DEBT RECOVERY POLICY

Homeswest pursues debts in accordance with the provisions of the Residential Tenancies Act. Any monies owing to Homeswest result in less funds available to assist needy people waiting for housing assistance. Homeswest always prefers to come to an arrangement to repay a debt, rather than take legal action to pursue the matter through the courts. This policy must be read in conjunction with the Legal Recovery Procedures Manual.

Applicants with a Debt to Homeswest 1. See ELIGIBILITY POLICY.
Account Finalisation 2. All accounts will be finalised within six weeks of vacation of the property.	2.1 This includes the bringing to account of Bond 2.2 Accounts will have details of the work done and the job order number. 2.3 A letter will accompany the account explaining the appeal process and where to get assistance and information.
Tenants in Occupation 3. Tenants with a debt to Homeswest, either current or relating to a previous tenancy or Bond Assistance Loan, will have no maintenance undertaken above what is required under section 42 of the Residential Tenancies Act, unless alternative arrangements to repay the debt have been made and are being maintained.
Debts Related to Current Tenancy 4. Debts related to the current tenancy of the debtor will be pursued according to the requirements of the RTA.	4.1 Example: Rental arrears, tenant liability, water consumption debts; incurred during current tenancy. 4.2 Tenant must enter into a proposal to repay the debt and maintain payments until the debt is cleared. 4.3 Failure to enter into a proposal to repay and maintain payments until the debt is cleared will result in a termination of tenancy under Section 62 of the RTA. 4.4 See also 5 to 5.1 for reasonable repayment proposal.

Debts Relating to a Previous Tenancy 5. An arrangement to repay a debt from a previous tenancy is a private arrangement between Homeswest and the tenant/applicant debtor and cannot be reflected in the Tenancy Agreement. The client should provide evidence where part of the debt relates to bankruptcy and payments will not be sought.	5.1 The agreement is reflected in the proposal to repay only. 5.2 Section 62 of the RTA can not be used to terminate debts from a previous tenancy. See 4 to 4.4. 5.3 Failure to maintain the agreement will result in Homeswest taking action under Section 15 of the RTA.
Previous Tenancy at the same address 6. Once a Magistrate has authorised a court order terminating the tenancy, the Tenancy Agreement becomes obsolete and a new tenancy agreement must be signed. Any outstanding arrears will therefore relate to a previous tenancy and must be treated as a vacated debt	6.1 In such instances, the tenant will be requested to sign a formal proposal document agreeing to pay any debt in regular installments at the same time they complete the new Tenancy Agreement. The Debt Discount Scheme will not apply if tenants are re-housed at the same location.
Statute Barred Debt 7 Under the Limitation Act 1985 the period for a tenancy debt is 6 years. Expiration of the period does not expunge the debt as if it never existed but once this period has elapsed, the debt becomes “Statute Barred” and legal recovery is not permitted. Under the Bankruptcy Act 1996, where a client declares bankruptcy, the debt becomes “Statute Barred”, subsequent discharge of the bankruptcy relieves the customer of the legal liability to repay the debt, but it does not expunge the debt as if it had never existed. Repayment of statute barred debts will not be pursued by the Department of Housing and Works and will not preclude further assistance being offered by the Department of Housing and Works.	7.1 Repayment of statute barred debts can not be pursued.

Arrears Repayment for Tenants in Occupation

8. Homeswest will act promptly to ensure that arrangements to repay a debt are made with a tenant in occupation, to prevent the accumulation of a large debt.

8.1 For all debts, Homeswest will seek an arrangement so that the combined total of the tenant’s arrears and current debt does not exceed 30% of their total assessable household income. Tenants may at their own discretion pay extra monies above 30% of income on their volition.

Example:

Where the agreed payments are not maintained, contact should be made with the tenant to ascertain why payments have ceased. Discretion should be exercised where there has been a loss of income, for instance due to Centrelink payment cancellation, loss of employment, or a cancellation of maintenance payments. The termination process should recommence once a final warning has been sent to the tenant and continue in the absence of a satisfactory response from the tenant.

Default on a Proposal to Repay a Debt 9. Any tenant failing to maintain an agreement of the proposal to repay a debt will be advised of default by letter and given seven days with which to comply. Failure to comply will result in legal action commencing.
Bankruptcy of a Tenant in Occupation 10. See Bankruptcy Policy (See ELIGIBILITY POLICY)
Joint Liability of Tenants 11. Tenants signatory to the Tenancy Agreement is jointly liable for any debt.	11.1 Tenants who jointly sign the Tenancy Agreement are jointly liable for any debt from the tenancy. This means that a debt is split evenly between all parties signatory to the agreement.
Minimal Maintenance 12. See TENANT ELIGIBILITY POLICY 29.