.
The outstanding debt must be cleared by their next payment.
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Termination warning letter. Arrears 'letter 5' on TMS, Fifth Request.
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6. Order for Termination and Possession
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If a tenant does not comply with a Specific Performance Order the Housing Manager must apply for an order to terminate the tenancy.
Re-list
If an application to terminate the tenancy is made within the re-list period then a request for a re-list can be made to the CTTT by fax.
Re-list expired
After the re-list period has expired a new Termination Notice must be issued and new application to the Tribunal made to terminate a tenancy.
Arrears cleared
If the tenant clears the arrears before the hearing date then the breach of tenancy has been rectified no further action can be taken. In this case a fax must be sent to the CTTT informing them that Bridge Housing is withdrawing the application to terminate the tenancy.
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Before a Housing Manager makes an application to terminate a tenancy and seek possession - approval must be given by the Manager, Housing Services or Executive Officer.
Application to terminate the tenancy. Arrears 'letter 6' on TMS, Sixth Request.
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7. Termination of Tenancy and Possession of Property
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After the CTTT has made an order to terminate the tenancy and possession is given to Bridge Housing, the tenant becomes an occupant and pays an occupation fee while they remain in the property. If the tenant does not vacate on the date specified on the possession order an application to the CTTT for a "Warrant for Possession" is to be made by fax by the Housing Manager. For example of fax see Appendix 8. On receipt of the Warrant the Housing Manager needs to request a cheque from the Finance Manager. The cheque is to be taken with the Warrant to the local Office of the Sheriff (go to www.lawlink.nsw.gov.au to find the local Office of the Sheriff). |
Termination of tenancy (eviction) letter. Arrears 'letter 7' on TMS, Seventh Request.
Subject to approval by the Executive Officer and only in exceptional circumstances will the decision to evict be reviewed.
If a decision not to evict is made after the tenancy has been terminated by the CTTT the existing tenancy must be terminated and a new tenancy created. The tenant will need to sign a new tenancy agreement.
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8. Debt Recovery
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When a tenant leaves with arrears and or a non-rent debt, Bridge Housing will pursue recovery of the debt through a debt collection agency
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Housing Managers are to complete the Information Proforma for Dun & Bradstreet Appendix 9, then pass to the Manager, Housing Services by email for approval. Once approved the proforma will be emailed to the Finance Manager then forwarded on to Dun & Bradstreet.
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Bridge Housing Policy and Procedures Manual: Rent Setting and Arrears Management Revisions
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Document Title
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Rent Management
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Approval Date
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September 2007
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Approval Authority
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Bridge Housing Board
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Effective Date
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October 2007
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Review Date
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October 2009
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Administrator
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Executive Officer
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